News & Politics » Ben Joravsky on Politics

The developer who's revolting against Rahm

He may not be Saul Alinsky, but at the moment, James McHugh is all we've got.


Mayor Rahm Emanuel plans to build a basketball arena and hotel complex in the South Loop—unless property owner James McHugh can thwart him. - SUN-TIMES MEDIA
  • Sun-Times Media
  • Mayor Rahm Emanuel plans to build a basketball arena and hotel complex in the South Loop—unless property owner James McHugh can thwart him.

For the past two years, Mayor Emanuel has knocked over the civic and business elite in this town like a bowling ball crashing through pins.

These high-charging execs—masters of their corporate worlds—have essentially responded to the mayor's schemes and dreams by saying, "Good idea, boss! Where do you want us to send the campaign contributions?"

But it seems there's at least one wealthy connected guy saying no this time. Chicago, meet your new revolutionary: James McHugh.

Yes, it shocks me too. For more than 40 years he's made a fortune as a contractor and developer by cultivating City Hall, not challenging it.

Yet McHugh's pretty much the only thing standing between the mayor and his $92 million plan to build a basketball arena and hotel in the South Loop.

He may not be Saul Alinsky, but at the moment McHugh is all we've got.

McHugh's fight with the mayor erupted into the open on July 24. That's when the City Council, acting on the mayor's orders, voted unanimously to give the city "quick take" powers—meaning they could snatch McHugh's South Loop property and haggle over an asking price later.

Most of the aldermen didn't even know what they'd approved, even though it means they're agreeing to spend at least $25 million. Vigilant watchdogs, as always.

Most property owners have one of three different reactions when the city moves to seize their land. There's the response of resignation, when they take whatever they can get since they figure there's little point in fighting City Hall anyway. Alas, this is how thousands of relatively poor south- and west-siders have reacted to various urban renewal programs through the years.

But other property owners try another approach that goes something like this: Kiss my ass! You'll never get me off my land no matter how many lawyers you send at me.

This response is best illustrated by Donald Zordani, who successfully repelled the city's attempt to take his bike store on Lawrence Avenue in Jefferson Park a few years ago.

Finally, there's option number three, in which the property owner tells City Hall: You may get my land, but only after I squeeze you like an orange juicer.

This bold option is the one McHugh has apparently chosen. And why not? The man's been a big player in this town since Emanuel was eating Ho Hos in the cafeteria at New Trier West.

In other words, McHugh counterattacked: he sued the city before the city sued him.

Before I get to the specifics of McHugh's suit, let me remind you of what's at stake. Mayor Emanuel's proposing to spend at least—and I emphasize at least$92 million in property tax funds to buy land near the intersection of Michigan and Cermak that will be used for a Marriott hotel and DePaul basketball arena.

That's $92 million that might otherwise go to the public schools, which are so broke that many of them—like Walter Payton College Prep—can't afford librarians. Just to cite one of the many things they can't afford.

Mayor Emanuel's partner in this scheme is the Metropolitan Pier and Exposition Authority, the city-state entity that owns Navy Pier and McCormick Place.

The mayor contends the development will ignite a boom that will bring in more money for our bankrupt schools. But what he neglects to mention is that the project's cost will undoubtedly exceed whatever it brings in—at least in our lifetimes.

In his suit, McHugh notes that the city had already approved his plans "to construct a six-story electronic data storage center" on his property at Cermak and Indiana.

Moreover, on December 2, 2009—when Daley was still mayor—the City Council unanimously approved McHugh's application for the zoning change he needed to build the storage center.

That would be the same elected body that unanimously voted to snatch the land away. You know how it goes—different mayor, same rubber stamp.

Last September, McHugh submitted "all necessary plans, drawings and related documents" to the city to receive a "foundation permit," which would enable him to start construction, according to his suit.

But "on or about this time" McHugh was "orally informed" that his permit was being held and would not be acted upon because McPier and the city wanted to buy his land.

Thus began much wheeling and dealing. Or, as McHugh puts it in his suit, he "began discussion and negotiations regarding the acquisition" of his property.

Here's my favorite part: McPier "offered to acquire" the property "by purchase and/or in exchange for nearby parcels of property." In other words, McPier was trying to sweeten the deal by offering to throw in some unspecified land that the agency didn't even own yet.

Anyway, the haggling continued until the summer, when, according to the suit, the city withdrew the offer and informed McHugh that it "intended to acquire the property" by way of "eminent domain."

Translation: If you won't sell, we'll sue.

Was McHugh fazed? Hell, no. On September 16 he sued the city, asking that a judge block the city from snatching his land. He also wants the judge to order the city to award him his foundation permit and pay him legal fees.

Brilliant move, Mr. McHugh. It almost excuses you and your lawyer for not returning my calls and e-mails.

If this case moves forward, we can all look forward to the mayor having to testify under oath about how much of the inner workings of this deal he knew and when he knew it. That's a deposition that should be televised on the city's public access channel so students can learn just how their city really works.

Naturally, the city had a response to McHugh's suit. On September 23, Langdon Neal, the city's eminent domain lawyer, filed suit against McHugh alleging that his plans for the property are "inconsistent with the city's development plans for the subject area."

Let's pause to appreciate the city's logic. Mayor Emanuel is saying that McHugh's proposal to build a data center on his land—which would then generate more property tax revenue for the city—is inconsistent with his own plan to develop the land so it pays nothing in property taxes.

In any event, we now have two lawsuits over this parcel of land, which is two more librarians than Payton has for its library.

Does McHugh's suit have a chance? Most lawyers I've asked—and I've asked a bunch of them—believe that McHugh's just looking to squeeze more money from the city for his land.

In fact, he wins whichever way it goes. He either swaps his land for buckets of money—and maybe some other parcels—or he gets to build his data center.

As far as I can tell, the only losers will be the taxpayers and schoolchildren of Chicago—same as it ever was.

Comments (20)

Showing 1-20 of 20

Add a comment

Add a comment