It’s Shakedown Time At City Hall


It was political philosopher George Santayana who famously said: “Those who cannot remember the past are condemned to repeat it.”

This post is for the benefit of the current members of the Park Ridge City Council and City Staff who either never knew, cannot remember, or just don’t care about the City’s relatively recent past as they address one of the more important items on tonight’s (May 28) Council agenda: Taxpayer subsidies to the developers of a proposed “boutique” hotel on the current Mr. K’s property down on Higgins.

We don’t object to a hotel – “boutique” or otherwise – in Park Ridge or on that property. What we do object to are money-grubbing developers and money-grubbing property owners who seem confident they can shake down our City officials into handing out what amount to bribes as incentives to certain development projects in our community.

Shake them down how?

According to the Agenda Cover Memorandum of C.P. & D. Director Jim Brown, how about with seven years of hotel tax rebates after the City more than doubles its hotel tax?

How about by waiving building permit fees that could run as high as $200,000?

How about by paying for architectural/design fees up to $250,000?

How about by rebating the City’s incremental property tax increases on the property for a period of seven years?

All of those shakedowns are intended to take money out of Park Ridge taxpayers’ pockets and put it in the pockets of developer Scarlett Hotel Group (“SHG”) and the owners of Mr. K’s – based, of course, on various projections and calculations (even the worst of which will be rosy) intended to convince folks that the requested bribes will still be a great deal for the City.

If you think you may have seen this movie before, you have.

You saw it back in 2003-05, when interim-mayor Mike Marous and then-city manager Tim Schuenke sold a bovine city council on the idea of subsidizing the private redevelopment of Uptown by borrowing many millions of dollars (secured by the City’s issuance of general obligation bonds). Not surprisingly, all the rosy projections of a $23 million return on that “investment” proved bogus, and when those bonds are finally paid off the City will likely end up booking a several million dollar loss.

Now contrast that with the situation seven years ago, when developer Lance Chody thought he could sucker Mayor Dave Schmidt and the then-council into believing that Whole Foods would only come to Chody’s stagnant property on Touhy and Washington in return for approximately $2 million of sales tax revenue sharing. A number of residents, including many members of the local business community, foolishly bought Chody’s pitch and demanded the mayor and the council comply.

Schmidt’s and those aldermen responded like the taxpayers’ champions: If WF needs a bribe to come to Park Ridge, it must not really want to be here.

Two weeks later, Chody and Whole Foods came back before the Council and said they would do the deal without the revenue-sharing windfall.

Just saying “no” to these kinds of shakedowns should be the automatic default mechanism any time such demands are made. Unfortunately, none of the current aldermen were part of that 2012 council that hung tough against Chody and Whole Foods, so there’s no way to predict whether any of the current seven have the spine to stand up to whatever pressure might be applied, or emoluments offered.

Not surprisingly, Brown’s memo has a few baseless conclusions that appear designed to encourage the City’s cutting a deal with the developer and property owners, such as: “In particular restaurants would benefit from the influx of hotel patrons.”

That might be a reasonable conclusion if the proposed hotel were in Uptown. But down near the City’s southwestern boundary, hotel patrons are more likely to be lured away to Rivers Casino and its restaurants, or to that garish garden of earthly delights called Rosemont.

Brown’s memo also doesn’t attempt to quantify the cost to the City of those seven years of rebates not only for the increased hotel tax but also for the City’s incremental increases in its property tax revenue. And although the memo references certain April-May correspondence between SHG and City Manager Joe Gilmore, none of that correspondence is included with Brown’s memo.

So much for transparency and accountability by Gilmore and Brown.

At the end of the day, however, this isn’t about speculative restaurant revenue and all the other happy horsebleep that anybody conjure up out of whole cloth to market this idea to the feeble-minded. It’s about the bottom line public policy questions:

1. Is Park Ridge so desperate it should allow itself to become an easy mark for these shakedowns?

2. If the hotel developer really wants to be in Park Ridge, why does it need a bribe?

Let’s see if either of those gets answered tonight.

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