- Rich Hein / Sun-Times Media
- The former campus of Michael Reese Hospital, shown in 2009, the year the city bought the property. The bill—up to $91 million—is now coming due.
Yesterday was a banner day in the city’s effort to waste more property tax dollars on dreadful tax increment financing deals.
In this case, the city sent roughly $1.3 million—the first of many such payments, mind you—to one of the world’s largest privately held medical supply companies in exchange for the Michael Reese Hospital property.
A property that apparently nobody else wanted.
My guess is that Mayor Emanuel didn’t mention this in any of his daily press releases because there was just no way his media team, as nimble as it is, could possibly spin it into good news—though it would be fun to watch them try.
Instead, I learned about the payment in an article by Micah Maidenberg, a real estate reporter for Crain’s Chicago Business.
But for Micah, you may have forgotten that in 2009, we, the taxpayers of this fair city, agreed to buy Michael Reese—and its surrounding 41-acre campus—from Medline Industries for up to $91 million.
Actually, we didn’t agree to that, as nobody asked us.
Instead, Mayor Richard M. Daley agreed to it, using TIF dollars that he’d diverted from schools, parks, and pensions.
The mayor planned to use the land for the Olympic Village—part of his great Olympic dream that consumed so much of our time and energy during his last years in office.
At the time, Daley and his aides swore up and down that the transaction would not cost us, the taxpayers, a dime. Then they launched into one of those long and convoluted explanations officials resort to when they want to fool you into believing something that can’t possibly be true.
In this case: that we were going to get something for nothing.
I called it the Magic Beans financing scheme.
Actually, Kiki Yablon, then a Reader editor, came up with that headline. As far as I’m concerned, Kiki’s headline was the only good thing to come from this deal.
For Medline, it was an early Christmas. They’d bought the property for roughly $24 million in 2004, and now here was Mayor Daley with an offer enabling them to almost quadruple their investment just as the real estate market was collapsing.
I might as well mention that some of Medline’s principals have been generous contributors to Mayor Emanuel’s election campaigns. Another thing you won’t read about in a mayoral press release.
By the way, Michael Reese is a few blocks south and east of the site where Emanuel plans to spend another $55 million in your property tax dollars buying up land for a Marriott hotel and DePaul basketball arena.
You’d think that the mayor would just use the Michael Reese site—which the city already owned—for his South Loop real estate dream.
But instead he’s spending more property tax dollars to take more property off the tax rolls, meaning your property tax bill will go up to compensate for the taxes we aren’t collecting from of the South Loop site.
That’s something you might want to remember the next time you hear Mayor Rahm brag about holding the line on property taxes.
Altogether it will cost us about $120.7 million—in interest and principal—to buy Michael Reese from Medline, according to Crain’s. The payments will be spread out over ten years.
Look for Mayor Rahm to free up some of that cash by firing more janitors and cutting pension payments to retired cops, firefighters, and teachers because times are hard and mistakes were made and a tough mayor’s got to do what he’s got to do.
Or however his mayoral press agents spin it.
Here’s my suggestion: let’s take a page from the wacky world of Bruce Rauner, the gazillionaire wheeler-dealer who wants to be our governor.
His old investment company owned a portion of a nursing home business that got socked with a multimillion-dollar wrongful death judgment after several patients died under its care.
When the patients’ survivors tried to collect, they discovered that the nursing home company had been sold to a retired graphic artist named Barry Saacks, who says he didn’t know he’d bought it.
So let’s just sell Michael Reese to Saacks.
Hey, Medline—good luck getting any money out of him.