Daley sought deal that went to developers who hired his nephew

Three years after leaving City Hall, former Mayor Richard M. Daley has gone after a government contract in Chicago, apparently for the first time, records obtained by the Chicago Sun-Times show.

But Daley’s Tur Partners — the company he formed with his son Patrick Daley when he left office in 2011 — was part of a group that suddenly dropped out of consideration for the deal to develop 9.5 acres of government land in the West Side medical center district on May 13, in the middle of the process to choose a developer.

That left just two bidders, each with ties to the former mayor, vying to develop the property for the Illinois Medical District Commission.

The winning bidder, IMD Gateway Partners, has hired Daley’s nephew Patrick Daley Thompson — a lawyer and Metropolitan Water Reclamation District commissioner who recently announced he’s running for the Chicago City Council — to handle the project’s zoning issues with City Hall, according to a spokesman for developer Jack Higgins.

IMD Gateway Partners is headed by Elzie Higginbottom, a businessman who was among Daley’s key campaign fund-raisers, and Higgins, who has deep connections to the Daley family. His daughter was with Daley nephew Richard J. “R.J.” Vanecko the night he threw the punch that killed David Koschman.

Higgins originally had been tabbed for the project last year by the Medical District Commission, a government agency whose board members are appointees of Gov. Pat Quinn, Mayor Rahm Emanuel and Cook County Board President Toni Preckwinkle, all Chicago Democrats.

But last fall the commission dumped Higgins — only temporarily, as it turned out — when the Chicago Sun-Times reported he owed $2.9 million in delinquent personal income taxes and interest to the Internal Revenue Service.

The deal to build housing, offices, stores and a hotel is worth as much as $300 million.

On July 22, the medical district’s commissioners awarded the deal to the Higginbottom-Higgins group, saying it could develop the property faster than losing bidder Cullinan Properties Ltd.

Cullinan’s team included developer Patrick Daly, a former Daley campaign contributor who formerly served as vice chairman of Navy Pier Inc., the not-for-profit group created to run Navy Pier and run by a host of people with close ties to the former mayor, including his daughter, his former campaign manager, two of his former chiefs of staff, his onetime top City Hall lawyer and civic leaders who were longtime supporters.

Daly serves on the medical district commission’s strategic planning committee, but a commission spokesman says that unpaid position didn’t disqualify him from submitting a bid to develop the district’s land.

The Higginbottom-Higgins group that landed the lucrative deal has faced a litany of lawsuits and financial problems over the past decade, according to records it provided to the commission that show:

◆ Higginbottom’s East Lake Management & Development Corp. has been sued more than six dozen times, primarily over its management of public housing projects for the Chicago Housing Authority, and also has faced dozens of other legal actions filed by employees. Higginbottom told the commission that amount of legal action is “typical” for a management and development company.

Higginbottom manages concessions at O’Hare and Midway airports under a contract with City Hall, and Cook County uses his company to manage the Cook County government office building at 69 W. Washington.

◆ Higgins, who owns Higgins Development Partners, has five IRS liens against his Gold Coast townhouse for failure to pay personal income taxes dating to 2005. He and his company have defaulted on four loans, and his landlord sued him in a rent dispute last year.

◆ Isiah Thomas, the former Chicago high school and NBA basketball star with the Detroit Pistons, was president of the New York Knicks when he was sued for sexual harassment in 2006 by a former team official who also sued the team’s owners. She was awarded $11.6 million.

The Medical District Commission had been seeking someone for more than a year to develop the vacant site at 2020 W. Ogden just west of Cook County’s Stroger Hospital. After Higgins was forced to drop out over his tax issues, the commission sought new bids in March and received four proposals. The commission disqualified one bidder for failing to bid on the entire property, leaving the Higginbottom-Higgins team, Cullinan and Vermilion Development and Clayco Inc.

Vermilion’s team included Daley’s Tur Partners — whose role was to line up foreign investors — and VOA Architects, headed by Michael Toolis, the husband of Daley’s cousin Theresa Mintle. Toolis is also chairman of the company that runs Millennium Park’s Park Grill restaurant, which is fighting City Hall to keep a 30-year concession deal it got under Daley.

Tur CEO Lori Healey, a former City Hall chief of staff for Daley, says the company was “looking to be a finance partner.”

But two months after submitting its bid, Daley’s team bowed out in May when the bidders were required to give detailed financial statements about each team member.

“We just decided it was not the right opportunity for us,” says David Cocagne, Vermilion’s president.