For 10 years, Sterling Bay, one of Chicago’s biggest developers, used Ald. Edward M. Burke’s law firm Klafter & Burke to seek property tax cuts. But not anymore.
The firm behind the massive Lincoln Yards development proposed for the North Side has cut ties with Burke now that the alderman faces a corruption charge that threatens to send him to prison and end the reign of Chicago’s longest-tenured and most powerful City Council member.
“Klafter & Burke does not currently work on any property in our portfolio,” according to Sarah Hamilton, a spokeswoman for Sterling Bay, which also is heavily involved in the bustling Fulton Market area west of the Loop. “We have worked with Klafter & Burke in the past, and the firm had some involvement on a limited number of our properties.
“But given recent events, we have terminated the use of their services. Currently, Klafter & Burke has no work with Sterling Bay.”
Another big developer, Related Midwest, which is partners in plans to develop 62 acres in the South Loop, also has dumped Burke as its property tax lawyer.
“The company is no longer engaged with the firm Klafter & Burke,” says a Related spokeswoman, who downplays the Burke firm’s role, calling it “one of many firms that worked on this project.”
Burke’s four-person law firm specializes in handling property tax appeals. It does that largely by seeking reductions in the property assessments that heavily determine the amount of those taxes.
Its clients have long included companies that do business with or need a variety of approvals from City Hall.
Burke, 75, has been alderman of the 14th ward on the Southwest Side for 50 years. Now seeking re-election next month, he’s battling for his political life after being charged by federal authorities earlier this month with attempted extortion.
Burke faces a single federal charge that accuses him of stalling the approval of city permits that a Burger King franchisee was seeking in his ward while pushing the fast-food operator to hire his law firm to handle property tax appeals for its restaurants.
After Burke was charged, Mayor Rahm Emanuel forced him to step down as chairman of the City Council Committee on Finance, which would need to approve an $800 million taxpayer-funded subsidy for Lincoln Yards that the developer is seeking. Burke also was dumped from the Chicago Plan Commission that’s expected to vote on Lincoln Yards later this month.
As part of the ongoing federal investigation, a judge gave the FBI permission to secretly wiretap Burke’s cellphone from the spring of 2017 through November 2018, when his City Hall and ward offices were raided.
Federal agents eavesdropped on 9,794 conversations during the first nine months of that time, court records show. They continued to secretly listen to him for another 10 months after that, though they haven’t disclosed how many more conversations they heard.
During the time agents were monitoring his conversations, county records show Burke’s law firm filed 1,598 property tax appeals with then-Cook County Assessor Joseph Berrios and 915 with the Cook County Board of Review, which hears appeals of the assessor’s decisions. Most of those appeals were unsuccessful, failing to result in a tax cut.
Sterling Bay was among Klafter & Burke’s tax clients during the time federal agents were listening in. It hired the alderman’s firm to handle appeals on real estate holdings that include vacant land that’s part of the proposed Lincoln Yards development.
In 2017 alone, Klafter & Burke filed 29 appeals for Sterling Bay, records show. In addition to the sprawling Lincoln Yards project straddling the Chicago River between Lincoln Park and Bucktown, those appeals included property in Fulton Market on the Near West Side.
Burke’s firm convinced Berrios or the Board of Review to lower their estimations of the values of Sterling Bay’s properties in seven of those cases. That cut Sterling Bay’s taxes on those properties by a total of 28 percent, saving the developer $328,272 in property taxes paid last year, a Chicago Sun-Times analysis found.
Burke’s firm filed five more appeals for Sterling Bay last year, getting Berrios to reduce the property values in four of those cases, including acres of vacant land in the Lincoln Yards property. Just how much that ends up saving the developer can’t be calculated until the next real estate tax bills are finalized this summer.
Asked how Sterling Bay came to hire Burke’s firm, Hamilton says the company “was introduced to Klafter & Burke by mutual friends.”
Roosevelt/Clark Partners LLC was another Burke client during the time the feds were listening.
That group, which includes Related Midwest, has been trying to develop a long-vacant 62-acre former rail yard along the Chicago River in the South Loop that’s owned by Nadhmi Auchi, an Iraqi businessman living in England. Auchi was once partners on that property with Tony Rezko, the onetime friend of and political fixer for former Gov. Rod Blagojevich. Rezko went to prison after being convicted in 2008 of crimes that included shaking down companies that were seeking state business.
Now, Auchi is partners with Related Midwest in the massive South Loop development south of Roosevelt Road that they’ve dubbed “The 78” — because they say it would become the city’s 78th neighborhood.
The developers — who are planning residential, commercial and entertainment components for the property — also are seeking a taxpayer subsidy of millions of dollars from City Hall.
Burke’s firm unsuccessfully tried to convince Berrios to cut the value his staff placed on the vacant land.
Law firms typically collect either a percentage of any property tax cuts they win for clients or a flat fee.
Other tax clients Klafter & Burke represented during the course of the federal investigation included:
• Medline Industries, a medical supply company that owns the former Michael Reese Hospital site on the south lakefront.
Burke got Berrios to reduce the property assessment for Medline’s headquarters in Northfield. That cut the company’s property tax bill last year by 18.6 percent, saving it $546,598 — the biggest tax break Burke’s firm won in 2017, which was reflected in last year’s tax bill.
