The Finance Committee advanced Mayor Rahm Emanuel’s plan to refinance existing debt by issuing up to $1.1B in general obligation bonds. It also approved $3.65M in legal settlements against the Chicago Police Department, one intergovernmental agreement for a redevelopment plan and appointments to Special Service Areas. All of these items will go before the full Council on Wednesday.

Committee Members Present: Chairman Ed Burke (14), Vice Chair Patrick O’Connor (40), Pat Dowell (3), Leslie Hairston (5), Roderick Sawyer (6), Gregory Mitchell (7), Michelle Harris (8), Anthony Beale (9), George Cardenas (12), Marty Quinn (13), Toni Foulkes (16), Matt O’Shea (19), Willie Cochran (20), Rick Munoz (22), Michael Zalewski (23), John Arena (24), Danny Solis (25), Walter Burnett, Jr. (27), Jason Ervin (28), Ariel Reboyras (30), Scott Waguespack (32), Emma Mitts (37), Nick Sposato (38), Margaret Laurino (39), Tom Tunney (44), Harry Osterman (48), Joe Moore (49), Debra Silverstein (50)

Other Aldermen Present: Raymond Lopez (15), David Moore (17), Michael Scott, Jr. (24), Milly Santiago (31), Carlos Ramirez-Rosa (35)

Bond Ordinance To Restructure Debt
The committee overwhelmingly approved, with one dissenting vote from Ald. Scott Waguespack (32), an ordinance that greenlights an Emanuel Administration plan to restructure outstanding city debt with the issuance of an additional $1.1B in general obligations bonds that includes legal settlements and upcoming interest payments on existing debt. Although several committee members said they had a hard time understanding the language of the ordinance, and what was at stake if they failed to approve it (the most frequent comments aldermen made during the two hour debate), the ordinance received overwhelming approval.

The plan is a necessary first step the City needs to take to reduce its exposure to outstanding variable-rate interest payments, according to testimony from Carole L. Brown, the city’s new Chief Financial Officer. Brown reported that once the city executes the sale of the new bonds, the city will have moved to fixed-rate debt which will be paid down over 30 years.

The new debt helps phase out a financial tool known as “scoop and toss”, when borrowers refinance the principal and interest of long-term and extend the payments over a longer payment period. The practice, which is comparable to a homeowner continually refinancing their mortgage and extending the pay periods, is not a sustainable practice, but over the last ten years the city had relied on this method to pay for certain operating expenses when it presented its annual budget. Mayor Rahm Emanuel announced in April he is committed to phasing this process out by 2019, and this ordinance helps with that plan, according to Brown.

Brown also said the accelerated timeline for the bond sale, which was made public late Thursday when the Finance Committee agenda was posted online, is largely due to Moody’s recent ratings downgrade of the city’s bonds. When the city’s credit rating fell to junk status last month, it made the city vulnerable to $2.2B in payments from lenders holding lines of credit with the city.

According to Brown, the city has a line a line of credit with Morgan Stanley for $135M, plus an additional commitment for $200M that has not been allocated yet. The City also has a line of credit with Citigroup for O’Hare Airport totaling $140M and BMO Harris totaling $225M.

Brown says the city minimized its risk of potentially defaulting on those payments by making a deal, known as a forbearance agreement, with the banks. Under the agreement, the banks waived their right to terminate outstanding loan repayments if the city promised to retire its exposure to variable interest rates in a timely basis.

The City already took steps to get rid of half of the risk to the city’s corporate funds, Brown says. It eliminated about $918M in variable interest rate risk associated with general obligation bonds that date back to 2002 and terminated 21 swap agreements. Brown said this ordinance was crucial in eliminating the rest of that risk by paying for the following items:

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  $192M in general obligation swap termination costs. When the city was downgraded by Moody’s, the swaps had an automatic termination event. This means the swap counterparties could demand immediate payment and terminate the swap. The city was able to negotiate a discounted rate and terminate the swap. The city used commercial paper to pay off the termination cost. This ordinance pays the city back for that payment.

  
  


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  $150M for variable rate general obligation bonds converted to a fixed rate 

  
  


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  $40M in variable rate fees associated with Moody’s recent downgrade

  
  


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  $170M in a so-called “scoop and toss” bond levy issued in 2014, where debt was rolled into a interest-only loan. The levy was put in place during the 2014 budget process. The City had funded it with short-term commercial paper. This ordinance would pay down the commercial paper. There will still be $100M in outstanding commercial paper payments.

  
  


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  $35M towards a 2015 loan payment for the site of the former Michael Reese Hospital. This dates back to a deal Mayor Richard M. Daley made to buy the site so he could build an Olympic Village.

  
  


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  $19M for a lawsuit related to the parking meter deal. Ironically, Morgan Stanley, the firm the city chose to oversee the bond agreement, is a plaintiff in the lawsuit.

  
  


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  $62M for judgement against the city by Aqua Hotel. The city approved the hotel’s plan to build a public parking garage, which it wasn’t allowed to do under a separate agreement it made in 2006 to privatize downtown public parking garages. The agreement had a non-compete clause. Approving Aqua Hotel’s plan violated that clause.

  
  


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  $4M to terminate QTE equipment lease transaction

  
  


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  $180M to terminate a 2005 CTA Orange Line financing agreement

  
  


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  $75M in retroactive raises and pension payments for Chicago police officersthat date back to a 2014 contract negotiation the city made with the police union.

  
  


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  Two years of capitalized interest for the bonds. When Ald. Carlos Ramirez-Rosa (35) asked what would happen after the first two years, Brown said that when the city eventually sells the bonds, it will put in a debt service levy associated with the debt on the bonds for the life of the bond deal. That means after the first two years, both the principal and interest on the bonds will be paid with the property tax levy.

  
  


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  The cost to issue the bonds. Financial fees to underwriters.

  
  

Brown would not speculate on what she expects interest rates to be on the $1.1B in general obligation bonds, which she says the city hopes to sell later this summer. The city could end up issuing less debt, she says, depending on how much those rates could end up costing the city. Brown reiterated this point multiple times after several aldermen questioned whether it was appropriate for the city to incur additional debt at a time when the city already has too many bills to pay.

