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Sticking Point

Rogers Park's long-awaited shopping mall faces a holdout

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By Ben Joravsky

You'd think it would be peace and love in Rogers Park, with the long-awaited, turn-the-community-around shopping mall at Clark and Howard just months from completion.

But no, it's just the opposite. The owner of the six-story art deco building at the heart of where the city-subsidized mall's supposed to be accuses the city of ripping him off, and the city accuses him of greed and attempted extortion. "If they think I'm going away quietly they don't know me," says Pivot Point's Leo Passage, whose adamancy is matched by his adversaries in this affair, developer Rudy Mulder and Alderman Joe Moore. "There's a principle here. You can't just take away a man's property."

The big shocker is that the city got this far without dealing with Passage. His Pivot Point has long been one of the area's most prominent businesses, remaining after many others fled hard economic times. It employs 70, has an annual $2.7 million payroll, contributes about $65,000 a year to the city in taxes, and graduates dozens of hairdressers who work in salons throughout Chicago. In some ways, Passage is the sort of rags-to-riches success story the city likes to hype, not battle. "I began in 1962 with five students in a room I rented in this very building," says Passage, who came to Chicago from Holland in the late 50s. "Now we have affiliates all over the world. And I run it all from this building on Howard Street."

According to Passage, he's sunk hundreds of thousands of dollars into the building he bought in 1979, repairing the elevators and remodeling almost every floor. "We have our photo studio here, we have classrooms, we have our designers--this is where we produce catalogs and books," says Corrine Passage, Leo's daughter and chief aide. "We believe in Rogers Park. My dad raised our family here. We want to stay here because we like the neighborhood, and many of our employees live here."

Apparently the Passages didn't always feel that way. In 1994 they put the building up for sale (asking, they say, $825,000). "We had a high default rate on our student loans," says Corrine Passage, "and we felt that maybe it wasn't working here to run a school." But by November 1996 they had changed their minds. "We brought our default rate down," she says. "We were taking in fewer students by being more restrictive in our admissions. We closed a few classrooms, but we want to stay."

It was at about this time that the shopping mall, known as Gateway Plaza, finally began coming together after many years of talk and planning. By 1996 Mulder had struck a development deal with DevCorp North, the local chamber of commerce; eventually he signed lease agreements with Dominick's, Cineplex Odeon, Marshalls, and LaSalle Bank, while convincing My Place For?, the area's most popular restaurant, to remain. (Las Palmas, another popular Howard Street restaurant, moved out of a building that was demolished. But Mulder says it'll return once the mall's completed.)

The downside was that almost all of the grand old buildings along Howard and Clark had to be demolished to make way for the mall, a low-lying edifice that resembles one of those concrete wastelands out by O'Hare. A few preservationists grumbled about the tacky design, and one or two old-timers reminisced about the good old days when cities looked like cities and not strip malls. But most everyone else sang songs of praise. Ground was broken at a summer ceremony attended by about 300, including Mayor Daley, and much of the land has been cleared.

The Passages say they welcome the mall--they just can't understand why their building has to go. "They say they need to get rid of us for a clear sight line, that passing motorists have to be able to see the Dominick's as they come up from Evanston," says Leo Passage. "I don't believe that. I can't believe that a compromise design can't be drawn which allows us to stay. But they wouldn't listen. I think there's a hidden agenda and they want to rent out space for something else."

Furthermore, the Passages say Moore and the developers have treated them as unwanted intruders. "We were not invited to DevCorp's planning meetings," says Corrine Passage. "I was at a meeting where one of the developers was talking about the project, and I asked, 'What's the status of Pivot Point?' Apparently she didn't even recognize me, because she said, 'Unfortunately, the owner has let it decay.' How could she say that? We put a lot of money into the building. It shows they were just writing us off."

