WATCHDOGS: The
Donald & the Democrat; Burke saved Trump $11.7M
Ald. Edward M. Burke, left, with Republican presidential
front-runner Donald Trump at the City Club of Chicago last June. AP file photo
Chicago 04/30/2016, 10:00pm
Tim Novak and Chris Fusco
A law firm headed by Ald. Edward M. Burke, one of
Chicago’s most powerful Democrats, has helped Republican presidential candidate
Donald Trump
and investors in his luxury downtown hotel cut their property taxes
by 39 percent over seven years, saving them $11.7 million, a Chicago Sun-Times
analysis has found.
Burke — one of 47 Chicago aldermen who voted to approve
development of Trump
International Hotel & Tower in
2002 — won reductions in six of the seven years for the hotel, retail and
other commercial space in the skyscraper, records show.
Now, Burke’s law firm, Klafter & Burke, is trying
to get partial refunds of those taxes for the billionaire and his investors.
The firm has filed appeals in court and to a state agency, arguing the taxes
paid were too high in some years.
Burke is among an elite group of current and former
Chicago politicians working for law firms that specialize in helping property
owners navigate Cook County’s arcane property-tax system. These clout-heavy
lawyers try to persuade other elected officials — the Cook County
assessor, the Cook County Board of Review’s commissioners and judges — to lower
the estimated values of buildings and other real estate.
When they succeed, that means lower property taxes for their
clients — and higher bills for other property owners to make up the difference.
The attorneys generally work for a percentage of the savings.
Trump first hired Burke’s law firm in 2006, according to
a spokeswoman for Trump Hotels.
Trump Tower, 401 N. Wabash Ave. | Rich Hein / Sun-Times
Trump didn’t respond to questions about how much he pays
the Southwest Side ward boss or why he chose him over other property-tax
lawyers.
Burke declined to comment.
Burke — a law school classmate of former Mayor Richard
M. Daley and a former Chicago cop
— replaced his late father as 14th Ward alderman in 1969.
Representing a predominantly Hispanic ward at City Hall,
he has amassed a $10.4 million political war chest. He’s used that to bankroll
the campaigns of politicians including former Gov. Pat Quinn and Cook County
State’s Attorney Anita Alvarez — whose office ends up working against Burke
when he sues county officials seeking lower property taxes for Trump and other
clients.
Burke, 72, also is a powerful member of the Cook County
Democratic Party, overseeing the committee that decides which lawyers the party
endorses for judge.
In 2001, Trump decided to redevelop a coveted site on the
Chicago River where the Sun-Times had operated in a seven-floor building since
1958. Originally, he was an equal partner with Hollinger International, the
newspaper’s owner at the time. Trump eventually bought full control of the site
amid a federal Securities and Exchange Commission investigation of Hollinger
chairman Conrad Black, who ended up in prison for looting the company.
The 92-story residential and commercial skyscraper was
under construction when Burke began handling property-tax appeals for Trump,
county records show.
The alderman contested the values that then-county Assessor
James Houlihan placed on the entire property in 2006, 2007 and 2008. Burke’s
appeals were rejected by the Board of Review, a panel of three elected
commissioners — two Democrats and a Republican — that decided Houlihan’s
property assessments were correct.
In six of the following seven years, Burke was successful
in persuading the assessor, the Board of Review or both to lower the
assessments — and ultimately the tax bills — for commercial space
including 339 hotel condominiums owned by Trump and his investors.
Burke also has filed separate appeals
challenging the assessments on the tower’s 480-plus residential
condos — when Trump owned them and after he sold them to buyers including
Chicago Blackhawks star Patrick Kane. In addition to the money Burke has saved
Trump and his investors on the commercial space, he has won tax reductions for
Trump, Kane and hundreds of other residential condo owners.
To calculate the savings Burke got for Trump, the
Sun-Times obtained county records showing the initial values the assessor
assigned to each property in the tower and compared them to the final property
values set by the Board of Review. The newspaper then calculated the tax cuts
Burke won from the assessor and the Board of Review on the hundreds of tax bills
for commercial property that county officials sent to Trump’s company — 401
North Wabash Ventures LLC — and to investors who bought dozens of hotel condos
Trump operates.