Brown said she was confident the city wouldn’t have any trouble finding buyers for the new debt, because the response to the city’s bond sale three weeks ago was “great” with six-times as many interested buyers as there were bonds. “We should see agressive rates on this transaction based on just the favorable feedback we are getting from investors and the rating agencies and the general direction of the city.”

Ald. Scott Waguespack (32), who voiced some of the committee’s most forceful criticism, quipped that the market would obviously be interested in junk bonds because it would mean a higher interest rate with a greater a greater return.

Ald. John Arena (45) demanded to know what plans the city had in place to bring in additional revenue. Arena said that other than, “fines here and fees here,” the city has yet to devise a revenue strategy other than threatening a property tax increase. He added that it was “irresponsible” for the city to issue new debt without a revenue plan. “Many here on the Council and many taxpayers finally want to see us actually paying our bills and [have] the administration telling us what it costs to run the city based on our past debt,” he said, accusing the city of once again pushing off long-term debt by issuing new debt.

Brown countered that not approving the plan would be more irresponsible because of the promises the city made to its lenders after the downgrade. She added the Emanuel Administration is committed to discussing new revenue proposals, but that would come later as part of a “larger discussion around not just this years budget, but budgets going forward.”

There was also some concern about the city’s lack of involvement with local, women and minority-owned financial firms. The deal is underwritten by Morgan Stanley, who employs William Daley, Mayor Emanuel’s successor as White House Chief of Staff, and the brother of former Mayor Richard M. Daley. Ald. Walter Burnett (27) and Ald. George Cardenas (12) spoke at length about their annoyance with the city for not doing enough to hire local, women, and minority-owned firms during bond sales. According to Brown, 50% of the financial fees associated with this bond deal will be paid to local firms and 30% will go towards minority and women-owned firms.

Legal Settlements
As the meeting approached the three-hour mark, the committee approved $3.65M in three financial settlements against Chicago police officers. Leslie Darling, with the city’s Law Department, provided a detailed brief of the first case and a short synopsis of the second and third settlements.

Mary Daniel as Special Administrator of the Estate of Joshua Madison, Sr., deceased, and Shaunda Rogers v. Estate of Chicago Police Officer Robert Campbell & The City of Chicago (13 C 1682).

According to Darling, Chicago Police Officer Robert Campbell and his partner fatally shot 21-year-old Joshua Madison, Senior Officer Campbell and his partner were responding to a report that drugs were being sold in a fast food parking lot. Mary Daniels sued the city for the wrongful death of Joshua Madison, Sr. on behalf of Madison’s two sons. Shaunda Rogers, who was in Madison’s car at the time of the incident, brought her own claims for assault, battery and intentional infliction of emotional distress. Darling recommended that the committee approve the settlement for the November 2, 2010 incident, because Officer Campbell, who was the city’s key witness to the event, died before the case made it to court. The plaintiffs had asked for $6M, but the Law Department brought the settlement down to $1M.

 

Dana Cross v. City of Chicago, Officers Macario Chavez, Mohammed Ali, and Matilde Ocampo, cited as 12 C 4263, Now known as Tunoka Jett v. City of Chicago, Officers Macario Chavez, Mohammed Ali, and Matilde Ocampo, cited as 12 C 4263.

Officers fired at 19-year-old Calvin Cross, Sr. 45 times during a foot chase. Officers believed Cross had a gun, according to Darling, but when the officers questioned Cross, he refused to comply and fled the scene, prompting the chase. A gun was later found at the spot of the first shooting, but since it wasn’t on Cross at the time of death, it would have been difficult for the city to prove it was Cross’ gun. The committee approved the Law Department's recommendation to settle the case out of court for $2M.

 

Jose Salgado v. Hiram Gutierrez & City of Chicago (10 L 10568)

According to Darling, 39-year-old Salgado was riding his bike to work down a designated bike lane when Officer Hiram Gutierrez opened the door of his parked squad car, hitting Salgado. The plaintiff sustained neck and shoulder injuries that required $250,000 in medical surgeries. The committee approved the Law Department’s recommendation to settle the case for $650,000.

 

Other Items Discussed
There was no discussion of Ald. Will Burns’ (4) resolution requesting the state deny Spike Lee’s film company, Forty Acres and A Mule Filmworks, an application for a Film Production Tax Credit for his new film Chiraq. Ald. Burns could not attend the meeting. Chairman Burke also defered an ordinance to amend the Municipal Code concerning the sale of wood products made with formaldehyde. The committee approved various appointments and reappointments to nine Special Service Areas.

The Committee also signed off on two of the four ordinances proposed by the Department of Planning and Development. One of the approved ordinances [O2015-4195] is a redevelopment agreement to pay for infrastructure improvements for Amundsen High School. The other ordinance [O2015-4235] would approve a new loan agreement of $1.7M for Newberry Park Preservation Associates, LP. The other two ordinances [O2015-3708, O2015-4207] to approve a Class 7(c) Tax Incentive Classification for 1056-1520 E. 87th Street and a new redevelopment plan for Maple Park Marketplace in the 34th Ward were held in committee.

Start Time: 10:12

Members Present: Chairman Joe Moore (49), Vice-Chair Pat Dowell (3), Leslie Hairston (5),  Raymond Lopez (15), David Moore (17), Michael Scott Jr. (24), Deb Mell (33), Walter Burnett Jr. (28), Ariel Reboyras (30), James Cappleman (46)

Department of Planning and Development Members who testified: Efrain Hernandez-Diaz, Sarah Wilson, Bryan Esenberg, Michele Rhymes, Tracy Sanchez, Cary Steinbuck

All 12 items on the Housing and Real Estate Committee’s agenda passed in a relatively short meeting Monday. The only hiccup in the meeting was Chairman Moore (49) repeatedly mistaking new committee member Ald. David Moore (17) with Ald. Gregory Mitchell (7), which he soon corrected after the aldermen seated around him whispered repeated corrections. More Moores, more problems.

Monday's action included a vote to re-up the Low Income Housing Trust Fund’s status as local administering agent for the Illinois Rental Housing Support Program (RHSP), meaning it distributes state rental housing support money in Chicago. Peter Strazzabosco, Deputy Commissioner for the Department of Planning and Development, says the agreement’s been renewed every four years since Illinois established the RHSP roughly a decade ago.

