Letters: McPier land deal was entirely above board
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An Aug. 16 article by Chicago Sun-Times reporter Tim Novak, “McPier Hands A 400 Percent Profit To Insider’s Ex-Client,” distorts the facts surrounding a sound real estate transaction. Most glaringly, no public funds were expended by MPEA for the purchase in question.
CenterPoint Properties Trust, a property management company the Metropolitan Pier and Exposition Authority (MPEA) purchased land from, made the decision itself to contribute 100 percent of the funds – $5.5 million – to purchase a previously foreclosed property at 2039 S. Prairie Avenue to develop into a park for the benefit of the community.
This was no insider deal. This was actually a transaction that was reported by Crain’s and the Chicago Tribune and was approved by the MPEA board on May 23, 2014 as part of a larger real estate transaction for the development of the McCormick Place Entertainment District.
The article suggests that an appraisal for the Prairie Avenue lot should have been conducted. However, it was determined that an appraisal was not necessary due to the fact that the purchase price for the park land was $250.00 per sq. ft. as compared to MPEA appraisals for surrounding properties that were $271.00 per sq. ft. – 8 percent less. In addition, it was CenterPoint funds that were used to purchase this property.
What wasn’t emphasized in the article was that this was a foreclosed property whose initial price was artificially low. Within the time the property was purchased and sold the price of land in the South Loop increased significantly amidst a growing real estate market, also not noted by Mr. Novak. There are many examples of properties that sold for much more than they were purchased in the South Loop in a similar time frame.
The MPEA board reviewed and approved these real estate transactions to carry out our strategic plan to spur economic development in the area through the development of the Entertainment District while also providing important public benefits such as a community park. The Entertainment District and other tourism investments will create 7,400 construction jobs. Upon completion of the Entertainment District, MPEA projects an additional $250 million annually to be spent in the area supporting approximately 2,500 new jobs.
It is disappointing to see that the Sun-Times failed to report these facts.
Chairman of the Board
Metropolitan Pier and Exposition Authority
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