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Feds cast wide net on Berrios, get records on gov’s Gold Coast mansion, 118 other properties

Prosecutors in Chicago obtained records on a wide range of property tax appeals to then-Cook County Assessor Joseph Berrios. Among the clout-heavy law firms involved are ones headed by House Speaker Michael J. Madigan and Ald. Edward M. Burke.

Joseph Berrios.
Joseph Berrios on federal investigators’ interest in property tax appeals by law firms that contributed to his campaign funds: “It’s news to me.”
Max Herman/Sun-Times file photo

Federal prosecutors have made a series of requests to the Cook County assessor’s office over the past five months for records regarding the $330,000 property tax break that Gov. J.B. Pritzker got on a Gold Coast mansion — a break he got in part because the toilets were disconnected during a stalled remodeling job.

Records obtained by the Chicago Sun-Times show the U.S. attorney’s office in Chicago has asked Cook County Assessor Fritz Kaegi for all emails and any other communications dating to 2012 regarding the tax break that Kaegi’s predecessor, Joseph Berrios, gave Pritzker.

As they continue an investigation prompted by a Sun-Times report in May 2017, they have asked for information including the name of every employee who, under Berrios, “worked, reviewed and/or approved” the tax break for one of the two mansions Pritzker owns on North Astor Street. Pritzker reimbursed Cook County the full value of the tax break in 2018.

Rather than obtain those names through subpoenas, prosecutors sent Kaegi’s staff a series of emails beginning Jan. 17 that cited a wide range of specific records, which he has agreed to turn over, records show.

The seven emails to the assessor’s office for records since then also show that, besides the investigation of Pritzker’s tax breaks, prosecutors have sought records of other property tax appeals to Berrios between 2010 and 2018 made on 118 properties. Those include the United Center, Gibsons steakhouse on Rush Street, a Bob Rohrman auto dealership in Schaumburg and several homes, including the Rev. Jesse L. Jackson’s residence.

Gov J.B. Pritzker on Friday: “As I’ve always said, any review will show that all the rules were followed.”
Gov J.B. Pritzker on Friday: “As I’ve always said, any review will show that all the rules were followed.”
State of Illinois

A spokesman for the federal prosecutor’s office wouldn’t talk about the records requests.

Many of the properties — but not all — got tax breaks during the eight-year tenure of Berrios, whom the Sun-Times reported in December is under federal investigation. In most of those cases, the owners hired politically connected law firms to make their case that the assessor was overvaluing their properties, and Berrios agreed.

A lower property assessment results in a lower tax bill.

The successful bids to get Berrios to cut his office’s estimation of how much those properties were worth brought those landowners savings that ranged from a few hundred dollars to nearly $2 million in property taxes for one year, according to a Sun-Times analysis.

Among the clout-heavy law firms involved in those appeals were Chicago firms headed by Illinois House Speaker Michael J. Madigan, D-Chicago, Ald. Edward M. Burke (14th) and Steve Pearlman, a close friend of former Mayor Richard M. Daley.

Six of the property owners hired Schmidt Salzman & Moran, the same firm that convinced Berrios to slash the assessment on Pritzker’s mansion by arguing that it was uninhabitable — in part because the toilets had been disconnected.

The governor and his family live in a 12,500-square-foot mansion in the 1400 block of North Astor Street that a Pritzker company called Astor Street LLC bought for $14.6 million 14 years ago.

An email from prosecutors that Kaegi received on May 17 asked for records of all appeals Schmidt Salzman & Moran filed with Berrios “for high-value residential properties based on vacancy and uninhabitability” between 2014 and 2016. Kaegi’s staff responded with a list of more than 40 homes in Chicago and the suburbs, all worth substantially less than either of Pritzker’s side-by-side mansions.

The same email also asked Kaegi for any other tax appeals since 2016 that Schmidt Salzman “filed on behalf of entities affiliated with the Pritzkers, including Hyatt, Astor Street, and Pritzker Group.” Kaegi’s staff said it didn’t find the firm had handled any other cases for the Pritzkers other than the governor’s mansions.

Schmidt Salzman didn’t return messages regarding Prtizker’s tax break or prosecutors requests for property tax records involving other clients.

“As I’ve always said, any review will show that all the rules were followed,” Pritzker said Friday, “but I’ve not been contacted by federal authorities, nor has my wife.”

His tax break involved the 6,387-square-foot mansion next door to his residence, which Pritzker’s company bought for $3.7 million in 2007. The governor started to do renovations, during which time it remained vacant.

J.B. Pritzker’s $3.7 million mansion next door on North Astor Street on which he got $330,000 in tax breaks after asserting that it was “uninhabitaable.” As proof, his lawyers submitted photos showing the toilets that were disconnected during a stalled remodeling.
J.B. Pritzker’s $3.7 million mansion next door to his residence on North Astor Street.
Rich Hein/Sun-Times file

Berrios put the vacant home’s value at $6.3 million in 2016.