Tom McNulty, the president of the LIHTF since its founding 25 years ago, says the fund is “breathing again” after a court case over the constitutionality of certain fees collected for the RHSP held up funds for two years. McNulty says the Fund is ready to find new projects and expand services. Several aldermen took time to praise the Fund’s work, including Chairman Moore (49), Ald. James Cappleman (46), and Ald. Pat Dowell (3), though Ald. Dowell had some questions about the frequency and transparency of the Fund’s subcontracting bidding process. Ald. David Moore said he looks forward to working with the Fund’s board to find ways to keep 17th Ward residents from being displaced.

The committee also approved an amendment to a redevelopment agreement with Wings Metro LLC’s multi-use project in the Chicago Lawn neighborhood. The $8.2M project converts an old police station into a domestic violence shelter. The city already approved the negotiated sale of the land, but Monday’s ordinance clarified that the city is responsible for remediation of off-site contaminants found in a nearby alley left from an old gasoline tank.

The committee also approved the $36K sale of a city-owned vacant lot at 265 E. Garfield Park that would become a landscaped venue with a pavilion for performances. The space will be leased to University of Chicago for arts programming. Ald. Dowell told the committee she had some questions about the pavilion. The committee voted to approve the issue for council, but Moore offered Dowell an opportunity to include further information for the full report to Council. The city also approved sale of a parcel at 1245-1257 E. 72nd Pl. for $88K that Kimbark Studios is planning to use as a public sculpture garden, and the conveyance of a once-vacant corner lot at 4200 S. Vincennes Ave. to Neighbor Space, who is already using the area as a block garden.

Vice-Chair Dowell will present the committee’s report at Wednesday’s City Council meeting, as Ald. Moore will be out of town for a meeting.

The first order of business on today’s Finance Committee meeting is to rally support to deny Spike Lee’s production company’s application for a tax credit if Lee calls his controversial new film “Chiraq.” There’s also a communication from the city’s Chief Financial Officer recommending the Mayor’s plan to borrow $1.1 billion dollars to finish his debt restructuring plan, nine reappointments to Special Service Areas, and loan agreements totaling as much as $4.7 million dollars–one for a supportive living facility, the other for a rehabilitation of a residential building with 84 affordable rental units.

Today’s Committee on Housing and Real Estate meeting includes an ordinance to extend the city’s agreement with Low Income Housing Trust Fund for its implementation of the trust fund’s rental housing program. It gives grants to building owners and developers, who in turn reduce rents for low-income residents. The Trust Fund is the local administering agency (LAA) that distributes rental housing support funds–that designation expires June 30th, so does their agreement for city resources. According to its 2014 year-end report, the Trust Fund supported subsidies in more than 2,800 units of housing at an annual cost of $15.1 million. It’s the biggest city-funded rental assistance program in the country. Today’s agenda also includes a number of sales and negotiated sales in redevelopment project areas and the sale of two 9th Ward properties as part of the city’s Preserving Communities Together program.

Ald. Pat O’Connor (40) says the city may be in bad shape, but Springfield needs to get it’s act together. Speaking at a City Club breakfast Tuesday, the senior alderman and Mayor Rahm Emanuel’s unofficial floor leader talked more about Springfield’s inaction than solutions for the city to fix budget problem on its own.

"It's a little bit tricky when you have a mayor who is so driven, with so many ideas on how to make Chicago work, and so much of what's going on around him is totally outside of his control or ability to make it happen,” O’Connor said, noting how the solution to the pension crisis starts in at the statehouse, not in Chicago. “Someone should kind of tell them the election is over, they’re in office now, they’ve won. And they should get on with the business of trying to help us solve some problems.”

He drew the state legislature's open partisan fights in contrast with the City Council's mostly closed door process, who he says spends months in discussions ensuring the budget is ready to pass when it hits the floor. “That budget essentially passes the exact way it was introduced after weeks of hearings, with the exception of one percent, one half a percent. That’s where we fight.” But he says there are tough times ahead for city government, and the recent bond downgrade has only made things tougher. Whether those hard times included a property tax hike, O’Connor wouldn’t say. “This is a quasi-press event. The last thing we want to do is make news.”

He did however offer up one possible solution: Mayor Emanuel’s plan to defer the city’s pension payments and tie future revenue from a proposed Chicago casino to help pay the bill. But that too needs approval from Springfield. It passed in both the House and Senate, but has yet to make it to the governor’s desk–Senate President John Cullerton used a parliamentary move to keep it from advancing to the Governor, who has said it is just another example of the city “kicking the can” down the road. But Ald. O’Connor said it was actually more like, “eating half the loaf today, and finishing the loaf in the next couple of years.” But loafs and cans aside, the Civic Federation’s analysis of current casino gambling revenue raises serious doubts over whether a Chicago casino is the answer to the city’s debt problems.

O’Connor was quick to criticize Springfield for their inaction on teacher pensions. He echoed Mayor Emanuel’s frequent claim that Chicagoans pay more than their fair share. “We pay our portion, we pay 7% of the 9% that the teachers are supposed to pay in the pension pickup, and then we get to pay for the rest of the state’s teachers in our income tax.” He says he wants to combine pensions “so we’re all in the same boat.”

It was around this time last month that Gov. Bruce Rauner made a personal visit to the City Council to scold the aldermen for years of poor budgeting and said the state couldn’t afford to bail the city out. But O’Connor says most of those mistakes were made years ago, and he immediately ticked off a list of cost-cutting measures the city has made since Mayor Emanuel took over the reins from Richard M. Daley. O’Connor says the the city needs to focus on the future, but it’s key that Springfield play along, too.

It only took the Committee on Transportation and Public Way four minutes to pass 47 pages worth of routine ordinances, most of which were grants of public way for street signs and awnings. Chairman Anthony Beale (9) also deferred Ald. Brendan Reilly's (42) proposed ordinance granting a food truck parking privileges on 800-829 North Larrabee St. to the the Committee on Pedestrian and Traffic Safety, which meets on Thursday. The meeting was so fast that that Ald. Michele Smith (43) gasped when Ald. Beale moved to adjourn the meeting.