In 2009, Burke saved Trump’s company almost $1.1 million
when he got the Board of Review to slash the assessor’s estimated $141 million
market value by 21 percent for the entire tower, which had yet to be
subdivided into individual commercial spaces and residential condos. Trump paid
$2.7 million in taxes that year.
Burke later went to court, seeking tax refunds from the
Chicago Public Schools, City Hall, Cook County and other governments, arguing
Trump’s taxes were “erroneous, excessive, illegal and void” because the
assessor and Board of Review overvalued the skyscraper. Alvarez is fighting
the suit. City Hall has intervened in the case. Because that created a conflict
of interest for the alderman, Burke handed it off to another law firm.
In 2010, Burke saved Trump’s company almost $3.5 million
by convincing Houlihan he’d overvalued the entire skyscraper.
Houlihan lowered his $432 million estimation of the value to $122 million after
Burke argued that most of the residential condos hadn’t been sold, the tower’s
storefronts along the river were vacant, the hotel had largely been unoccupied
and sales of hotel condos hadn’t worked out as planned. Burke’s law firm
even called the concept of selling hotel rooms to investors a “failed business
model.”
Trump ended up paying $3.9 million in taxes that year on
the commercial space and hundreds of residential condos he had yet to sell.
In 2011, Burke saved Trump and his growing group of hotel
investors $1.7 million by convincing Houlihan’s successor, Joseph Berrios,
another powerful Democratic Party leader,
that Houlihan had been overvaluing the commercial space, which was now taxed
separately from the residential property.
“The hotel is NOT located in the prime Michigan Avenue
hotel area, yet it is being valued greater than those established and better
located hotels,” attorney Kelly Keeling Hahn of Burke’s firm wrote, adding,
“The entire retail space of the building is un-leasable.”
Initially, Houlihan decided the commercial space owned by
Trump and his investors was worth $75 million. Burke got that cut by 65
percent.
“Upon taking office, assessor Berrios realized that the
previous administration had erred very significantly by over-assessing some of
the property,” Berrios spokesman Tom Shaer says, explaining the retail space
not only has gone unoccupied but hasn’t even been finished.
The Board of Review rejected Burke’s efforts to win Trump
additional savings.
Trump and his investors paid $1.3 million in taxes on the
commercial space in 2011 — less than half the taxes it had been facing.
In 2012, Burke saved Trump and his investors $1.7 million
by getting Berrios to lower their property values, then persuading the
Board of Review to lower them more. Initially, Berrios valued Trump’s
properties at $103 million. Burke got that cut by 40 percent, resulting in
Trump’s group paying $2.5 million in property taxes.
Burke is now appealing those payments before the Illinois
Property Tax Appeal Board, seeking a partial refund.
Trump Tower, 401 N. Wabash Ave. | Rich Hein / Sun-Times
In 2013, Burke won his largest savings for the Trump
group — more than $3.5 million — after the assessor recalculated the
skyscraper’s value as part of the every-three-year reassessment of all property
in Chicago. Initially, Berrios valued the Trump properties at $129.3 million.
Burke got the assessor to cut that by 60 percent. So the group’s tax bills
totaled almost $2.3 million. Again, Burke has filed a lawsuit hoping to get a
partial refund of the taxes paid.
In 2014, Burke lost his attempts to cut the taxes on the
commercial space. Trump and his group paid $2.3 million in taxes that year.
Last year, Burke shaved $242,545 off the Trump tax bills
by persuading Berrios to lower the latest assessments by 9 percent,
cutting the market value of the commercial space from $56.4 million to $51.1
million. The Board of Review refused to cut further. Trump’s group ended up
paying $2.3 million in property taxes. Burke again has filed suit seeking a
partial refund.
This year, Burke’s firm appealed the Trump taxes again,
seeking a 20 percent cut in the value of the commercial space.