That valuation was appealed by Astor Street manager Thomas Muenster, who’s the brother of Pritzker’s wife, and the Schmidt Salzman firm. They argued that the home was uninhabitable and offered photographs showing disconnected toilets to prove that.

Berrios agreed, slashing his original $6.3 million assessment to under $1.1 million. The lower assessment saved Pritzker more than $330,000 on the property taxes he paid on the home between 2012 and 2016.

The Sun-Times revealed Pritzker’s big tax break as the billionaire venture capitalist was seeking the Democratic nomination to challenge then-Gov. Bruce Rauner.

That prompted an investigation by Cook County Inspector General Patrick Blanchard, who concluded that the removal of the toilets was part of a “scheme to defraud” taxpayers, according to a report he released weeks before the November 2018 election.

Three days after Blanchard’s report came out, Pritzker’s company sent Cook County Treasurer Maria Pappas five checks totaling $331,432 — the value of the tax breaks he got from Berrios. He went on to unseat Rauner.

Berrios resigned as chairman of the Cook County Democratic Party after losing the Democratic primary to Kaegi.

Berrios has been under federal investigation, the Sun-Times reported last December based on a subpoena prosecutors issued on Dec. 5.

About six weeks later, federal prosecutors began sending Kaegi emails seeking records.

Berrios says he wasn’t aware federal investigators had been looking at specific appeals while he was in office filed by law firms that had contributed to his campaign funds. “It’s news to me,” he says.

The properties that prosecutors sought records about include:

• 1 N. La Salle St., a Loop skyscraper owned by ONL Properties. Burke’s law firm filed eight appeals between 2010 and 2017. During that time, Berrios moved to drastically increase his estimation of the property’s value but backed down. That resulted in Burke getting more than $1.9 million in property savings for the owners. On top of that, he got them a tax refund of $101,951 last year when a Cook County judge agreed to lower the 2015 assessment, when the tax bill totaled $2,098,342.

Burke, who didn’t return calls seeking comment, has been indicted and is awaiting trial on federal charges that accuse him of using his aldermanic power to withhold construction permits for a Burger King restaurant in his ward in a failed effort to get the restaurant to hire his firm to handle its property tax appeals.

Attorney Thomas D. Flanagan of the Flanagan/Bilton law firm took over the appeals in 2018, when Berrios initially raised the assessment by 60%. Berrios later slashed the increase to less than 2%. The owners ended up paying more than $2.9 million in property taxes last year — which was $1.5 million less than they would have under Berrios’ initial valuation.

• The United Center, home to the Bulls and Blackhawks, filed seven appeals while Berrios was assessor. All were filed by two lawyers who were close friends of Daley — first Terry Newman and now Pearlman.

During Berrios’ final year in office, he initially moved to increase the assessment of the arena and the surrounding property the United Center owns by 30%. That would have seen the United Center’s total property tax bill rise from $6.9 million to nearly $8.9 million.

Pearlman appealed. And Berrios agreed to raise his valuation of the property to less than 9%. That meant the United Center avoided a tax increase. Instead, its tax bills remained at $6.9 million.

Attorney Steven Pearlman, seen here arriving at the wedding of former Mayor Richard M. Daley’s son Patrick Daley last September.
Attorney Steven Pearlman
Colin Boyle/Sun-Times file photo

Pearlman responded to interview requests with a written statement from a public relations firm saying his law firm “has always been and will continue to be responsive to any government agency making inquiry about the firm and client matters. We cannot comment on specifics regarding any pending federal investigation.”

Rocky Wirtz, an investor in the Sun-Times, co-owns the United Center with Jerry Reinsdorf.

• 730 Franklin Building, a commercial building at 300 W. Superior St., filed five appeals to Berrios’ office, at first using Madigan’s law firm and then switching to Flanagan last year.

Twice, Madigan’s firm got Berrios to reduce his initial assessment increases, saving the building’s owners more than $153,317 in real estate taxes.

Flanagan saved them $248,819 in taxes when Berrios scrapped his initial plan to increase the assessment by more than 50% in 2018, instead raising it by just 4%. The building ended up with a tax bill last year of $416,343 — its lowest in three years.

Flanagan didn’t return messages.

Asked about federal prosecutors’ interest in the tax appeals on the property, Madigan’s law partner Vince Getzendanner said: “We’ve never been contacted. This is our first knowledge of any file being requested. I’m not worried about it.”

• Bob Rohrman Kia, 1100 E. Golf Rd., Schaumburg. The car dealer filed seven appeals under Berrios, who initially planned to increase the assessment on one part of that property by 50% in 2018 and raise the assessment on an adjoining lot by nearly sixfold.

Attorney Thomas Battista filed an appeal, and Berrios sharply reduced his initial assessment increases. That saved Rohrman’s dealership more than $209,000 in property taxes last year, when the business paid $382,622.