Start time: 11:00am

Members present: Chairman Anthony Beale (9), Ald. Pat Dowell (4), Ald. Matt O’Shea (19), Ald. Deb Mell (33), Ald. Michele Smith (43), Ald. Milly Santiago (31), Ald. Gilbert Villegas (36), Ald. Anthony Napolitano (41).

Since several members on the committee are new to City Council, Chairman George Cardenas (12) started Thursday’s meeting with an icebreaker, asking everyone to say their name and ward. Later in the meeting, an aide walked around the chambers and requested that everyone, including press and aldermen, write their name on a sign-in sheet.

Start time: 10:19

Committee members present: Chairman George Cardenas (12), Brian Hopkins (2), Gregory Mitchell (7), Toni Foulkes (16), Walter Burnett (27), Ariel Reboyras (30), Deb Mell (33), Carlos Rosa (35), Gilbert Villegas (36), Harry Osterman (48)

The Committee listened to a presentation regarding ComEd’s summer preparation plans and modernization efforts around Chicago, part of the company’s requirement to give an annual infrastructure update to the City Council. It has been doing so for the past 17 years, every year since the franchise agreement with the City of Chicago began.

According to David Reynolds, Commissioner of the Department of Fleet and Facility Management, 2014 was ComEd’s best performance year on record. The Department of Fleet and Facility Management oversees all franchise agreements with the city, and regularly inspects ComEd facilities. Reynold said the service improvement was largely due to years of infrastructure developments. The company spent $335M in capital investments in 2014 alone.

As for their summer preparedness, ComEd projects a 13% increase in energy usage this year compared to last summer. But it won’t be as high as 2011, which broke usage records.

Terry Donnelly, Chief Operating Officer for ComEd, also read a similar statement on the company’s investments.

But Ald. Cardenas quickly shifted the conversation to the franchise agreement’s expiration date: 2020. Cardenas told Reynolds and Donnelly that five years will pass quickly and he wants to ensure ComEd makes structural changes, including hiring a local, diverse workforce. He said he never sees a ComEd truck with a city sticker and demanded to know exactly how many Chicagoans are employed by the company. Donnelly said they have 169 Chicagoans on the payroll, excluding contractors.

Ald. Cardenas, Ald. Osterman, and Ald. Reboyras asked most of the questions during the hearing, although Ald. Brian Hopkins did ask how the provider addresses a spike in 311 calls when there is a power issue. Those calls are immediately diverted to ComEd, Reynolds said.

The Committee on Zoning meets today at 10:00 a.m. Among the proposed zoning changes on the agenda is an application [#18378] to construct a three story Whole Foods containing 79,5000 square feet of retail on the corner of Belmont, Ashland and Lincoln Avenues in the 44th Ward to replace an older Whole Foods just two blocks north on Ashland. Novak Construction purchased the former LaSalle Bank site and Ashland Belmont, LLC is the applicant on record for the project.  Under development for over seven years, this site had previously been slated at different times for apartments, a rumored Walmart and a Target.

The University of Chicago has requested a zoning change [#18336] to construct a new charter school, The University of Chicago Charter School-Woodlawn, on the property known as Residential Planned Development Number 723, land currently owned by the City of Chicago. The University had originally proposed expandingtheir Woodlawn campus, but eventually decided to build a new facility on the property which expands over several addresses, or about two acres of land between 63rd and 64th Streets and Greenwood Ave. According to the application, the school for middle-school and high-school students and will be three stories tall and about 70,000 square feet. It will also include “extensive green roof space, outdoor activity space, on-site parking, and community space”.

The Committee is also scheduled to discuss a zoning change to a property in River North near Merchandise Mart. The Chicago Transit Authority and Design Studio LLC own the plot on 201-223 W. Hubbard Street and 412-420 N. Wells Street–it’s currently a parking lot underneath the elevated CTA train. They’ve requested a zoning change to allow for construction of a new office building with commercial space on the ground floor.

There is also a request in the 39th Ward to rezone a one story high brick and concrete block building and adjacent lot on 6024-26 N Keystone Ave into manufacturing plant. The applicant, Peter Spyroboulos, intends to build on the existing structure.

A typical day for freshman 7th Ward Alderman Gregory Mitchell starts before sunrise. Between setting up his new ward office and getting acclimated to the City Council, Mitchell says he needs the time, because there is much to do.

“I’m like a perfectionist,” Mitchell joked. “So, I am always not satisfied with the ways things are going. I want to be up and running now.”

Mitchell, 44, a former financial analyst who ran a mostly self-funded campaign, pushed through a crowded field of candidates and defeated incumbent Natashia Holmes during the April runoff. Holmes was appointed by Mayor Rahm Emanuel in 2013 to fill the seat vacated by Sandi Jackson after she resigned from the council at the same time her husband, Cong. Jesse Jackson, Jr. was being investigated for tax fraud.

It’s a ward that has seen a lot of turnover. With Mitchell’s recent election, Holmes’ two years in office, and Sandi Jackson’s one-and-a-half terms in the Council, four different aldermen have represented the South Side Ward in the past 10 years. According to Mitchell, this turnover has led to a lack of constituent services. It was the biggest complaint he heard from voters during the campaign. Making it worse, Mitchell charges his predecessor didn’t use any of her allotted $1.3 million dollars of aldermanic menu money.

But as a lifelong resident of the 7th Ward, Mitchell remains unphased and excited for what’s to come.

“I have the canvas that I can work with,” Mitchell said. “I know what we have. I know what we don’t have. I know what we need. I know what we don’t need. So I am ready to set it and get the ball rolling.”

Asked if he plans to run for 7th Ward Committeeman next year, Mitchell responded without hesitation, “Absolutely!”

Citywide Priorities: Like most of his peers in the Council, Mitchell expects the city’s pension debt to be the biggest priority. “I don’t know if this is the elephant in the room. I think the elephant is out. Dealing with the pension. That is something that we are going to dive right into,” Mitchell said, adding that he’ll detail more action items once he settles into his assigned committees.