“Having 80,000 square feet of vacant river walk space is
an enormous detriment to the hotel,” Keeling Hahn of Burke’s firm wrote. “While
the retail is at the bottom of one of Chicago’s luxury hotels, there is no
market for retail space which has no direct access to major foot or car
traffic.”
The Board of Review rejected Burke’s request, keeping the
market value at $62.7 million.
Contributing: Data Reporting Lab editor
Darnell Little
TRUMP’S ILLINOIS CAMPAIGN GIVING
Donald Trump and his businesses have made $92,294 in
political contributions to Illinois candidates and political action committees
since 2001, the year he announced plans for Trump Tower. The recipients:
Mayor Rahm Emanuel:
$50,000
Cook County Democratic
Party: $12,500
Former Gov. Rod
Blagojevich: $9,000
Ald. Brendan Reilly (42nd): $5,500
Illinois Hotel & Motel PAC: $5,085
Former Gov. George Ryan:
$5,000
Former governor candidate Edwin Eisendrath: $4,359
Green Industry PAC: $850
SOURCE: Illinois State Board of Elections
Edward M. Burke
Edward M. Burke
is the founder of Klafter and Burke,
married to Anne M. Burke, and a city
council member for Chicago (IL).
Note: Anne M. Burke is
married to Edward M. Burke, a justice
for the Illinois Supreme Court, and
an overseer at the Memorial
Sloan-Kettering Cancer Center.
Akin,
Gump, Strauss, Hauer & Feld, LLP is the lobby firm for the Memorial Sloan-Kettering Cancer Center,
and was the lobby firm for Johnson &
Johnson.
Vernon E. Jordan
Jr. is a senior counsel for Akin,
Gump, Strauss, Hauer & Feld, LLP, an honorary trustee at the Brookings
Institution (think tank), married
to Ann Dibble Jordan, Valerie
B. Jarrett’s great uncle, Antoinette
Cook Bush’s stepfather, a director at the American Friends of Bilderberg
(think tank), and a 2008 Bilderberg conference participant (think tank).
Robert S. Strauss
was a partner at Akin, Gump, Strauss,
Hauer & Feld, LLP, and a chairman for the Democratic National Committee (DNC).
Democratic
National Committee (DNC) is a committee
for the Democratic Party.
Foundation
to Promote Open Society was a funder for the Brookings Institution
(think tank), the Committee for
Economic Development, the Aspen Institute (think tank), the Robin Hood Foundation, and the International Rescue Committee.
George Soros
was the chairman for the Foundation to Promote Open Society.
Charles O.
Prince III was a trustee at the Brookings Institution (think tank), and is a director at Johnson
& Johnson.
Mark B. McClellan
was a senior fellow at the Brookings Institution (think tank), and is a director at Johnson
& Johnson.
Ann Dibble Jordan
is an honorary trustee at the Brookings Institution (think tank), married to Vernon E. Jordan Jr.,
Antoinette Cook Bush’s mother, was an overseer at the Memorial Sloan-Kettering Cancer Center,
and a director at Johnson & Johnson.
Robert Wood
Johnson IV is the heir to Johnson
& Johnson, and a condo owner at the Trump International Hotel & Tower, New York.
Donald
Trump is a stakeholder in the Trump
International Hotel & Tower, New York, and the candidate for the 2016 Donald Trump presidential campaign.
Valerie B. Jarrett
is Vernon E. Jordan Jr’s great niece, the senior
adviser for the Barack Obama
administration, and a member of the Commercial
Club of Chicago.
Cyrus F.
Freidheim Jr. is an honorary trustee at the Brookings Institution (think tank), and a member of the Commercial Club of Chicago.
Commercial Club of Chicago, Members Directory A-Z (Past Research)
Tuesday, December 17, 2013
Newton N. Minow
is a member of the Commercial Club of
Chicago, and a senior counsel at Sidley
Austin LLP.
R. Eden Martin is
the president of the Commercial Club of
Chicago, and counsel at Sidley
Austin LLP.
Sidley Austin
LLP was the lobby firm for Johnson
& Johnson, and the legal adviser for the Association of Community
Organizations for Reform Now (ACORN).
