Jonathan Bilyk Aug. 24, 2016, 5:53pm

While the city of Chicago won concessions, including increased rent, from the group that runs Millennium Park’s restaurant, records reveal City Hall and the Chicago Park District racked up a final tab of more than $7 million in legal fees to wage the years-long legal fight over the restaurant owners’ so-called “sweetheart deal.”

In early August, the city of Chicago and the owners of the Park Grill restaurant announced they had reached a deal to end the city’s lawsuit against the restaurateurs, and rewrite some of the terms of the 30-year contract the Park Grill owners had received from the Park District and the city to run the restaurant and related concessions in Millennium Park.

Under the deal, the Park Grill group agreed to begin paying base rent, altering the previous contract which had called for the restaurant to pay rent out of its profits. The new deal would also require the restaurant group to begin paying for its own water and natural gas service and for its own trash removal, which had previously been covered by the city.

All told, the city of Chicago has estimated the new agreement would bring in an additional $5.7 million for the city over the life of the contract, when compared to the terms of the previous operating agreement.

The Park Grill group has disputed those estimates, however, saying the city’s numbers are too high. Attorney Stephen Novack, of Novack & Macey, who represented the Park Grill, said the city’s estimates are based in part on garbage removal fees paid by the city, a service Novack said he believed the Park Grill’s owners could obtain for “a fraction” of the cost paid by the city.

Records supplied by the city and the Park District in response to Freedom of Information requests from The Cook County Record reveal taxpayers also picked up a hefty tab to obtain the settlement.

In October, records supplied by the city and Park District indicated the two entities had spent a combined $6.6 million of public funds to law firms to handle the litigation.

New records obtained in August now peg the total tab at more than $7 million.

Records obtained from the Chicago Department of Law, which handles litigation and other legal matters for the city, showed the city spent more than $3.37 million on legal fees paid to law firm Barnes & Thornburg LLP from the beginning of the legal action until July 2016.  

Park District records revealed law firm Reed Smith earned more than $3.28 million from the litigation, as of June 2016. The records showed the Park District also paid nearly $357,000 to investment banking firm Stout Risius Ross to supply an “expert witness” for the case.

The legal action had dated back to 2011, after the city sued the Park Grill owners to attempt to undo the restaurant’s operating agreement, which city officials characterized as a “sweetheart deal” birthed of insider relationships and political connections.

In its lawsuit, the city, as the owner of the Millennium Park’s land, asserted it had never formally signed off on the “unconscionable” terms of the deal reached in 2002 between the Park Grill owners and the Park District. The city claimed the deal’s terms were, in part, the result of a romantic relationship between one of the leading members of the Park Grill ownership group and a Chicago Park District employee who worked with Park District officials responsible for negotiating the concession agreement.

The Park District has maintained that official played no role in negotiating the deal.

In September 2015, a Cook County judge rejected the city’s arguments, saying the city’s decision to wait until after news reports concerning the contract and the allegedly improper relationship became public undercut its contentions about just how bad the deal was.

“Even if the City did not authorize the Concession Agreement before it was signed, the City ratified the Concession Agreement and now may not challenge its validity,” wrote Cook County Circuit Judge Moshe Jacobius.

Both sides appealed in the weeks following the ruling, extending the legal battle several more months. The appeals court never weighed in on the matter.

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