Burke didn’t file any appeals over the former site of Michael Reese Hospital, which former Mayor Richard M. Daley had City Hall buy and demolish as part of his failed plan to lure the 2016 Summer Olympics to Chicago.
The Mills family who own Medline wouldn’t comment.
Under Daley, the city agreed to pay nearly $100 million over time for the property, a bill that taxpayers are still paying for.
• Meaghan Synowiecki, who worked for Burke at the finance committee, and her husband, Michael Synowiecki, a lobbyist with the law firm of Daley & Georges, which represents some city contractors who also have hired Burke to file appeals to cut their property taxes.
Burke got Berrios to drop the assessment on the Synowieckis’ house by 7.8 percent. How much that will save them won’t be known until new tax bills are finalized this summer.
Meaghan Synowiecki is a great-niece of Illinois Supreme Court Justice Anne Burke, Burke’s wife. According to the criminal complaint against the alderman, he directed Meaghan Synowiecki to find out the names of the property tax lawyers the Burger King was using. She hasn’t been charged with any crime.
Michael Synowiecki represents James Bracken, who’s the owner of Brackenbox, which has been supplying dumpsters for city construction work and street sweeping since Daley shut down City Hall’s scandal-plagued Hired Truck Program more than a decade ago in the wake of a Sun-Times investigation.
Bracken and his companies are among city contractors that have turned to Burke’s law firm to seek property tax cuts. Klafter & Burke unsuccessfully tried to get lower property assessments for Bracken’s home and businesses during the past two years.
Michael Synowiecki declined to comment. His wife didn’t return a call.
• Trump International Hotel & Tower Chicago, the downtown riverfront skyscraper built and partially owned by President Donald Trump.
Over the past two years, Berrios and the Board of Review rejected Burke’s law firm’s efforts to lower the taxes on the commercial spaces at Trump Tower owned by the president, as well as the residential units.
Burke’s firm’s representation of the president’s property ended last May.
That was a few weeks after the alderman’s brother Daniel Burke lost a primary election to continue representing a largely Hispanic district in the Illinois House. That defeat largely was blamed on the $14 million in tax cuts the alderman’s firm had won for Trump, whose immigration policies have angered many Latinos.
While working for Sterling Bay, Burke won several tax cuts — including one for 35 percent on a commercial building at 1324 W. Fulton St. that saved the developer $178,330 last year.
Klafter & Burke saved Sterling Bay another $62,206.24 in taxes when Berrios agreed to slash the assessment on the fortress-like former home of the Excalibur nightclub at 640 N. Dearborn St. that Sterling Bay is renovating.
Burke couldn’t get tax breaks for Sterling Bay in 2017 on several other properties, including the Lincoln Yards land and the former West Loop home of Oprah Winfrey’s Harpo Studios, where the developer built the new corporate headquarters for McDonald’s Corp.
Sterling Bay has two registered lobbyists for the Lincoln Yards project: Richard Klawiter, a zoning attorney with the firm DLA Piper, where Emanuel’s planning commissioner David Reifman was a zoning lawyer before moving to City Hall in 2015, and Tim Dart, brother of Cook County Sheriff Tom Dart and a friend and political ally of Burke.
Klawiter contributed $500 toward the unsuccessful 2011 mayoral run of Burke ally Gery Chico, a longtime Burke friend. Chico again is running for mayor and got Burke’s endorsement before the alderman was charged.
Also during the 2011 race, Klawiter contributed $1,500 to Emanuel, who decided not to seek reelection this year.
Reifman gave $1,250 to Chico and $1,500 to Emanuel for the 2011 election. He says his past role at DLA Piper will play no part in how he handles Sterling Bay’s proposal for Lincoln Yards.
“I have had no conversations with Ald. Burke about Lincoln Yards,” Reifman says, nor about tax-increment financing that would fund the project. “I am completely disassociated from DLA and have no ongoing interest in the firm. I represent only the city’s and taxpayers’ interests for each and every project.”
DLA Piper for years has been a campaign contributor to Burke and other politicians. It gave $1,500 to Ald. Brian Hopkins (2nd) in a contribution reported last June. Lincoln Yards is in Hopkins’ ward, so he has a key say in the approvals it needs from City Hall.
Hopkins says DLA Piper has made campaign contributions to him since “long before Lincoln Yards existed as an entity” and that its latest contribution has “nothing to do with this particular development.”
Hopkins says that, with Lincoln Yards on the table, he told Sterling Bay he didn’t want any campaign contributions from the developer or its subsidiaries and hasn’t gotten any since then.
Hopkins says he didn’t know Burke’s firm had worked on tax appeals involving property in Lincoln Yards. “He’s had zero involvement in this project. None of this has ever been before his committee. He’s never weighed in . . . I was unaware he’d done tax work.”
Dart’s lobbying firm Nicolay & Dart gave $500 to Burke’s brother Dan Burke’s campaign fund last year, records show.
During the time that federal agents were monitoring Ed Burke’s phone calls, records show his three campaign funds and two others benefitting his wife and his brother took in a total of more than $3 million.
• Burke’s fight to keep records secret from city watchdog has cost taxpayers $248K