Local Priorities: “Set up the ward office and let the constituents know where I am located and to have the staff trained up to provide that above and beyond customer service,”  Mitchell said he wants to streamline the process and provide a direct line of communication from City Hall to the ward office. Mitchell says he has received a lot of support from the administration, City Clerk’s Office and neighboring Ald. Michelle Harris (8) and former Ald. John Pope (10).

Caucus Alignment: At this point in time, Mitchell is only committed to the Black Caucus. He says he wants to learn more about Council procedures and the issues other aldermen face in their wards before making other allegiances. “I want to see who best represents what I am going through and the things I need to do in the 7th Ward,” Mitchell said. “I am going to start my collaboration with those aldermen that share the same issues that I have and pick their brain.”

Ward Office: 2249 E. 95th Street

Chief of Staff: Former 18th Ward candidate Chuks Onyezia.

[Ed. Note: This is our first ZBA hearing report. We plan to cover future hearings and would like feedback from those who regularly attend ZBA hearings and who follow them closely. Please drop us a note if you have comments.]

It was a marathon day for the Zoning Board of Appeals, with board members spending a bulk of the first half of the day-long meeting grilling medical marijuana dispensary applicants. After working through a routine collection of special use applications for nail salons and barber shops, board members spent hours voicing concerns over security, ownership, and community involvement with the dispensaries. By the end of the day, nearly all the nail salons were approved but the future of three dispensaries was still up in the air until ZBA’s next meeting in August.

Start Time: 9:21 a.m.
Members Present: Jonathan Swain (chairman), Sam Toia, Sol Flores, Sheila O’Grady
Meeting Agenda – Map

Modern Cannabis, LLC – 1st Ward

The first and only successful marijuana dispensary applicant of the day was Modern Cannabis, LLC and their proposed dispensary relocation to 2847 W. Fullerton Ave; a hearing that took just over thirty minutes. Their initial application made headlines as a unique partnership between a pharmacist, Barry Golin and arcade/bar owners, Danny and Doug Marks. The Marks initially wanted to set up shop in the expanded game room of their bar at 1368 N. Milwaukee Ave. but argued Thursday before the board that their new Fullerton location is a better fit. Tom Murphy, attorney for Modern Cannabis, says the Milwaukee location, “gave us the opportunity for enhanced security.” Their initial and revised applications were both approved by the state.

There’s no public parking outside the new location, but Murphy says there will be valet service. ZBA Chairman Jonathan Swain expressed concern almost immediately about transporting patients to and from the building without a secure parking lot. Owner Daniel Marks says they’re applying for a valet loading zone, and they’ve located off-street parking spaces and a valet company for patients. They also plan to have appointments for handicapped, sick, and infirmed patients to meet at the train or their parking spaces.

The board approved the dispensary relocation on condition of Ald. Joe Moreno’s (1) approval of the valet loading zone, and also strongly encouraged the owners to consult with newly-elected Ald. Carlos Ramirez-Rosa (35), whose ward borders the new location.

DNA Info reported the applicants hoped to have their shop up and running by August. They say it was one of the first dispensaries to be granted a special use permit by the city in October.

Harborside Illinois Grown Medicine, Inc – 8th Ward

The owners of Harborside Illinois Grown Medicine, Inc. faced more difficulties in their hearing. Their proposed dispensary in Chatham, at 1111 East 87th St., faced over an hour of questioning from the Board. CEO Les Hollis, a former investment banker with Goldman Sachs, says their project is a joint venture between California-based Harborside, the biggest dispensary operation in the country, and Illinois Grown Medicine, which has a marijuana cultivation operation in Illinois. Hollis says they’ve already been awarded a state license, but the state has not approved the relocation.

Chairman Swain pressed Hollis and Craig Moore, who is handling Illinois Grown Medicine’s real estate matters, about their community outreach efforts and the new location. Hollis argues that the new location, which they describe as a wellness-medical campus, is better suited for their business. He says after the designation of the Pullman historic district, Ald. Anthony Beale (9) suggested they move further north. Hollis says Ald. Michelle Harris (8) supports the Chatham location.

Board members peppered owners and attorney James Vasselli (Del Galdo Law Group) with questions about charitable contributions, day-to-day operations, and ownership, but the consideration seemed to derail over the accuracy of economic disclosure statements.

“I need Illinois Grown Medicine LLC,” Chairman Swain said, “IGM LLC is not Illinois Grown Medicine LLC. That’s Business Organizations [from] law school first year. Those are two separate companies.” There seemed to be a mixup between IGM LLC, which is related to the dispensary business, and Illinois Grown Medicine LLC, which is related to a separate cultivation business.

Swain then said until the paperwork error was fixed, the Board would have to postpone deliberation. Ownership percentages were brought up later in testimony. “Let me get with my attorneys and make sure we get this right,” Hollis said.

Testimony continued for nearly an hour after the ownership mixup. The Board continued to push the group on security, hiring, and the cost of the product for patients. There was only one person who spoke against (you guessed it)–Mr. George Blakemore. ZBA will return to the issue at their June 19 meeting.

Before a lunch break, all applications regarding salons and barber shops from the morning’s proceedings then quickly passed, with the exception of Paradise Nail Corporation’s application, which Ald. Patrick Thompson (11) asked to be continued, and DBA Mercy’s Unisex Salon, which had objectors, but no expert to testify in favor.

When the Zoning Board of Appeals reconvened for their afternoon session, they postponed hearings on two proposed medical marijuana dispensaries in the 41st and 50th Wards.

420 Capital Management, LLC – 50th Ward

Thomas S. Moore, attorney for 420 Capital Management, LLC, requested a continuance for his client’s application to open a medical marijuana dispensary on 6501 N. Western Avenue, because he was recently hired to replace the applicant’s former attorney. The local alderman, Debra Silverstein (50), opposes the location for the dispensary because of its proximity to a neighborhood park. She sent out a ward-wide email reminding residents of the ZBA hearing and was present for the hearing in the Council Chambers.

