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Developer of Old Main Post Office cooperating in federal investigation of Burke

Ald. Ed Burke (14th) walks in to the Dirksen Federal Courthouse on Jan. 3 after being charged with attempted extortion. | Ashlee Rezin / Sun-Times

The developer of Chicago’s Old Main Post Office is cooperating with federal investigators working to build a corruption case against Ald. Edward M. Burke (14th), the now-deposed chairman of the City Council’s Finance Committee, according to a source familiar with the investigation.

For more than two decades, Harry Skydell has served as director of acquisition and development for 601W Companies. He could not be reached for comment. The nature and extent of Skydell’s cooperation are not known.

But it helps to explain why a file on the Old Main Post Office was among the items seized from Burke’s Finance Committee’s suite on the third-floor of City Hall during an infamous Nov. 29 raid that saw federal agents cover the glass doors with brown butcher paper to conceal the search inside.

On Feb. 26, 2018, the giant hulk of a building that hovers over the Eisenhower Expressway got a major boost from the Finance Committee long before Burke was deposed after being charged with attempted extortion.

Aldermen signed off on a Class L property tax break that’s expected to save 601 W LLC $100 million over the life of the project.

Chicago’s Old Main Post Office building seen from the Van Buren Street bridge.
The Old Chicago Main Post Office building seen from the Van Buren Street bridge. | Colin Boyle/Sun-Times
Sun-Times files

Two days later, Burke motioned the full City Council to approve the tax break and cast his own vote in favor of it. There is no evidence that Burke represented the Old Post Office on any property tax appeals before the assessor or the Cook County Board of Review.

Burke has denied doing anything improper and has not been accused of any wrongdoing regarding the Old Post Office property. Burke did not return a message for comment. Nor did the U.S. attorney’s office.

At the time, Zoning Committee Chairman Danny Solis (25th) was secretly recording more than a dozen conversations between Burke and movers and shakers seeking city assistance. Solis could not be reached for comment Thursday.

The Class L property tax break allows designated landmarks to be taxed at a rate of 10 percent of assessed valuation for the first 10 years — a 60 percent tax break each year. Then they are taxed at 15 percent for the 11th year and at 20 percent for the 12th.

But it’s only available to building owners who agree to invest at least half of the value of the landmark building in an approved rehabilitation project.

The other portion of the assessment, the land portion, is also eligible for the incentive if the building has been vacant or unused continuously for the prior two years.

The Post Office qualified on both counts, aldermen were told on that day, in part, because it has been “vacant and deteriorating for more than 20 years.”

The furor over the unfairness of how Cook County property is assessed in the decades-old system administered by now-former Cook County Assessor Joe Berrios was much on the minds of aldermen during the Post Office debate.

That’s apparently why Solis took pains during the Finance Committee debate to defend the $100 million tax break.

“All of this development is good for the city. We’re talking about jobs. We’re talking about tax revenue. We’re talking about more people moving into the city,” Solis said then.

Skydell manages a portfolio of buildings that is largely Manhattan-based. But he also played a pivotal role in high-profile Chicago projects, including the Prudential Plaza.

Three years ago, Mayor Rahm Emanuel’s bold threat to seize control of the Old Main Post Office culminated in a court-approved agreement with 601 Companies LLC to begin a five-year, $500 million renovation and restoration.

On Thursday, Planning and Development Commissioner David Reifman said he was not aware until he read about it in the newspaper that the Post Office file had been seized from Burke’s office.

Nor has the commissioner been questioned by federal investigators about Burke or Solis or the role either alderman played in the Post Office project.

Although Emanuel played hardball to jump-start the long-stalled project, Reifman said he’s confident that everything about the Post Office was “completely above-board.”

“Everything we did had to do with making that white elephant a true asset for Chicago . . . That’s borne out by the fact that Walgreens . . . and two other companies have chosen to locate there.”

As Zoning Committee chairman and alderman of the ward that includes the Main Post Office, Solis was rightfully involved in deliberations, Reifman said. But that had “nothing to do with our decision-making,” he said.

“We developed the strategy to dislodge the Post Office from an owner who was . . . basically letting the asset rot and ruin and be a drain on our economy,” he said.

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