The purchase was intended to develop that site into a downtown pocket Park. The Board unanimously agreed to purchase the vacant lot once home to the Countryside Restaurant for $420,000.00. Please see Appendix 1, An Ordinance Authorizing the Acquisition of Real Estate, date August 2, 1999, obtained through Freedom of Information.
On the same day of Board approval, August 2, 1999, Village President Arlene Mulder individually with Campbell St. Partners executed the Real Estate Contract for purchase of 1 W. Campbell St. Please see Appendix 2, Real Estate Contract, date August 2, 1999 obtained through Freedom of Information.
The future pocket Park was owned by a land trust known as Campbell Street Partners. (Daily Herald, Jon Davis, 8/03/99). Stated as Seller on the Real Estate Contract, Appendix 2 is Campbell Street Partners as sole beneficiary and holder of the power of direction in Parkway Bank and Trust Company’s Trust number 9500. As Seller Campbell Street Partners included the signature of Mr. Donald J. Storino.
Mr. Donald J. Storino of the law firm Storino, Ramello and Durkin, is based in Rosemont, Ill. Storino, Ramello and Durkin provides services as general corporation counsel to local governments on matters such as land use and zoning, eminent domain and tax incremental financing. (http://www.srd-law.com/).
A ‘Vendor and Account Activity Listing’ on August 31, 1999 from the Village of Arlington Heights shows Storino, Ramello and Durkin, escrow and property purchase through TIF 1 South Fund. Please see Appendix 3, Vendor Activity Listing dated 08/31/99, obtained through Freedom of Information.
As Table 1 shows according to the Illinois State Board of Elections Storino, Ramello and Durkin have been frequent contributors to Mrs. Arlene Mulder’s campaign since 1994 through the current election of 2009.
The table represents contributions greater than or equal to $150 per donor. Amounts below $150 are not required to itemize according to Illinois State Board of Election rules. Many contributions fall under the reporting limit.
The pocket Park purchase price was $420,000.00. Development costs were eventually $11,335.00 paid to 3D Design Studio. Both expenditures would come from Tax Incremental Financing (TIF) District I South funds. There was no state grant money used for this project. (Village of Arlington Heights, Freedom of Information).
TIF (Tax Incremental Financing) districts are assigned by a municipality to a specified area in which a baseline value is assessed. The amount above the baseline, the increment, goes to the municipality for developmental expenditures within the TIF district. Please read The Nature of Local Economics that discusses the abuse of T.I.F.'s by the Village Board.
Flipping During the Hottest Real Estate Market in Recent History
For reasons not clear the pocket Park never developed into initial expectations. The Arlington Heights Park District did not get involved as planned nor was the pocket Park formally named.
The fate of pocket Park was informally sealed when the Village purchased another vacant lot, now Harmony Park on Campbell and Vail St., in October 2000. The Village purchased Harmony Park for $665,000 from A&T Investments Inc., a company owned by Mr. Mark Anderson and Mr. Greg Trapani, president of Trapani Constructin Co. (Daily Herald, Jon Davis, 10/03/00, Illinois Secretary of State business directory).
On November 17, 2003 Trustee Joe Farwell moved, Trustee Tom Stengren seconded the motion to conditionally accept a bid of $465,000 from Banbury Investments for the pocket Park and a separate Village Service Area parcel . The bid from Banbury was the only sealed bid submitted and was the minimum bid specified in the Request for Proposal. (Village Board Minutes, 11/17/03).
The conditional bid of $465,000 was break-even to the Village acquisition cost of the two parcels. Several conditions had to be met and endorsed by the Arlington Heights Plan Commission before the deal would be complete.
After ‘Citizens to be Heard’ all board members voted AYE except Trustee Virginia Kucera to conditionally accept the bid of $465,000 but retain ownership of the two parcels until all conditions were met. The Plan commission was now to review the project. (Village Board Minutes, 11/17/03).
Finally on March 7, 2005 Trustee Thomas Hayes moved, Trustee Joe Farwell seconded to sell the pocket Park and the Village Service Area to Banbury Metrolofts LLC for $465,000. All trustees voted AYE except Trustee Virginia Kucera, (Village Board minutes, 3/07/2005). Please See Appendix 4, An Ordinance Authorizing the Execution of Real Estate Contract, dated March 7, 2005, obtained through Freedom on Information.
Oddly The Village Board vote on March 7, 2005 occurred after the contract was already executed. Since the real estate contract between Banbury Metrolofts LLC as purchaser and The Village of Arlington Heights as seller was signed by Mrs. Arlene Mulder individually with Mr. Dennis L. Hesse, managing principal, on March 2, 2005. That is five days prior to Board approval of the ordinance. Please see Appendix 5, Real Estate Contract dated March 2, 2005, obtained through Freedom of Information.