Union Group of Illinois, LLC – 41st Ward

The Board approved Ald. Anthony Napolitano’s (41) request to postpone a hearing on a medical marijuana dispensary in the 41st Ward, despite concerns from the applicant’s attorney, who said a delayed hearing could jeopardize their application with the state. Union Group of Illinois, LLC applied for a special use permit to open a dispensary on 6428-30 N. Milwaukee Avenue shortly after the state approved their application on February 3, 2014. But Ald. Napolitano said he had little knowledge of the application.

“Just coming into the office on the 19th, I don’t feel that my ward has had enough time to review this or even understand it,” Napolitano testified. “It’s only been nine days since anything has been put in front of anyone in the ward.”

The attorney for the applicant, Joseph P. Gattuso with Taft Stettinius & Hollister LLP, said while he understood the alderman’s concerns, the company had been in talks with Napolitano’s predecessor. Gattuso added pushing the hearing to August “will kill us” because the applicant has until June 3rd to submit a zoning approval to the state.

A Fresh Start Sober Living Environments, Inc. – 1st Ward

The ZBA meeting concluded with one of the lengthiest debate of the day; nearly four hours was spent hearing testimony on a proposed expansion of a for-profit drug rehabilitation center on 530 N. Marshfield Ave. in the 1st Ward part of West Town.

The applicant, A Fresh Start Sober Living Environments, Inc., operates eleven group homes in Chicago for recovering alcoholics and drug addicts. The homes don’t accept insurance or offer on-site treatment, none of the staff are trained medical professionals, and the weekly cost of renting a room ranging from $175 to $300, according to testimony from the company’s president, Leonid Goldfarb.

Goldfarb sought approval to add an additional four beds to his West Town facility, which is a three bedroom, 2 ½ story, single family dwelling zoned to hold 8 occupants. He said the expansion was necessary to help their mission of “saving people’s lives” because recovering addicts who live in a communal setting are less likely to relapse. He was represented by former Zoning Committee Chairman William J.P. Banks and received support from Robin Belleau, the Executive Director of the Illinois Lawyer’s Assistant Program, which houses many of its law students, lawyers, and judges recovering from alcohol and drug addiction at Fresh Start sites.

But during the lengthy cross-examination and public comment portion of the meeting, a coalition of neighborhood residents, who had created their own legal defense fund, raised safety and legal concerns. They accused the applicant of running the facility like a hostel, underreporting the number of occupants living in the building, and lying about safety measures that had been put in place. The resident group submitted evidence alleging rampant drug use by tenants, police reports that had been filed against tenants over the year, and pictures of abandoned cars they believe were left by former tenants.

Ald. Joe Moreno (1) also spoke in opposition. He said while he is usually a proponent of these kinds of facilities, he can’t get behind the applicant because they didn’t proactively seek his support when they first opened their doors. “I didn’t meet these people until the City Law Department said they needed a special use permit,” Ald. Moreno said. “Then they went to court and that’s why we are here today. We are not saying anything about the mission, we are talking about the operation. They are not able to handle the clients and what they said they are doing.”

The Board voted a continuance on A Fresh Start for June 19 when they will hold their next meeting.

Arriving for a lunch date Friday afternoon in River North, Ben Winick looks rumpled. It’s a practiced look he’s become known for over the last ten years in Springfield that becomes both him and the policy positions he’s been steadily risen through. Most recently nominated as the director of the new City Council Office of Financial Analysis, Winick is expected to be formally appointed to the new position when the Office’s oversight committee meets for the first time some time in June.

His new job won’t be easy. Chicago is in a financial crisis, the City Council has a long history of rubberstamping mayoral budgets, and he’ll be expected to exhibit independence from the mayor while working for Budget Committee Chairman Carrie Austin, one of the mayor’s closest allies. But Winick has a positive attitude. “Chicago is a tremendous city. A very vibrant city with a vibrant diverse economy,” he says. “There are certainly challenges moving forward, but nothing that I would say is insurmountable, especially for a city as great as Chicago.”

Last Friday Aldertrack sat down for lunch with Winick to learn a bit more how he thinks he can bring financial independence to the Chicago City Council with five staffers and a $500,000 annual budget. He ordered bacon and scrambled eggs.

Originally from Galesburg, in Western Illinois, Ben Winick is the son of the late, highly regarded Knox County Democratic Chairman, Norm Winick, a man from whom many other county chairs took their lead. Ben got his start in Democratic politics, volunteering and working on local campaigns, then after finishing college at University of Wisconsin, he landed a policy job as a senior advisor to then Lt. Governor Pat Quinn in 2005. There, he was exposed to the machinery of state government and became a trusted advisor to Quinn.

Then, in January 2009, Winick moved with Quinn to take over the governor’s office after Gov. Rod Blagojevich was impeached. Quickly, Winick experienced a trial by fire in the governor’s legislative affairs operation, which meant budget issues. “Unlike most governors, there wasn’t a transition,”says Winick. “Blagojevich was arrested and next thing you know he’s gone. So it was a small group of us trying to get our arms around things trying to understand what the heck was going on.”

That year, for the 2010 budget, the state legislature decided to take a pass on enacting a budget, instead putting together a lump sum and declaring Gov. Quinn responsible for figuring out how much should go to what agencies. Winick, as a member of Quinn’s legislative affairs team, suddenly became a budget expert, holding implementation meetings with all the state agencies.

“I became more entrenched in the legislative process but [also] more involved in budget issues with the Governor, says Winick, “Until the Governor appointed Jerry Stermer as Director of OMB and then Jerry called and said, ‘I would like you to come over and work at OMB.’”

From there Winick worked his way up the ladder, eventually becoming Chief of Staff of the Office of Management and Budget, and in late 2014, after Pat Quinn appointed Stermer as Comptroller to succeed the late Judy Barr Topinka, Winick become Director of OMB.

But then something interesting happened. After Republican Bruce Rauner assumed the Governor’s office in January this year, he asked Winick to stick around for a while, an unusual move, considering how partisan the position tends to be.

Amanda Vinicky, statehouse reporter for Illinois Public Radio, says that shouldn’t be a surprise. Winick is, she says, “respected for being smart and wonky. For all of the top people [former Gov. Pat Quinn] trusted, Ben was known as the budget guy who knew his stuff and knew the in and outs.” Because he was asked to stick around for a few months after Rauner took over, it says something about how important he was to the process, Vinicky says.