Over last summer and into the fall, the Passages say they pleaded with Moore, Mulder, and DevCorp's executive director, Mari Gallagher, to change the plans to let them stay. "We told them we didn't want to negotiate over a sales price because we didn't want to sell," says Leo Passage. "We went to Joe Moore with our plans to build the shopping mall with our building here. And he told us, 'I don't want to see your plans. I don't want to give you any false hope. Because this is a done deal--you're history.'

"They offered us $700,000 to sell our building. When we told them we wanted to stay in the area they made an offer to move us to another building. But that offer was insulting. It was not an even swap for what we have. They wanted us to lease less space than we now own at three times what we currently pay. I don't understand how Joe Moore can say he offered us all sorts of stuff when the only thing he offered us is no good."

Moore, Mulder, and Gallagher disagree on almost every point the Passages make. For starters, they say it's ludicrous to think the Passages are being offered less than full value for their property, since it was on the market in 1996 for $675,000 (not the $825,000 the Passages say). Mulder says he offered the Passages more than $700,000 (he won't say how much more) or an opportunity to move into the mall. "I don't want to get into a public pissing match with anyone, so I'll just say that we all have to take responsibility for our actions," says Mulder. "We put something out there in a fair way and they, for whatever reason, turned us down. We have our heart and soul in this deal. We have put a lot of time and millions of dollars of investment on the line. We're not taking anything from anyone. People will get paid for their property. They [the Passages] will get fair market value."

Moore, who has staked his political fortunes on the project's success, questions the Passages' motives even as he welcomes them to stay. "Oh, I see it's just a coincidence that they pulled their building off of the market as soon as the developer offered to buy it," says Moore. "Please, don't be naive. This is all about money. This is all about trying to use the media to paint yourself as the little David up against the big, bad Goliath so you can get the best deal you can. I'm told that this is not uncommon in these sorts of deals, where there's one holdout who's thinking he's sitting on a pot of gold. I respect that they're driving a hard bargain--they want to get the biggest price possible for their building and they're willing to hold the process hostage to do that. But I can't let this deal die. It's too important for Rogers Park--we've been waiting too long to get a major grocery store. This plan has been approved by nearly every major community group. It's been through the Chicago Plan Commission and the City Council. It's been reviewed to death. We need this project. Think about this. There's going to be a Dominick's, a Cineplex Odeon, a Marshalls, a Hollywood Video--we're not clearing buildings for a big skating rink. Those deals are inked. We can't let it die because one business is unsatisfied.

"I respect what Pivot Point has done for Rogers Park. They're a great local institution. I'm willing to do what I can to find them another space. But as much as I respect them, we can't have them at the spot and have the shopping center too. Every planner will tell you, you can't have a successful shopping center practically hidden behind a big building."

But the Passages' version of what price Pivot Point was asking for its property is backed up by a letter from its real estate company. Neither Mulder nor Moore offered any evidence to support their accounts. In addition, Pivot Point didn't pull its property off the market "as soon as the developer offered to buy it," as Moore says. According to the real estate firm, Leo Passage received a "letter of intent to purchase" from Mulder on February 28, 1996, and removed his property from the "sale market" on October 28, 1996.

In the last few weeks some locals--most notably the Rogers Park Community Action Network--have taken the Passages' side. One local architect even drew a rendition that would build the mall around the Pivot Point building.

Moore, Mulder, and Gallagher remain unconvinced. As a result, Leo Passage has hired a lawyer from former state senate president Phil Rock's firm to fight the demolition notice. But case law in this sort of eminent domain matter favors the city; unless Rock can use his political connections to win a City Hall reversal, a judge probably will order the Passages to evacuate while they haggle with the city in court over an asking price. Sometime in the summer or fall their building will come down, regardless of the Passages' vows of defiance.

"They say I want more of their money, but I don't want their money," Leo Passage says. "This is not about money. This is about staying in the community. They should call my bluff--offer me to stay and I will stay. I won't take any of their money. They say they need this building to build a mall. Come on, there's got to be more than one way to build a mall." o

Art accompanying story in printed newspaper (not available in this archive): Leo and Corrine Passage photo by Jon Randolph.

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