THE WATCHDOGS: To make way for DePaul arena, taxpayers paid $8 million to move historic home

After 126 years, the stately Harriet Rees House was left standing all by itself, surrounded by vacant lots ripe for another expansion of McCormick Place, Chicago’s sprawling convention center.

Then, officials with the Metropolitan Pier and Exposition Authority, the government agency that owns McCormick Place, decided those vacant lots would become the new home for the DePaul University basketball team.

And the Rees House had to go.

Not quite 25 feet wide, the lot at 2110 S. Prairie Ave was the tiniest chunk of land McPier wanted for the arena and event center it’s building. But, based on size, that narrow parcel turned out to be the most expensive property the authority bought for the ongoing project.

McPier paid $450,000 for the land. But that was only a small portion of the total cost, records show. The agency — overseen by appointees of Mayor Rahm Emanuel and former Gov. Pat Quinn — spent more than $8 million to acquire the lot last year, the records show.

Most of that was spent on moving the three-story house and its coach house one block north, to a vacant lot at 2017 S. Prairie Ave., next door to another historic home, the William H. Reid House.

Moving the house has also involved 21 months of legal wrangling, which continues before a Cook County judge over the owner’s claims for repairs and months of lost rent.

Here’s a breakdown of the money taxpayers have spent to move a piece of Chicago’s history:

• $450,000 went to buy the Rees land from the family of Salvatore “Sam” Martorina, an architect convicted in the mid-1990s in a crackdown on slumlords. Martorina now has a city license to run an expediting company that helps contractors get building permits from City Hall.

• $1.88 million went to buy a vacant lot from Oscar Tatosian, the owner of Oscar Isberian Rugs, where the Rees House now sits. Tatosian had bought the lot and the neighboring historic home, the Reid House, in 2002, paying $1.5 million for both properties, which he bought with the help of the law firm Neal & Leroy — the firm McPier later hired to seize Tatosian’s land to give it to Martorina for the Rees House.

McPier’s settlement with Tatosian included $264,206 for his lawyer, Jack George, and George’s firm Schuyler Roche & Chrisham. George spent decades as a partner at the law firm Daley & George with the former mayor’s brother, Michael Daley.

McPier officials say they have no appraisals to determine the value of the land they seized from either Tatosian or Martorina.

• $5.8 million went to contractors, engineers and movers — all hired by Neal & Leroy, on behalf of McPier — to relocate the 762-ton Rees House and its 187-ton coach house to Tatosian’s former property. Among the things that covered were a new foundation, repairs to the interior and exterior of the home, security, landscaping and “labor harmony,” which cost $206,004, according to bills from Bulley & Andrews, the general contractor. The contractor didn’t return calls seeking comment.

As a protected landmark, the Rees House couldn’t be moved without permission from the Illinois attorney general’s office, City Hall and the Landmarks Preservation Council of Illinois.

The landmarks group agreed, according to its president, Bonnie McDonald, out of fear that opposing it might prompt McPier to file suit to demolish the Rees House. The home is one of the few remaining mansions on Prairie Avenue, once home to such prominent Chicago families as the Armours and the Fields.

“It’s our responsibility legally to protect the property,’’ McDonald says. “This was a choice that MPEA made to identify the land for this project. The choice was made to pursue that property knowing that a house with historic value was on it . . . We negotiated with MPEA to save the building.”

McPier spokeswoman Mary Kay Marquisos says the site was “determined to be the most optimal location for the event center . . . very accessible for convention attendees and conveniently located near existing MPEA parking lots and public transportation.”

The event center, which includes the DePaul basketball arena, is across the street from McPier’s offices at 301 E. Cermak Rd. It’s part of a $540 million project that also includes a connecting hotel.

McPier and DePaul are to split the cost of the $140 million arena and event center. McPier will pay for the $400 million hotel, with the help of $55 million in tax-increment financing from Emanuel.

McPier has spent more than $66 million buying land for the hotel and arena. That includes the cost of moving the Rees House.

