2 aldermen fronted measures for embattled Ald. Edward Burke that benefit his law clients

In a sharp break from City Hall convention, two Chicago aldermen fronted measures for now-indicted Ald. Edward Burke that would bring millions of dollars in property tax breaks going to Burke’s law clients in his Southwest Side ward.

By putting their names on a half dozen measures involving businesses in Burke’s ward, Ald. Patrick Daley Thompson (11th) and former Ald. Michael Zalewski (23rd) allowed Burke to get around the city’s conflict-of-interest rules, a Better Government Association investigation has found.

Some of the tax-break measures came as federal agents were working to build the racketeering and bribery case that accuses Burke, the longest-serving alderman in Chicago history, of trying to shake down businesses to hire his law firm for property tax appeals.

In two instances involving Thompson and Zalewski, Burke’s name and ward number initially were on official documents but were scratched off before the votes, with the other aldermen’s names and ward numbers penciled in as sponsors of the measures.

Thompson and Zalewski, who retired last year, sponsored the six tax-break resolutions since 2011 for industrial businesses in Burke’s 14th ward whose owners were clients of Burke’s law firm, Klafter & Burke.

Aldermen rarely sponsor resolutions that don’t involve their own wards. Of the 123 industrial tax-incentive resolutions filed since 2011, the only ones not sponsored by the local alderman were those Thompson and Zalewski pushed through in Burke’s ward.

Thompson acknowledged he was asked to introduce the resolutions because Burke “had a conflict.”

“It is not uncommon for an alderman to introduce an ordinance for the local alderman if that alderman has a conflict,” Thompson said in an email in response to questions. “According to the corporation counsel, it was appropriate to introduce said resolution because the local alderman had a conflict.”

Rich Hein / Sun-Times file

The tax-break measures were approved by then-Mayor Rahm Emanuel’s planning department and then the Chicago City Council.

“These projects are heavily scrutinized by the Department of Planning and Development” and not brought to the city council until that agency has “determined it is a good project for the city,” Thompson said. “The department approved and supported the resolutions.”

One of the tax breaks could save a Burke client $3.1 million over 12 years, according to City Hall.

Jared Rutecki / BGA

Despite his legal troubles, Burke, who was first elected in 1969, was re-elected in February. But he resigned as chairman of the council’s powerful finance committee following his arrest and filed papers in April withdrawing from Klafter & Burke. His daughter is still with the firm. It isn’t known whether the alderman is still getting any payments from the firm.

Burke, who has pleaded not guilty to the racketeering and bribery charges, didn’t return calls or respond to questions sent to him.

Charles Sklarsky, a criminal defense lawyer representing him, wouldn’t comment.

Zalewski, whose home was searched this spring by federal agents as part of what sources said was an investigation seeking records regarding Illinois House Speaker Michael Madigan, didn’t return calls.

Brian Jackson / Sun-Times

Zalewski attorneys Thomas Breen and Rob Stanley said in a written statement: “We are confident Alderman Zalewski followed all applicable city council rules regarding substitute filing when a colleague perceives a conflict of interest.”

Thompson has come under scrutiny as part of a federal investigation involving a failed bank in Bridgeport, the Chicago Sun-Times reported in April.

Burke has supported Zalewski and Thompson with thousands of dollars in campaign contributions, records show.

Though the city ethics code bars aldermen from voting on matters that affect their business clients and from contacting city officials on behalf of their clients, Burke wrote a letter on behalf of one of the clients and voted in favor of a tax break resolution that benefited another, the BGA found.

Citing the conflict-of-interest rules, Burke has declined to vote 462 times since 2011, more than any other council member, in some of those cases on matters involving the tax-break resolutions Thompson and Zalewski sponsored for Burke clients.

The tax breaks — called 6b incentives and lasting 12 years — are much sought-after because they sharply lower the assessed value of an industrial property, which normally is assessed at 25% of its market value. A 6b designation drops the assessment to 10% for the first 10 years of the tax cut. The breaks aim to encourage businesses to build new facilities, rehabilitate existing buildings and find new uses for abandoned structures.

