Emanuel dismantling Daley deals

Now that Mayor Rahm Emanuel has reworked the sweetheart deal that former Mayor Richard M. Daley gave Lollapalooza, his lawyers will be back in court Monday trying to undo another Daley deal that Emanuel says is shortchanging taxpayers.

Emanuel wants to undo the concession agreement that Daley gave the Park Grill restaurant in Millennium Park. The restaurant has paid less than Emanuel thinks it should – a total of $2.4 million – in rent since it opened in 2003. Park Grill gets garbage pickup and natural gas courtesy of taxpayers, too.

Emanuel’s leverage: Park Grill operators James Horan and Matthew A. O’Malley want to sell the remainder of the 20-year concession agreement to Levy Restaurants for $8.8 million – but they need permission from Emanuel’s Chicago Park District board.

Emanuel’s argument: O’Malley and Horan got permission from the park district – but not Daley and the City Council – to operate on a city easement in Millennium Park, which means the restaurant has no legal right to be there. “Those are the kinds of grants only the City Council can give, and they have to be in writing,” says Stephen R. Patton, the city’s top lawyer.

But the restaurant’s lawyers say Daley met in his office with Horan and O’Malley to discuss Park Grill plans. Daley also attended the restaurant’s grand opening in 2003 and later signed off on its liquor license.

Both sides are back Monday before Cook County Judge Moshe Jacobius, who’ll decide whether he wants to hear more evidence in the case, which he has called “a difficult conundrum.” Jacobius recently delivered a blow to the Park Grill, ruling that the city indeed has an easement on the park district land where the restaurant sits.

Park Grill’s attorneys say if Jacobius ultimately rules in favor of City Hall, the restaurant will sue the park district for granting a concession deal on land it didn’t control.

Under the deal with Daley’s park district, the restaurant doesn’t pay its base rent of $275,000 a year until its clout-heavy investors, including Daley’s friends and relatives, recoup their investment of $7 million to build and open the restaurant.

The park district has received $2.4 million from the Park Grill, less than 3 percent of the $83.4 million the restaurant grossed between its November 2003 opening and Dec. 31, 2011. Park Grill’s revenues have fallen the past three years, reaching their lowest point last year.

Emanuel sued Park Grill on Dec. 1, at the same time park district officials were renegotiating their contract with Lollapalooza, a deal that had been negotiated by Daley’s nephew Mark Vanecko. A new deal was announced Wednesday when the concert festival’s promoters agreed to increase their payments to the park district and start paying amusement and liquor taxes.

Tim Novak and Chris Fusco