“I wouldn’t be able to comment on that,” Battista says. “Nobody’s contacted me.”

In January, the Cook County treasurer’s office sent Rohrman three property tax refund checks totaling $70,085 after another law firm, Amari & Locallo, won three lawsuits to further reduce the dealership’s assessments for 2012, 2013 and 2015.

• Gibson’s, 1028 N. Rush St., a steakhouse popular with Chicago’s movers and shakers, has long been represented by property tax attorney Michael Crane, whose nephew Christopher Crowley was Berrios’ chief of staff in the assessor’s office.

Crane lost five of the six appeals he filed with Berrios, who agreed to a slight reduction in his assessed value for the restaurant in 2015, shaving $3,693 off the tax bill, which ended up being $88,416.

Crane also got the restaurant refunds totaling $52,244 by going to court and getting judges to agree the assessments for 2011 and 2015 were too high.

The property is owned by a Florida company whose lawyer says the restaurant is responsible for challenging the property assessments and paying the real estate taxes, which totaled $119,003 last year — its lowest in three years. Gibson’s chairman Steven Lombardo III and Crane didn’t return calls.

• Erie Cafe, 530 E. Erie St., a steakhouse where Berrios is among the clout-heavy regulars. It was also the site of his retirement party before he left office in December 2018.

During the time Berrios was assessor, Burke’s law firm lost two of the three appeals filed to contest Berrios’ assessments for the restaurant, whose tax bill has steadily risen, from $87,042 in 2015 to $176,469 last year.

But Burke did get the restaurant a total of $46,456 in refunds for the restaurant by filing six successful appeals with the Illinois Property Tax Appeal Board since 2012.

Ronald Lenzi, whose family owns the restaurant, says he never discussed his property taxes with Berrios.

“To say that because Joe Berrios is a customer and has been coming here for a while, that we got any preferential treatment would be flat out wrong,” Lenzi says.

• A small apartment building in the 2600 block of West Fullerton Avenue that was sold a year ago by Ald. Felix Cardona Jr. (31st), who worked for Berrios in the assessor’s office, and Cardona’s father.

Ald. Felix Cardona Jr. (31st).
Ald. Felix Cardona Jr. (31st).
Ashlee Rezin Garcia / Sun-Times

A few months before the Cardonas sold the property in June 2019, Berrios initially decided on a 45% increase in the assessed value. The Cardonas appealed, and Berrios decided to increase the value by 36%. That gave the Cardonas a $620 break on their taxes, which totaled $4,292 in 2018.

Cardona was Berrios’ director of special assessments in the assessor’s office before running for alderman in 2019. He also was the campaign treasurer for Berrios’ daughter, former state Rep. Maria “Toni” Berrios.

A few months before Cardona was elected alderman, the county treasurer issued four checks totaling $4,967 in property tax refunds to “Felix Cardona” after Berrios agreed that the property owner was entitled to senior citizen homestead exemptions between 2014 and 2017.

The alderman says he doesn’t know why federal prosecutors want to review the assessment reduction Berrios gave them.

“It was my father’s property,” the alderman says. “I had co-ownership in the property. My dad handled everything.”

• Sixteen properties, including condos, in Bridgeview and Justice owned by Sebastian Jachymiak — the owner of Technicraft Collision Repair Experts, a body shop in Justice that provides towing services for several suburbs — and his business partners. Jachymiak has been named in search warrants federal agents served on McCook, Lyons and former state Sen. Martin Sandoval, D-Chicago.

Jachymiak and his business partner Kinga Bartoszek hired former Chicago Ald. Ambrosio Medrano in 2012, seeking to lower their property taxes by appealing the assessments Berrios had placed on seven properties. Berrios rejected all of Medrano’s appeals.

In May, Medrano, who has been convicted in three corruption cases, got an early release from his 13-year federal prison sentence, after serving five years, because of the risk posed by the coronavirus pandemic.

Jachymiak, Bartoszek and Medrano couldn’t be reached for comment.

• A two-story home in the 6800 block of South Constance Avenue owned by the Rev. Jesse L. Jackson and his wife Jacqueline.

During the time Berrios was assessor, the Jacksons never filed an appeal to contest the value of their home in Jackson Park Highlands.

In 2018, Berrios lowered the home’s assessed value by about 8.6% when he reassessed the entire city of Chicago. That saved the Jacksons about $1,055 in property taxes.

The county treasurer issued Jackson four checks totaling $1,181 last year because he and his wife had failed to apply between 2014 and 2017 for senior homestead exemptions, small property tax breaks allowed under state law.

But Jacqueline Jackson says she’s perplexed by the interest from federal prosecutors in their home: “What would they like to know?”

Contributing: Mitchell Armentrout

Read the May 14, 2017, Sun-Times report that sparked the investigation.
Read the May 14, 2017, Sun-Times report that first raised questions about the property tax break at Gov. J.B. Pritzker’s mansion.