These tax breaks have to be approved first by the city and then by the Cook County assessor.

In a cornerstone of what’s been known in Chicago as aldermanic prerogative, the city planning department required the local alderman to support these projects. That alderman typically writes a letter of support and sponsors the resolution the city council votes on.

“You had to have the local alderman’s support,” said Andrew Mooney, a former Chicago planning and development commissioner. “If the local alderman didn’t approve it, it was not going to go.”

On her first day in office, Mayor Lori Lightfoot issued an executive order curbing some of that aldermanic power. That resulted in the planning department announcing it “will no longer require a letter of support” for tax incentives and other programs.

One of the tax breaks involving the other two aldermen for a project in Burke’s ward was for a Brite Logistics trucking company warehouse at 5000 S. Homan Ave. Brite Logistics’ owners first filed for the break in April 2015. The following month, they hired Klafter & Burke to handle property tax appeals, records show. The company closed on the purchase of the property that June.

Records show that between 2015 and 2018, the company spent more than $5 million rehabbing the building. And Burke’s law firm twice won tax reductions for them using the Cook County appeals process, arguing that the property was still vacant.

In 2018, the company sought the council’s support for the 6b break, which the city estimated could save it $1.3 million over 12 years.

According to a June 5, 2018, memo by city planning officials, “Alderman Edward M. Burke is in support of the proposed 6(b) designation” and “would testify in favor of the project.”

Three weeks later, Emanuel’s law department prepared the resolution to be presented to the city council, with Burke’s name and ward typed on the document.

But when the resolution was introduced the next day, Burke’s name and ward number were crossed out, substituted with Thompson’s name and ward written in by hand. The resolution passed, with Burke abstaining.

Brite Logistics then went to the county assessor, seeking final approval for the tax break but didn’t get it for 2018 because it wasn’t fully occupied. It can apply again this year.

The Homan Avenue warehouse’s previous owner, Sitex Group, which develops and invests in industrial real estate and hadn’t hired Burke’s law firm, had spent eight months unsuccessfully seeking to get the alderman’s support for a 6b incentive for the same property.

In April 2014, Sitex signed a contract to buy the then-vacant, 128,000-square-foot warehouse. The paperwork included a clause that said: “this Contract is contingent upon Buyer securing a 6B resolution and support from the City of Chicago and Alderman Edward M. Burke.”

In December 2014, records show the contract was rewritten because “despite diligent efforts by both Parties, Purchaser has been unable to obtain the required support for the Incentive.”

Sitex now would agree to buy the property without the 6b break for $3 million — $425,000 less than the previously agreed-on price. But the revised contract said the price would go back to $3.425 million if Sitex could “obtain a letter of support from Alderman Burke” before the deal closed.

It didn’t. The sale closed in January 2015 — for $3 million.

Saying it would spend $800,000 to renovate the property, Sitex sold it to Brite Logistics in June 2015 for $5 million. The new owners had hired Burke before closing the deal.

Neither Brite Logistics nor Sitex responded to messages or emailed questions.

Thompson sponsored two other tax-incentive requests for Burke clients in the 14th Ward, including one that Burke voted for that won council approval this past April, three months after Burke’s arrest. That resolution benefited Amigos Foods, a meat-processing company Burke’s law firm began representing in August 2018. That was after Burke, in his official capacity, helped rezone former railroad land at 51st Street and St. Louis Avenue that’s now Amigos’ main processing and warehouse facility. Klafter & Burke represented another Amigos property on the Southwest Side, records show.

Thompson introduced the 6b resolution for the 51st and St. Louis property last October, and it passed the council in April without opposition, getting Burke’s vote.

The tax break could be worth hundreds of thousands of dollars a year for the $25 million, recently opened Amigos facility, though the precise value won’t be known until the assessor’s office approves the break and assesses the new construction.

Manny Rangel Jr., Amigos’ chief financial officer, wouldn’t comment.

Thompson also sponsored a resolution to give a tax break to Bond Corp., a specialty cleaning-cloth company that moved to the 14th Ward in 2011 after a fire destroyed its facility on the Near West Side.

