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Column Wed Dec 10 2008
Perhaps while watching yesterday's breaking news regarding the arrest of Illinois Governor Rod Blagojevich you said to yourself, "Surely Chicago politics couldn't get more absurd." Well, try this one on for size.
As the U.S. housing market leads the global economy into its greatest crisis since the Great Depression, that whip-smart team over at the Mayor's Office has decided to bet our futures on yet another condo development. But this isn't just any condo development — this is an Olympic Village.
That's right. The deal to obtain the land underneath Michael Reese Hospital for Chicago's 2016 Olympic bid is back on. And the City of Chicago is about to take out an $86 million loan to acquire the land that is currently occupied by the functioning hospital.
Once they acquire that land, they plan to demolish the hospital and build housing for athletes who will participate in a two-week sporting event that may occur in Chicago eight years from now. How's that for absurd?
In a deal originally put forward last spring, the acquisition was put on hold after the initial demolition costs for the site came in $12 million over budget, forcing the city to renegotiate the deal with Medline Industries Inc., the current owner. The new arrangement has Medline picking up more of the tab to cover the demolition costs — totaling $32.5 million dollars in "charitable contributions," as summarized by the bid team.
Of course, after yesterday's revelations we should all be a little worried whenever something like "charitable contributions" is mentioned.
The Michael Reese deal still has to go before the Chicago City Council on December 17. But with the Daley Machine moving with precision behind the Olympic bid you can bet that little to nothing will be said in opposition.
And if the deal does go through, the citizens of Chicago will have to pray that the City finds a developer as soon as possible, as the interest payments on the 15-year loan kick in five years from now. And given the current economic forecasts, finding a developer could be problematic. According to Crain's, "The delinquency rate for construction loans in the area hit 13.7 percent in the quarter, up from 10.8 percent in the second quarter and more than four times the rate in the year-earlier period."
The Chicago Spire has been put on hold due to the current economy, leaving nothing more than a hole in the ground. And Trump Tower has sold only three quarters of the available units, leading Trump to seek drastic measures. Crain's reports: "Unable to sell his remaining condos and hotel units, Mr. Trump failed to pay back the $334-million loan balance when it came due in early November and has sued his lenders to buy more time."
Block 37's largest tenant has backed out of its lease while the "super-station" that sits underneath the site (which is to connect the Loop to O'Hare via an express train) has been sealed off — while it waits in need of another $100 million in construction funding.
Yet somehow, the City of Chicago, which recently axed public services and nearly 1,000 city employees to close a $420 million budget gap, is able to justify the acquisition of Michael Reese Hospital.
This leads me to ask: Has anyone picked up a newspaper at City Hall in the last year? People are losing their jobs and their houses. They can't afford healthcare — and Mayor Daley wants to buy a hospital to knock it down.
It seems that the priorities of our elected officials aren't in line with that of the average person.
While most of us stood in amazement at the criminal complaint filed against G-Rod yesterday, you can bet that after hearing the news, Daley's mind immediately gravitated to its impact on Chicago's Olympic bid. Just as the first thought through Blagojevich's head following Obama's election victory was, "I'm to make some [expletive] money off this thing," at yesterday's news conference, FBI special agent Robert Grant said of Illinois politics, "If it isn't the most corrupt state in the United States, it's certainly one hell of a competitor."
Well, Mr. Grant, if the circus surrounding the simple task of filling a vacant Senate seat didn't convince you, just wait till the Olympics come to town.