[ The $465,000 bid covered the Village original acquisition cost of the pocket Park ($420,000) and the Service Area. The Service Area parcel is between Dunton Tower and Regina’s purchased in the 1980’s. (Village Board minutes, 11/17/03)
The land sale transaction would not occur until, the zoning process is complete, outstanding issues are to the satisfaction of the Board, acceptance of bid does not approve Redevelopment Project, Village can reject bid if Redevelopment Plan is not acceptable. (Village Board minutes, 11/17/03). ]
The Illinois Secretary of State directory of business lists the principal managers of Banbury Metrolofts LLC as Mr. Dennis L. Hesse and Mr. Peter D. Connolly. Both gentlemen have partnered with Mr. Mark Anderson, a local developer who eventually sold the Metropolis Performing Arts Center to the Village of Arlington Heights in June 2004 for $2.1 million. (Daily Herald, Amy McLaughlin, 12/22/04).
As table 2 shows according to the Illinois State Board of Elections Mr. Dennis L. Hesse and Peter D. Connolly are also frequent contributors to Mrs. Arlene Mulder’s campaign, from 1997 through the current election of 2009.
Mary K. and Peter D. Connolly are lawyers for Storino, Ramello and Durkin and have contributed to Citizens for Arlene Mulder as table 2 below shows. Mary K. Connolly has represented clients such as Visconsi Companies d/b/a Town and Country Chicago Associates, L.L.C. in T.I.F negotiations before the Village Board. Please see Appendix 6 and table 2 below:
Flipping, the practice of buying and selling real estate was common during the hyper charged years of 1999 through 2005 when the Village conditionally owned the Park/lot. As the graph indicates flipping real property between 1999 and 2005 could have been lucrative.
For example according to the graph if you bought a house in 1999 for a nominal price of $150,000 and flipped it in 2005 for $240,000, for $90,000 profit in 6 years, average gain of $15,000/year, approximately 10% per year.
Given the graph was based on Metropolitan Chicago Area housing prices and the pocket Park site was to be used for housing. Still one might expect something better than a break-even return (not including development costs) on two parcels of real property located in a vibrant downtown during a real estate boom.
Trustee Tom Stengren, a realtor, defending the sale said the Village is not giving the land away, but selling it at a fair price. “We would be remiss…if we do not take this money and run”, Trustee Helen Jensen added. (The Daily Herald, Jon Davis, 11/18/03)
The Struggles of a Pocket Park
A smoldering issue in the local elections of 1999 was the heavy handed manner in which the Village Board was perceived in developing the downtown area. People wanted green space downtown. Acquiring this vacant lot appeared to be a conciliatory gesture at addressing that demand. A temporary pocket Park did somewhat evolve at the site.
Grass and a few benches did show up. Trustee Virginia Kucera informally named it ‘Cartwheel Park’, after seeing a girl turn cartwheels there one day. By December 2002 the second annual Village’s Emergency Assistance Program was using Cartwheel Park for ‘Take a Bough’ project where at least $1,875 of gift certificates was raised (The Daily Herald, Jon Davis 12/23/02).
Requiem for a People’s Park
Let us summarize. In market trader's parlance the Village "bought at the offer price" and "sold at the bid price". This is called making a market or losing the spread. Only in this case the Village was losing the spread to Mrs. Mulder's campaign donors.
So your tax dollars were used to make a real estate development market downtown to parties that contribute to Mrs. Mulder and the Village Board. Trading parties with the Village on both sides of this transaction were campaign contributors.
Even though all acts were technically legal, questions arise as to being proper. The nagging question of campaign contributions continue to surface. What influence did political connections or clout have on the outcome? How serious was the Board about a pocket Park in the first place? Or was Cartwheel Park a mere pawn in the downtown development game?
The short and rocky life of Cartwheel Park may have taught us something about local government. That is the best intentions of public officials even at the local level could be thwarted by outside money interests. Elected officials at all levels of government and voters alike must remain vigilant to any action that may usurp our representative democracy.
References:
Attorneys’ Title Guaranty Fund Inc., One South Wacker Dr., 24th Floor, Chicago, Il. 60606-4654
Cook County Recorder of Deeds, 118 N. Clark St, Chicago, IL 60610 http://www.ccrd.info/
Daily Herald, 155 E. Algonquin Rd. PO Box 280, Arlington Heights, IL. 60005
Douglas, Paul, United States Senator from Illinois, Ethics in Government, Greenwood Press, Publishers, Westport Connecticut, 1952.
housingbubble.jparsons.net, Graphs, Chicago, Metropolitan Area Housing Prices, 1987-2008.
Illinois State Board of Elections, 100 W. Randolph St. #14-100, Chicago, IL. 60601 http://www.elections.state.il.us
Moore, Mark H and Sparrow, Malcolm K. Ethics in Government: The Moral Challenge of Public Leadership. Prentice Hall, Inc. 1990.
Storino, Ramello and Durkin. 9501 W. Devon Ave., Rosemont, Ill. 60018 http://www.srd-law.com
Village of Arlington Heights, Village Hall, 33 S. Arlington Heights Rd. Arlington Heights IL 60005. Freedom of Information Act
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