A year after Bond bought a 50,000-square-foot industrial building near 42nd Street and Kildare Avenue to be its manufacturing headquarters, it hired Burke’s law firm for property tax appeals, records show.

The building already had a 6b exemption when Bond bought it. In the fall of 2015, the company applied to renew the exemption for another 12 years.

City Hall records show the planning department officials asked Bond’s owners to submit a letter of aldermanic support.

James FortCamp, Bond’s lawyer, responded in a Dec. 14, 2015, letter: “Note that the property is located in Alderman Burke’s ward. My client has reached out to Alderman Burke’s office and was informed that an Aldermanic letter of support cannot be issued (however, they do not object to the renewal) due to a conflict of interest.”

A few months later, the resolution authorizing the renewal came to the city council for a vote — with Thompson the sponsor. The measure — which city officials projected would save the company $232,000 over 12 years — was approved. Burke abstained. The assessor’s office approved the tax break.

FortCamp and Bond representatives didn’t respond to efforts to reach them for comment.

Zalewski sponsored three tax-break resolutions benefiting Burke clients.

In 2013, General Truck Parts & Equipment, a longtime Klafter & Burke client, bought a 135,000-square-foot industrial facility at 40th Street and Karlov Avenue in Burke’s ward for $2.1 million.

Two months later, Burke wrote to Mooney, then the city’s planning and development chief, offering his “full support” for General Truck’s plan to seek a 6b tax break to rehabilitate the property, which he said had been unoccupied since 2009. Burke wrote that the project would bring “a great enhancement of the neighborhood and new employment opportunities.” He didn’t say in the letter that General Truck was a client.

Records show General Truck had been a client of Burke’s law firm since at least 2007 and had made $26,000 in campaign contributions to Burke’s political funds since 2000.

When the resolution came before the council in 2014, Burke’s typed-in name and ward number had been crossed off by hand, and it was signed by Zalewski. The council passed the measure, with Burke abstaining.

“It was up to the developer/owner to work out the politics and deal with the alderman,” according to Mooney, who said the local alderman typically would play a key role in passing such incentives.

General Truck, which didn’t respond to requests for comment, saved an estimated $171,000 on its 2017 and 2018 taxes.

Another longtime Klafter & Burke client, which has had a 6b exemption on its 14th ward property since the mid-1990s, got a second renewal in 2016 thanks to a Zalewski resolution.

In 1995, Burke had pushed the initial tax-break resolution for J.B. Hunt Transport Services’ trucking facility at 47th Street and Hamlin Avenue. The company began using Burke’s law firm for property tax appeals that year, records show. In 2005, the company got its first renewal of the tax break, with Burke abstaining from voting.

In May 2016, the company asked for a 12-year renewal, with Zalewski sponsoring the measure. It was approved, and again Burke abstained.

The economic disclosure report Burke filed with City Hall for 2015 shows J.B. Hunt paid him at least $25,000 that year for legal work.

J.B. Hunt, which didn’t respond to requests for comment, saved roughly $185,000 in 2017 taxes and $183,000 in 2018 taxes. It will save $3.1 million in taxes over the 12-year renewal period, allowing Hunt to afford $4.5 million in improvements, according to an announcement at the time from Emanuel’s office.

In 2017, Zalewski sponsored a resolution for The Marvel Group, a Burke client in the 14th ward.

“I am issuing this letter of support in place of 14th Ward Alderman Burke, because of his past legal work done for The Marvel Group, and the intent to avoid any possible appearance of conflict,” Zalewski wrote in March 2017 on behalf of the manufacturer of office and school furniture at 43rd Street near Hamlin Avenue.

Records show Burke’s firm handled property tax appeals for the factory since at least 2009. In paperwork filed with the city, The Marvel Group said it needed the incentive to rehab the building.

The incentive passed and has saved it an estimated $91,000 in a year, records show. Burke abstained from voting.

Marvel representatives didn’t respond to messages or emailed questions.

Chuck Neubauer and Sandy Bergo are reporters for the Better Government Association.