Michelle Obama
was a lawyer at Sidley Austin LLP,
and Richard M. Daley’s staffer.
Barack
Obama was an intern at Sidley Austin
LLP, an attorney for ACORN vs.
Illinois State Board of Elections, and Obamacare
is his signature policy initiative.
CGI Group Inc.
was the Obamacare contractor that
developed Healthcare.gov web site.
Donna S. Morea
was the EVP for the CGI Group Inc.,
and a trustee at the Committee for
Economic Development.
Ronald A. Williams
is a trustee at the Committee for
Economic Development, and a director at Johnson & Johnson.
William E.
Brock III was a trustee at the Committee
for Economic Development, and a chairman for the Republican National Committee (RNC).
Rahm I. Emanuel
is a member of the Commercial Club of
Chicago, the Chicago (IL) mayor,
was the White House chief of staff for the Barack
Obama administration, and Laurence
D. Fink is his informal adviser.
Richard M. Daley
is a member of the Commercial Club of
Chicago, was the Chicago (IL) mayor,
Michelle Obama was his staffer, and Valerie B. Jarrett was his deputy chief
of staff.
James S.
Crown is a member of the Commercial Club of Chicago, and the vice
chairman for the Aspen Institute (think tank).
Lester Crown
is a member of the Commercial Club of Chicago, Henry Crown’s son, and was a lifetime trustee at the Aspen
Institute (think tank).
Henry
Crown was Lester Crown & John J. Crown’s father.
John J. Crown is Henry Crown’s son, and a judge for the Cook County (IL) Court.
Antoinette Cook
Bush is Vernon E. Jordan Jr’s
stepdaughter, Ann Dibble Jordan’s
daughter, and was a partner at Skadden,
Arps, Slate, Meagher & Flom LLP.
Patrick J.
Fitzgerald is a partner at Skadden,
Arps, Slate, Meagher & Flom LLP, was the prosecutor for the U.S. vs. Rod Blagojevich et al, and the
prosecutor for the U.S. vs. George Ryan
Sr. and Lawrence Warner.
Rod R. Blagojevich
is the defendant in U.S. vs. Rod
Blagojevich et al, and was an Illinois
state government governor.
George Ryan Sr.
is the defendant in the U.S. vs. George
Ryan Sr. and Lawrence Warner, and was an Illinois state government governor.
Laurence D. Fink
is Rahm I. Emanuel’s informal
adviser, a director at the Robin Hood
Foundation, and was Timothy F.
Geithner’s informal adviser.
Robin Hood
Foundation raised
money for the Hurricane Sandy relief.
Hurricane
Sandy New Jersey Relief Fund is a relief organization for Hurricane Sandy.
Steven
A. and Alexandra M. Cohen Foundation was a funder for the Robin Hood Foundation, Hurricane Sandy New
Jersey Relief Fund, and the Memorial Sloan-Kettering Cancer Center.
Anne M. Burke is
an overseer at the Memorial
Sloan-Kettering Cancer Center, a justice for the Illinois Supreme Court, and married to Edward M. Burke.
Cam Henderson is
an executive director for the Hurricane
Sandy New Jersey Relief Fund, was Mary
Pat Christie’s chief of staff, and the finance director for the 2016 Chris Christie presidential campaign.
Mary Pat
Christie is the chair for the Hurricane
Sandy New Jersey Relief Fund, married to Christopher J. Christie, the president of the Drumthwacket Foundation, and Cam
Henderson was her chief of staff.
Christopher
J. Christie is married to Mary Pat
Christie, an honorary chairman for the Drumthwacket
Foundation, the New Jersey state
government governor, and was the candidate for the 2016 Chris Christie presidential campaign.
Drumthwacket
Foundation maintains the governor's mansion for the New Jersey state government.
Donald
Trump was a donor for the Drumthwacket
Foundation, a funder for the Bill,
Hillary & Chelsea Clinton Foundation, is the candidate for the 2016 Donald Trump presidential campaign,
and a stakeholder in the Trump
International Hotel & Tower, New York.
