Gutierrez home deal
BY TIM NOVAK Staff Reporter
Updated: November 8, 2010 7:39PM
Rep. Luis Gutierrez got a deal on a riverfront town house built by Antoin "Tony" Rezko, a developer and prominent political fund-raiser now under indictment for an alleged kickback scheme involving state pension funds.
Gutierrez paid $434,900 three years ago for the town house along the Chicago River just north of Diversey. That's far less than his neighbors paid for any of the other riverfront town houses in the development, records show.
Gutierrez no longer lives there. In March, he sold the town house for $610,000 -- a 40 percent profit.
Only two other original owners have sold their riverfront town houses -- one paid $535,000 and sold it for $650,000, a 21 percent profit; the other paid $622,000 and sold it for $662,000, a 6 percent profit.
Gutierrez said he's been friends for 20 years with Rezko, whose family has donated more than $19,000 to the congressman's campaign funds over the years.
But the congressman said their friendship had nothing to do with him getting the cheapest price on any of the 17 riverfront town houses Rezko built, with everyone else paying between $495,000 and $660,000, in some cases for smaller homes. Gutierrez said he never even discussed the deal with Rezko, buying the home through a salesperson at Rezko's company, Rezmar Corp.
"I walked in with my wife -- as any other consumer could have -- and purchased the unit at the listed price, with no considerations. In fact, the price had gone up from $399,000 to $434,000 within two or three weeks of the first showing," Gutierrez said in an interview Friday.
That was a day after he announced he wouldn't run for mayor of Chicago next spring. In bowing out, Gutierrez cited his wife Soraida's battle with thyroid cancer and noted that the Democratic Party's newly won control of the House could give him a greater leadership role.
The congressman's deal with Rezko is surfacing soon after the Chicago Tribune reported that Rezko had been involved in a real estate transaction that allowed Sen. Barack Obama to buy a South Side mansion for $300,000 below the asking price, while Rezko paid full price -- $625,000 -- for the adjoining vacant lot, later selling a strip of the land to Obama.
In March 2003, Gutierrez closed on a corner home in the development on the Chicago River's west bank. He said he got a deal because he agreed to buy the town house from Rezmar in September 1999, years before it was built. The
home was supposed to be finished in two years, but it took 40 months, the congressman said.
When Gutierrez agreed to buy, the homes were priced at $304,900 to $519,000, the congressman said, producing newspaper stories and ads for the Rezmar development.
Other buyers already had signed up for the "pre-construction" discounts, Gutierrez said. He could not explain why his neighbors all ended up paying much more than he did, even for slightly smaller homes. Some people might have canceled their pre-construction contracts or sold them for a profit as prices escalated in the booming neighborhood, Gutierrez said.
Rezmar's attorney, Michael Sreenan, said some people do resell their "pre-construction contracts" before a project is completed "but not very often." Sreenan said he couldn't produce records to show if any other buyers got the same pre-construction price.
By the time Gutierrez and his wife closed on their 2,361-square-foot home in March 2003, four other buyers had already closed on their town houses, records show. Those four neighbors paid between $516,000 and $660,000 for their homes. Each of those homes has the same amount of living space as the one the congressman owned but slightly less land.
'NO RELATIONSHIP WITH OUR OFFICE'
Gutierrez, 52, and his wife buy and sell houses every few years in booming neighborhoods. Their aim, he said: to make money. In the last seven years, they've bought and sold five homes. Usually, they buy a lot and build the home themselves. The lone exception was the town house they bought from Rezko's company.
Rezko has been a key fund-raiser for several prominent politicians, among them Gutierrez and Gov. Blagojevich. Rezko is charged with demanding kickbacks from companies that wanted to manage state pension funds under Blagojevich.
Rezko, his family and companies have donated $19,000 to Gutierrez's campaign funds since 1993. Rezko also held a fund-raiser for Gutierrez in 1992, when Gutierrez was a Chicago alderman running for Congress, the congressman said.
"Tony would talk to me about political stuff," Gutierrez said. "I get a lot of that from my friends."
But he added: "I have absolutely no relationship between my official duties as a congressman and Tony Rezko. He has no relationship with our office."
UP THE RIVER
U.S. Rep. Luis Gutierrez lived at 2846 N. Riverwalk. He sold the town house for $610,000 on March 1, 2006. Here's a look at the sales prices for the 17 units in the development:
address sales price closing date unit sq ft land sq ft
2832 $595,000 6/8/04 3,055 1,437
2834 $545,500 1/9/2004 2,249 1,040
2836 $515,000 6/10/2003 2,249 1,070
2838 $660,000 11/8/2002 2,361 926
2840 $636,000 2/13/2004 2,361 924
2842 $530,000 Jan. 2004 2,361 923
2844 $635,000 2/6/2004 2,361 923
2846 $434,900 3/14/2003 2,361 973
2848 $535,000 10/3/2003 2,361 999
2850 $624,000 5/15/2003 2,361 937
2852 $622,000 11/26/2002 2,361 937
2854 $526,000 11/25/2002 2,361 938
2856 $516,000 1/9/2003 2,361 929
2858 $600,000 7/24/2003 2,361 936
2860 $494,000 Sept. 2003 2,249 1,058
2862 $600,000 5/7/2003 2,249 1,076
2864 $595,000 3/30/2004 3,055 1,308
Source: Cook County recorder of deeds, Cook County assessor, Rezmar Corp.