Then, in late March, Winick left OMB and the Rauner administration, landing as Vice President for Policy at Innovation Illinois, a non-partisan advocacy group led by staunch Quinn supporters. A newly created group, Winick is working out of temporary space in the startup incubator 1871, in Merchandise Mart.

The Committee on Financial Analysis (COFA), led by Budget Committee Chairman Carrie Austin (34), is not expected to meet until later in June. Winick thinks he won’t start work until July, giving him a scant three months to hire a staff and set up an office before the mayoral budget is likely to come out in September.

There’s also likely to be some intense discussions on COFA, which besides Austin, includes Finance Committee Chairman Ed Burke (14), Ald. Rick Munoz (22), Ald. Pat Dowell (3), Ald. Ameya Pawar (47) and Machinists Local 126 Business Director Joseph Pijanowski. Carole Brown, a managing director at Barclays and former CTA Chairman, was originally slated for the committee but will not join since she was recently appointed Chicago’s Chief Financial Officer.

Besides an analysis of the mayoral budget, with some suggested options for Council to act on, Winick’s new office will have eight other priorities as part of the enacting legislation, including analysis of the city’s annual audit, analysis of ratings agency actions, and quarterly reports of financial impact statements from the city. Is it realistic that he can do all that in the first year?

“It will be a difficult task, but I think it can be done, says Winick slowly. “I think all of those things can get done in the first year.”

While the Office on Financial Analysis has a broad purview, it only has oversight over parts the City Council has direct budget authority. That means no oversight over the Public Schools, Transit Authority, Housing Authority or the Park District.

The enacting legislation for the new office also includes a key phrase, “All aldermanic briefings related to COFA reports shall be coordinated through the Chairman of the Committee on Budget,” effectively giving Chairman Austin total control over any work produced by Winick. An important part of how his office will operate.

What follows is a condensed and edited version of Friday’s interview.

Aldertrack: What happens to reports? Have you talked with Ald. Carrie Austin about it?

Winick: Not really. Not at this point. I would be working close with the Budget Committee and looking for the most appropriate way to go, depending on their vote.

Do you have a vision that your work would be available to the public?

It would be my expectation that I would be working collaboratively with Budget Committee Chairman Austin. Things will be made public as appropriate.

Usually the mayor introduces a budget, there’s two weeks of hearings and then whatever the Mayor wants gets passed. Do you see your position changing that?

I don’t want to say that I see this position changing that necessarily. I think a lot of it depends on what is in the Mayor’s proposal [and] through my analysis whether there are alternative decisions that can be presented to the City Council. Maybe when the Mayor presents his budget this fall, it may be something like where there aren’t really too many good alternative options out there. That’s something we’re just going to have to wait and see.

Will the City of Chicago have flexibility, based on the circumstances presented to them in Springfield?

The legislative session is still going on. I was there for Gov. Rauner’s speech [to the City Council] . We’ll see what happens this session.

How do you stay independent? Your boss is one of the Mayor’s closest allies and people on your board are closely tied to the mayor.

To me, my big focus on this is just to give an honest review of what is being presented by the Mayor and what the options are to the City Council. That is my main route to maintaining my independence. I have discussed this with the aldermen, I’m going to be a straight shooter, I have some things with the Mayor’s Office I might agree with, I might not. I don’t necessarily see this–it’s not my role to be nitpicky about what’s going on with the City’s budget. It’s my role to help the City Council [understand] what is actually in the plan and what are some of the options for them to consider. I think that is going to be my angle of maintaining independence. I’m here as a resource, “OK guys, the numbers don’t lie, it is what it is.”

What do you see your relationship with places like Civic Federation and the Committee on Tax and Budget Accountability?

When I was with the State, I had a good working relationship with the Civic Federation and CTBA. I definitely plan on reviewing their recommendations, both in terms of what they have suggested in the past as well as going forward. The city has challenges and I think in my role I need to be open to all ideas in terms of moving forward.

Do you have any ideas in terms of what costs and expenses you might focus on?

That’s something I can’t really discuss right now, in terms of not wanting to get ahead of the process.

Have you been briefed at all, seen any of the documents, or are you still outside the door?

I’m still outside the door. I’m not planning on starting until July, so right now I’m going through documents that are publically available.

Are there any revenue ideas or savings from across Illinois or other states that you have in mind that you might be able to bring with you? 

Again, that’s a thing that I’ll be able to talk about more once I get through the process and working with the members of City Council.

What’s the difference between what you will do and what the inspector general does?

A lot of the inspector general’s audit functions are focusing on things that have already happened. Whereas, I think it’s my job in working with the City Council to be a resource on, “these are the options before you today. And these are the actions you might consider moving forward, and not in the past.” More forward looking.

Do you think your new job is to tell Moody’s to go stick it?

I don’t think Moody’s cares what I have to say.

I think the review process for that would be to say, this is what Moody’s or Fitch or S&P or Kroll’s said, this is why they said it. These are potential actions to get them to reverse course.

Do you think Chicago’s getting a raw deal from Moody’s?

Without being more in depth in what’s going on with the city, I can’t comment on that.

A former U.S. Marine who also worked as the chief of staff at the Illinois Capital Development Board in Springfield, newly elected 36th Ward Alderman Gilbert Villegas wants people to know that while he may be new to City Hall, he is not new to government.

“So, I know how it works, and I know how it doesn’t work and I’m looking at capitalizing in the areas where [government] does work and addressing issues  where it doesn’t,” Villegas told Aldertrack in a recent interview.

Gilbert Villegas beat Omar Aquino, a candidate backed by Cook County Democratic Party Chairman Joe Berrios, in a runoff to win the newly redistricted, predominantly Hispanic seat on the Northwest Side of Chicago. The ward’s former alderman who now represents the 38th Ward, Nick Sposato, endorsed and supported Villegas throughout the campaign. Sposato also gave the Villegas his old ward service office. But Ald. Sposato wasn’t Villegas’ only supporter, his campaign also received support from State Rep. Luis Arroyo, Sr., his son, Cook County Commissioner Luis Arroyo, Jr., and Cong. Luis Gutierrez.