Open
Society Foundations was a funder for the Bill, Hillary & Chelsea Clinton Foundation, and the Atlantic Council of the United States
(think tank).
George
Soros is the founder & chairman for the Open Society Foundations, a co-chair, national finance council at
the Ready PAC (Ready For Hillary),
and was the chairman for the Foundation to Promote Open Society.
Foundation
to Promote Open Society was a funder for the International Rescue Committee, Common Cause, the Committee
for Economic Development, and the Aspen
Institute (think tank).
Timothy F.
Geithner is a director at the International
Rescue Committee, married to Carole
Sonnenfeld Geithner, was an overseer at the International Rescue Committee, the secretary at the U.S. Department of the Treasury for the
Barack Obama administration, and Laurence D. Fink was his informal
adviser.
Carole
Sonnenfeld Geithner is married to Timothy
F. Geithner, and was a research associate for the Common Cause.
Internal
Revenue Service (IRS) is a
division of the U.S. Department of the
Treasury.
Charles O.
Rossotti was a commissioner for the Internal
Revenue Service (IRS), and is a director at the Atlantic Council of the United States (think tank).
IRS Oversight
Board is a citizen’s board for the Internal
Revenue Service (IRS).
Deborah L.
Wince-Smith was a member of the IRS
Oversight Board, and is a member of the Belizean Grove.
Carolyn S. Chin
is a member of the Belizean Grove,
and was a trustee at the Committee for
Economic Development.
William E.
Brock III was a trustee at the Committee
for Economic Development, and a chairman for the Republican National Committee (RNC).
Julie
Daum is a trustee at the Committee
for Economic Development, and a member of the Belizean Grove.
Mary Agnes
Wilderotter is a trustee at the Committee
for Economic Development, and a member of the Belizean Grove.
Davia B. Temin is
a trustee at the Committee for Economic
Development, and a member of the Belizean
Grove.
Brenda J. Gaines
is a member of the Belizean Grove,
and was the mayor's deputy chief of staff for Chicago (IL).
Henrietta
Holsman Fore is a member of the Belizean
Grove, a trustee at the Committee
for Economic Development, and a trustee at the Aspen Institute (think tank).
Belizean_Grove
is the equivalent to the male-only social group, the Bohemian Club.
Henry A. Kissinger is a member of the Bohemian
Club, a director at the Atlantic Council of the United States (think
tank), an overseer at the International Rescue Committee, a director
at the American Friends of Bilderberg (think tank), was a lifetime trustee
at the Aspen Institute (think tank), and a 2008 Bilderberg conference
participant (think tank).
James S.
Crown is the vice chairman for the Aspen Institute (think tank), and
a member of the Commercial Club of Chicago.
Lester Crown
was a lifetime trustee at the Aspen Institute (think tank), is a member
of the Commercial Club of Chicago, and Henry Crown’s son.
Henry
Crown was Lester Crown & John J. Crown’s father.
John J. Crown is Henry Crown’s son, and a judge for the Cook County (IL) Court.
Walter Isaacson
is the president & CEO for the Aspen Institute (think tank), and was
the chairman & CEO for CNN.
CNN Worldwide
is a division of CNN.
Jeff
Zucker is the president of CNN
Worldwide, a director at Robin Hood
Foundation, and an overseer at the Memorial
Sloan-Kettering Cancer Center.
Robin Hood
Foundation raised money for the Hurricane
Sandy relief.
Hurricane
Sandy New Jersey Relief Fund is a relief organization for Hurricane Sandy.
Steven
A. and Alexandra M. Cohen Foundation was a funder for the Robin Hood Foundation, Hurricane Sandy New
Jersey Relief Fund, and the Memorial Sloan-Kettering Cancer Center.
Anne M. Burke is
an overseer at the Memorial
Sloan-Kettering Cancer Center, a justice for the Illinois Supreme Court, and married to Edward M. Burke.
Edward M. Burke
is married to Anne M. Burke, the
founder of Klafter and Burke, and a
city council member for Chicago (IL).
No comments:
Post a Comment