Lawsuit seeks to nullify liquor license for Pilsen bar

The tavern license was improperly issued by the city to Giant Penny Whistle, according to a lawsuit filed Monday.

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The site that houses the Giant Penny Whistle, a tavern and music venue in Pilsen.

The site that houses the Giant Penny Whistle, a tavern and music venue in Pilsen.

Mark Brown/Sun-Times

A Pilsen community group, along with Ald. Byron Sigcho-Lopez, filed a lawsuit Monday seeking to nullify a tavern license they claim was wrongly issued by the city.

The Giant Penny Whistle should never have gotten a tavern license because there is a moratorium on tavern licenses along Blue Island Avenue from 16th to 19th Streets that’s in the city’s municipal code, according to the suit, which was filed by the Pilsen Neighbors Community Council and Sigcho-Lopez (25th).

The lawsuit points to a January report from the city inspector general’s office that states that the license was improperly issued by City Hall as part of a legal settlement with owners of The Giant Penny Whistle, 1854 S. Blue Island Ave.

No ordinance was ever passed to lift the tavern moratorium, which still remains in place, the suit states.

A spokeswoman for the city’s Law Department declined to comment on pending litigation.

Earlier this year, Mayor Lori Lightfoot’s administration rejected the inspector general’s stance and defended its handling of the matter.

Sun-Times columnist Mark Brown wrote about the issue following the release of the inspector general’s report.

He noted that the unusual dispute grew out of the mess left behind when former Ald. Danny Solis (25th) dropped out of public sight for the final four months of his term in 2019 after the Sun-Times revealed he had secretly recorded Ald. Edward M. Burke as part of the federal investigation that led to Burke’s indictment.

On Jan. 23, 2019 — the day the newspaper broke the story of Solis’ undercover work — Solis was expected to advance an ordinance through the Chicago City Council that would have lifted the city moratorium that bans the issuance of tavern licenses on Blue Island Avenue from 16th Street to 19th Street.

But the alderman didn’t show up that day. And no ordinance to lift the tavern moratorium was presented. Instead, an ordinance was approved that allowed for liquor stores by lifting a separate moratorium on packaged-goods sales along the same three-block stretch.

By the time the omission was discovered, Sigcho-Lopez had been elected to replace Solis, and he declined to support the tavern project. Sigcho-Lopez sided with community groups, some which had fought to establish the liquor moratoriums in 1995 to reduce crime and related problems in the neighborhood.

With Sigcho-Lopez blocking them, the owners of The Giant Penny Whistle took the city to court, saying they invested nearly $800,000 in the property based on Solis’ assurances he would lift the moratorium.

The Lightfoot administration — and then-Corporation Counsel Mark Flessner — agreed to settle the case in December 2020 and allow the tavern to open, saying the controversy was the “result of an administrative error.” It later told the IG’s office the error involved the failure of the City Council to lift the tavern moratorium, as Solis’ former staff say he had intended.

The inspector general found that the city mishandled the case by ignoring the moratorium, which remains a part of the municipal code.

“Lifting the tavern moratorium required city council to pass an ordinance to that effect,” the in-house City Hall watchdog agency wrote, its findings summarized in its quarterly report. “No such ordinance was introduced and passed. Therefore, the city lacked the authority to enter into the settlement agreement … and …issuance of the tavern license was legally impermissible.”

Sigcho-Lopez said Monday he’s confident the law will prevail and the Giant Penny Whistle will be forced to close.

“What happened sets a dangerous dangerous precedent. There was no due process, and as a result residents didn’t get their say,” Sigcho-Lopez said. “Families who live nearby have had to break their leases because they couldn’t live near such a big venue. It’s a big music venue. Businesses need to be in harmony with the residents.”

Contributing: Mark Brown

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