Villegas is also co-founder of StrataGem, a government relations and business development services consulting group, and a former lobbyist for the Hispanic American Construction Industry Association.

Priorities: Villegas says he will be spending most of his first term addressing ward-related issues, because that’s what voters were most concerned about during the election. “I’m really going to focus on my platform, which was peace, public safety, education, accountability, city services, and economic development,” Villegas explained, adding that he will be working with the local police commander to find out what resources he needs to address issues of crime. “And I’m calling my ward office like a community command center, where we will be able to have dialogue, you know, monthly, or quarterly, or whenever it is needed for hot topic issues,” Villegas said.

Caucus Alignment: Villegas ran as a progressive candidate and secured the endorsement of mayoral candidate Jesus “Chuy” Garcia during the runoff campaign, but he says at this moment he is only committed to the Latino Caucus. “I feel there are issues that need to be addressed as it relates to employment, as it relates to diversity.” Villegas believes the Latino Caucus will help him do that. Villegas says shortly after winning the race he was also approached by leaders of both the Progressive Caucus and Paul Douglas Alliance, but, “is not prepared to make a decision,” on either of those groups.

Biggest Obstacles: Like most of his peers in the Council, Villegas says addressing the city’s pension debt will be his biggest obstacle. He advocates for more communication between City Hall and Springfield. “We need to engage and work with our state officials and governor’s office and have the governor take a look at implementing legislation that is favorable to the city,” Villegas said. “Also, we need to be more active in getting as many dollars as possible from Springfield. We need to take a look at the motor fuel tax. We’re putting in over 50-cents on the dollar and only getting 45-cents back.”

Ward Office: Sposato’s old office, 6934 W. Diversey Ave.

Chief of Staff: Magdalena Fudalewicz

The City Council Committee on Finance met for less than five minutes Tuesday morning because no one signed up to submit public testimony on a proposed ordinance to issue additional Multi-Family Housing Revenue Bonds, capped at $2.5M, for the Goldblatts Supported Living Project, a redevelopment project turning a former Goldblatt's Department Store building into an affordable housing complex for senior citizens. Pursuant to federal tax law, the City must hold a public hearing, known as a TEFRA hearing, before the full City Council can approve the issuance of these types of bonds. Chairman Ed Burke (14) read a prepared statement before adjourning the meeting. The City’s Department of Planning requested additional bonds to pay for higher than expected construction costs associated with the project.

TEFRA hearings, named after the federal Tax Equity and Fiscal Responsibility Act of 1982 and the federal Tax Reform Act of 1986, are mandated by the Internal Revenue Service to provide a reasonable opportunity for interested individuals to express their views, either orally or in writing, on the issuance of bonds and the nature of the improvements and projects for which the bond funds will be allocated.

There was no discussion on Ald. Joe Moreno’s (1) proposed ordinance to amend permit fees SSAs have to pay to provide services in the public way. Raymond Valadez, Ald. Moreno’s Chief of Staff, says the item was incorrectly scheduled for yesterday and will be discussed at the Finance Committee’s next meeting in June.

Committee Members Present: Chairman Ed Burke (14), Marty Quinn (13), Matt O’Shea (19), Michael Zalewski (23), Jason Ervin (28), Ariel Reboyras (30), Scott Waguespack (32). Newly elected Ald. Raymond Lopez (15) was also present in the Council Chambers, but he is not a member of the committee.

Hailing the ordinance as a good first step and touting the mayor’s support, a group of aldermen, workers, business owners, and labor gathered in the City Hall 2nd floor hallway on the first day after inauguration in support of paid sick days for private employees.

The press conference included speeches from workers like Abraham Cabrera of ARISE, who said he’s been working in food delivery for 15 years and never had a paid sick day, putting his childrens’ well-being at risk. Christine Cikowski, the owner of Honey Butter Fried Chicken in Avondale, spoke, saying that while her business does offer paid sick leave, the fact that other private businesses do not hurts her bottom line. Photo here.

Melissa Joseph, director of equal opportunity policy at Women Employed, said, “82% of voters support earned sick time. How is anyone going to step away from that? This is law in 18 other cities, and three states. This is a public safety issue.”

Ald. Joe Moreno (1), who sponsored a similar ordinance last year, called the new ordinance made public Tuesday “a starting point,” but no one at the press conference specified a timeline for passing the ordinance, and referred questions to the mayor’s office. “If we don’t see progress we’ll have a different kind of press conference,” Moreno said.  Other aldermen attendees included Jason Ervin (28), Raymond Lopez (15), John Arena (45), Walter Burnett, Jr. (27), Carlos Rosa (35) and Toni Foulkes (16).

In a non-binding city-wide referendum in this year’s general election, 82 percent of voters answered “Yes” on whether private employers should offer paid sick leave. Many supporters at Tuesday’s press conference, including members of ARISE Chicago and Teamsters Local 742, and Women Employed, held up signs saying so.

The ordinance calls for earned sick time:

• For a personal family illness or preventive care


• Due to incident of domestic or sexual violence


• Because of school or building closure due to a public health emergency


• Full and part-time employees:could earn 40 hours of sick time per year if employer has fewer than 10 employees


• Full and part-time employees:could earn 72 hours of sick time per year if employer has more than 10 employees, accrued hourly for every 30 hours worked.

Following yesterday's inaugural festivities, the Progressive Caucus sent out a release laying out their priorities:

• "ensuring that the City upholds its end of the pension promise to its workers"


• passing legislation for "earned sick time and paid maternity and parental leave" and $15 an hour minium wage


• "hiring at least 500 new police officers above the rate of attrition"


• "expand the capacity of the Inspector General"


• "fighting for an elected, representative school board, advocating for fair treatment and compensation for our teachers, and by calling for increased accountability for charter schools"

The Caucus is made up of 11 members: Ald. Leslie Hairston (5), Ald. Roderick Sawyer (6), Ald. Susan Sadlowski Garza (10), Ald. Toni Foulkes (16), Ald. David Moore (17), Ald. Ricardo Muñoz (22), Ald. Chris Taliaferro (29), Ald. Scott Waguespack (32), Ald. Carlos Ramirez Rosa (35), Ald. Nick Sposato (38) and Ald. John Arena (45).