Ed Burke’s ‘tuna’: Indicted pol saved Old Post Office developer more than $12 million
The feds say a 601W Companies affiliate was going to hire him for property tax appeals for another building. Burke’s firm did the work. 601W reaped the savings — but decided not to hire Burke after his offices were raided.
For two years, Ald. Edward M. Burke kept pushing to “land the tuna.”
According to a secretly made recording, that’s how the since-indicted Chicago City Council member referred to his long quest to get 601W Companies to hire his law firm.
The New York City company redeveloped Chicago’s long-abandoned main post office downtown, turning it into office space.
And Burke wanted desperately to be hired to handle property tax appeals on the development that 601W calls the Old Post Office, court records show.
601W already had another law firm for that, though, and wouldn’t budge.
But Burke kept pushing, according to the records.
Finally, his law firm, Klafter & Burke, got hired to handle the property tax appeals for a skyscraper 601W was buying — not for the Old Post Office, according to the federal racketeering indictment later filed against Burke.
He’s fighting those charges, which accuse him of trying to keep businesses he was soliciting for tax work from getting the approvals they needed from City Hall for their projects unless they hired his law firm.
The indictment doesn’t say which 601W property Burke ended up successfully appealing the property taxes for.
But, according to sources and public records, the Chicago Sun-Times has identified the building for which Burke’s firm got hired as the 40-story skyscraper at 1 S. Wacker Dr., which the developer had agreed to buy for $310 million.
In October 2018, Burke appealed the building’s property assessment to then-Cook County Assessor Joseph Berrios. And Berrios agreed to slash his estimation of the building’s value by 25%.
That resulted in 601W saving more than $12 million in property taxes on 1 S. Wacker Dr. — at least $4 million a year for three years.
Three weeks after Berrios approved the tax break for 1 S. Wacker Dr., federal agents raided Burke’s City Hall and ward offices, seizing records that included files on the Old Post Office.
Randall Samborn, a spokesman for 601W, says neither the developer nor its management firm hired or paid Burke’s law firm.
According to the indictment, Burke was hired by an unidentified affiliate of 601W for the tax work on 1 S. Wacker Dr.
Burke’s firm expected to be paid at least $15,000 a year for each of those three years for appealing the property taxes, according to court records. Whether it ended up getting paid isn’t clear.
His lawyers won’t talk. They didn’t respond to messages.
According to a written statement sent by Samborn, “601W Companies never paid any money or legal fees to Klafter & Burke, and no affiliate or representative ever paid any fees to the law firm on 601W’s behalf.
“Whatever Klafter & Burke did in filing the appeal with the assessor’s office was without any authority from 601W or an agent acting on its behalf.”
Samborn acknowledges that 601W saved $12.7 million on its property taxes over the past three years as a result of Burke’s work on its building.
Burke’s law firm was working with Jones Lang LaSalle — the real estate affiliate that wasn’t identified by name in the indictment.
Jones Lang LaSalle manages all of 601W’s Chicago properties, including the Old Post Office. It also managed 1 S. Wacker Dr. for its previous owner, John Hancock Insurance Services — which sold the Wacker Drive tower to 601W.
After federal agents raided Burke’s offices in November 2018, sources say Bryan Oyster, a Jones Lang LaSalle vice president, notified Klafter & Burke that 601W wasn’t going to hire the firm to handle the property tax appeals for 1 S. Wacker Dr. That was a few weeks after Klafter & Burke already had gotten Berrios to slash the assessment by 25% — ultimately saving 601W $12 million.
Burke’s efforts to land 601W as a client for his law firm were discussed during an Aug. 26, 2016, meeting he had with then-Ald. Danny Solis (25th), who secretly recorded the conversation while working undercover on behalf of the FBI after getting caught up in an investigation of his own dealings, according to court records. Solis hasn’t been charged with any crime.
At the time, Solis was the chairman of the Chicago City Council zoning committee, and the post office redevelopment project was in his ward.
Burke solicited 601W company representatives during a meeting in Solis’ City Hall office on Oct. 27, 2016, court records show.
Over the months that followed, Solis secretly recorded Burke threatening to withhold city financing as well as tax breaks for the post office project, according to court records.
“So did we land the, uh, tuna?” Burke asked Solis during a meeting on May 26, 2017.
On Oct. 25, 2017, Burke, who was then the chairman of the Chicago City Council’s powerful finance committee, told Solis he wouldn’t take any official action on the post office tax breaks because, in his words, “The cash register has not rung yet.”
Besides being pressured to hire Burke’s law firm, 601W was being pressed to hire the law firm of then-Illinois House Speaker Michael J. Madigan, which also handles property tax appeals for major Chicago property owners. Madigan has since been indicted in a separate criminal case that also involves efforts to get legal work from the developer.
On Aug. 24, 2018, Burke sent a contingency agreement to Oyster.
“The agreement provided, among other things, that an affiliate of [601W] would retain Klafter & Burke to perform real estate tax work with respect to a specific commercial property and would pay Klafter & Burke a fee for its work, based in part on any tax reduction obtained,” according to Burke’s indictment. “Klafter & Burke’s fee was to be no less than $15,000 for 2018, $15,000 for 2019, and $15,000 for 2020.”
601W signed a contract with Hancock in September 2018, agreeing to buy the 1.1 million-square-foot, Helmut Jahn-designed skyscraper for $310 million in a deal that wouldn’t close until that December, according to records filed with Cook County.
In a Sept. 20, 2018, Chicago City Council vote, Burke voted to give 601W $18 million in tax-increment financing for the post office redevelopment.
“Burke did not publicly disclose his repeated efforts to obtain work for his private firm, Klafter & Burke, nor did Burke disclose that his firm had entered into a contingent fee agreement with [601W]’s affiliate several weeks prior to this vote,” according to the indictment.
On Oct. 11, 2018, Burke filed an appeal with Berrios, asking him to lower his estimation of the value of the skyscraper, then still owned by Hancock and managed by Oyster’s company. Burke included an appraisal that estimated the skyscraper was worth $232 million.
On Nov. 4, 2018, Berrios — in his final month as Cook County assessor after losing the Democratic primary that year to Fritz Kaegei — agreed to lower his valuation of the skyscraper from $320 million to $239.6 million — which resulted in 601W paying $4 million less in property taxes in 2019 than it otherwise would have had to pay. They also saved $4.1 million on the taxes paid in 2020 and $4.6 million on the taxes paid in 2021.
On Nov. 29, 2018, FBI agents raided Burke’s City Hall office and his 14th ward headquarters.
After the raid, Burke’s law firm was dropped by some of its clients.
And that was when Oyster informed Burke’s firm that it wasn’t going to be hired to do any work for 601W. The developer then hired the law firm Worsek & Vihon to file an appeal asking the Cook County Board of Review to further reduce the property assessment on 1 S. Wacker Dr. The board said no.
On Jan. 2, 2019, Burke was charged with attempted extortion, accused of threatening to hold up city permits for a Burger King restaurant in his Southwest Side ward that hired another law firm to appeal its property taxes.
Five months later, a federal grand jury indicted Burke on broader racketeering charges that included his actions regarding Burger King and the Old Post Office.
He is awaiting trial.