The authority is funding the project with money it borrowed by issuing bonds that will be repaid with various taxes. The agency now owes a total of nearly $2.7 billion for bonds it’s issued since 1992 and anticipates spending about $11.5 billion, including interest, to repay them by the time they come due in 2053.

The Rees House was built by Harriet Rees, widow of real estate pioneer James H. Rees. She bought the lot for $15,000 and spent $20,000 in 1888 to build the Romanesque Revival structure, which was designed by the architecture firm of Cobb & Frost, according to city records. Rees died four years later. Over the years, the home also has been used as a boarding house and a restaurant.

The Rees House last changed hands in 2001, when it was sold for $750,000 to Ignazio Martorina and his wife Paulette. He was the owner of a bookbinding company who, along with his son, was arrested in 1995 as part of a Daley administration crackdown on slumlords. The Martorinas were charged with misdemeanors, accused of recklessly allowing a 32-unit building at Grand and Ashland to fall into disrepair that resulted in more than 50 code violations. The elder Martorina was found innocent. Sam Martorina was found guilty and sentenced to 200 hours of community service.

Since then, Sam Martorina has become active in politics, giving a total of more than $10,000 to the campaigns of politicians including Ald. Edward M. Burke (14^th) and Ald. Walter Burnett (27^th).

Over the past decade, in addition to operating his business expediting permits at City Hall, Martorina has designed homes in the 11^th Ward built by the politically connected Bertucci family.

The Martorina family obtained landmark protection for the Rees House from the Landmarks Preservation Council in 2007 and from City Hall in March 2012.

Six months after City Hall declared the Rees House a Chicago landmark, Chicago Sun-Times columnist Michael Sneed revealed Emanuel’s plans to build an arena for DePaul near McCormick Place — a project the mayor announced in May 2013.

Neal & Leroy — which McPier and other government agencies routinely hire when they need a law firm to acquire land — then began working to get the Rees House.

One of Neal & Leroy’s attorneys, Meg George, whose father had been retained by Tatosian, filed an application with the city on Feb. 4, 2014, to rezone Tatosian’s land to accommodate the Rees House.

“Meg went in to get the zoning change,” Jack George says. “She was not involved in the condemnation case at all. That would not have been proper for me. I never had one meeting with her. I met with Michael Leroy” — a partner in Neal & Leroy.

Neal & Leroy filed suit in Cook County court on behalf of McPier on March 14, 2014, to acquire the Martorina and Tatosian properties.

On May 30, 2014, Cook County Circuit Judge Robert Lopez Cepero approved the settlement.

Martorina’s compensation included unspecified payments for helping obtain city permits to move his house, court records show.

Martorina “wanted to keep the property,” his attorney Leo Cinquino says. “It was important to his father. They had remodeled it . . . My client gets to keep the house and gets a nice property.”

Tatosian “wasn’t thrilled with all of the property being taken from him,” George says. “They only left us with a 23-foot-wide lot.”

Tatosian was living on the North Shore in 2002 when he paid $1.5 million to buy the Reid House, built in 1894, and the adjacent lot. He began restoring the house, which was placed on the National Register of Historic Places a year after he bought it.

Tatosian says he’s happy with the deal he made to give up the lot, which allowed the Rees House to be placed right on the lot line it shares with Tatosian’s historic home.

Tatosian also had to grant Martorina a permanent easement because Martorina can’t access the north side of the Rees House without crossing Tatosian’s property.

“It’s good for the city,” Tatosian says. “You can’t hold back progress. I admire what the mayor is doing for the city.

“Can you put a price on preserving the history of the city? I think it looks better, the street. I open my house every year for the Glessner House tour. I share it with people. It’s interesting history, interesting architecture. For me, it’s a stewardship.”

The Rees House — which Martorina’s family has leased to tenants —has occasionally been opened to the public for tours, though there’s nothing requiring public access to the home that cost taxpayers a fortune to move.