May 23--A clout-heavy group of investors was handed an illegal and unfair lease to run a lucrative restaurant in a prime spot in Millennium Park, and got it with the help of a Park District official who was having an affair with one of them, a city lawyer said Friday during closing arguments in Mayor Rahm Emanuel's lawsuit to try to end the deal.
The investment group that included restaurateur Matthew O'Malley never would have gotten the lease to operate the Park Grill in 2003 if Park District official Laura Foxgrover had told the selection committee considering the bids that she was having an affair with O'Malley, city attorney William McErlean said during his closing before Cook County Circuit Judge Moshe Jacobius.
"There can be no doubt that had her sexual or romantic relationship with one of the bidders been disclosed to the selection committee ... the whole process would have screeched to a halt," McErlean said. "The members of the committee wouldn't have jeopardized their reputations on that kind of deal."
But Park Grill lawyer Stephen Novack countered that the city provided "no direct evidence (Foxgrover) influenced the outcome" of the lease agreement.
And Novack argued Mayor Richard M. Daley's administration knew full well what was going on with the Park Grill deal, pointing out the city closed Michigan Avenue at one point to run a gas line to the park for the restaurant, and that "the City Council amended the lakefront liquor ordinance specifically for the purpose of allowing the Park Grill to sell alcohol."
Plus, Daley attended the restaurant opening, Novack pointed out. "It's simply inconceivable that this could have happened without the proper authorization, given that the city wanted a white tablecloth restaurant in the park, wanted just one such restaurant, and that all this was done properly and out in the open," Novack told Jacobius.
Novack has contended Emanuel simply wants to tear up the contract so he can have a "do-over" to get better terms.
Emanuel's administration sued the Park Grill owners in December 2011. In addition to the Foxgrover allegations, the lawsuit contends the contract to run the restaurant is invalid because City Hall holds title to most of Millennium Park, but the Park District agreed to the lease, which could last up to 30 years if the investors exercise extensions. Emanuel has said "city taxpayers were taken advantage of" in the deal.
The bench trial has been proceeding in fits and starts for more than a year in front of Jacobius, who said he will rule at a later date.
O'Malley runs the Chicago Firehouse Restaurant in the South Loop, which was severely damaged in a blaze late last year. The restaurant is a Daley favorite; he took President George W. Bush there for the president's birthday in 2006. Also investing in the Park Grill were Daley friend Fred Barbara and city contractor Raymond Chin, among others.
Daley himself was expected to be a key witness for the Park Grill owners in the case, but the restaurant group's lawyers dropped their subpoena of the former mayor last July after Daley's attorneys submitted a medical affidavit. Daley's attorneys have not revealed any information about his condition. He was hospitalized in the intensive care unit at Northwestern Memorial Hospital at the end of January 2014 after falling ill during a business trip to Arizona.
The Park Grill lease sets a yearly base payment of $275,000. But the operators of the grill have not made that payment because it was deferred under terms of the contract. The company pays about $250,000 a year in rent based on a percentage of food and drink sales at the restaurant.
jebyrne@tribpub.com
