The city of Chicago and the owners of the Park Grill
restaurant in Millennium Park have reached a settlement to end the years-long
legal saga cutting across Chicago’s culture of politics and clout.
Stephen Novack, attorney with the firm of Novack & Macey, which represented the
restaurant’s ownership group, said the deal would rewrite some of the terms of the 30-year
contract the restaurant group had received from the city and the Chicago Park
District to operate the “white tablecloth” establishment and related
concessions in Chicago’s premier public park.
Under the terms of the deal, the Park Grill group has agreed
to begin picking up the tab for its own water and natural gas service, as well
as for trash removal, all of which had been provided free of charge under the
original contract terms. Novack said the deal also would allow the Park Grill to select its own trash removal contractor, which he said would allow the restaurant to reduce the amount spent on the service to "a fraction" of what the city had been paying through its vendor.
Additionally, the Park Grill agreed to begin paying “base
rent,” Novack said, rather than paying annual fees based on a percentage of
the restaurant’s net revenues under the current contract terms. Novack did not immediately specify how much the
restaurant’s owners would pay in “base rent.”
Novack said the deal was very similar to what the Park Grill
owners had offered to the city years ago, before City Hall first filed its
lawsuit in Cook County Circuit Court.
“In fact, my clients offered the City
essentially what it is getting in settlement before the City filed its lawsuit
and before the City and Park District incurred millions of dollars in
attorneys' fees and costs in the litigation,” Novack said in a prepared
statement. “This meritless litigation that has cost the taxpayers and my
clients so much is finally over."
A spokesman for the city did not return a call requesting comment Friday afternoon.
The matter first landed in court in
2011, following the inauguration of Mayor Rahm Emanuel, when the city sued the
restaurant group to undo the contract, which officials characterized as a “sweetheart
deal” doled out to friends and allies of former Mayor Richard M. Daley. The
city had asserted it held ownership of the park land on which the restaurant
sits, yet had never formally consented to the contract reached in 2002 between
the Park District and the group, legally known as Millennium Park Joint
Venture. That group, led by caterer James Horan and restaurateur Matthew O’Malley,
included a number of other people reportedly connected to Daley, including
friends and neighbors of the former mayor and officials in his administration,
city contractors and members of city boards and commissions.
The city alleged the deal was improperly
negotiated to guarantee the Park Grill group “unconscionable” terms, including
free water, natural gas and garbage removal and exemption from property taxes,
among other items. Because of these terms, the city argued the Park Grill owed it more than $8 million.
The city had particularly pointed to a relationship
between O’Malley and a former Chicago Park District official who worked with
the people responsible for negotiating the concession agreement. According to
published reports, that official, identified as Laura Foxgrover, had come to
the Chicago Park District from O’Malley’s former business and had born a child
with O’Malley. They later married.
The relationship between O’Malley and
Foxgrover was made public in 2005, when the Chicago Sun-Times first reported
The Park District has said Foxgrover
played no role in negotiating the deal.
Following those published reports, the
city sued the Park District and the Park Grill investors.
In September 2015, however, Cook County
Judge Moshe Jacobius shot down the lawsuit, saying the city’s decision to wait
until after the news reports concerning the contract and the allegedly improper
relationship became public undercut its contentions concerning the severity of
the impropriety of the restaurant contract.
Jacobius said the city’s actions
before and after the deal was signed demonstrated it had empowered the Park
District to act as its agent in negotiating the agreement and signaled to the
Park Grill group City Hall was on board.
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,”
the judge wrote.
Both sides filed appeals in the matter last fall.
Novack said the settlement deal was being presented to the
Illinois First District Appellate Court, perhaps as soon as Friday, to allow
the court to sign off on the deal and end the litigation.
Before the appeals were filed, records obtained by the
Cook County Record showed the city and Park District had combined to spend more than $6.6 million on lawyers’
fees to wage its court fight – a number that is certain to have increased in
the months since.
According to the records supplied at that time,
the city paid its lawyers, from the firm of Barnes & Thornburg, more than $3.3 million from January 2012, when it first hired the firm, to September 2015, shortly before Jacobius handed down his decision in the case.
The Park District
paid its lawyers, from the firm of Reed Smith LLP, more than $3.13 million from December 2011 to April 2015.
“The City and Park District have now
agreed to what we have been saying for years and what Judge Jacobius ruled - namely,
that my clients' Concession Agreement is and always has been legal, valid and
binding according to its terms,” Novack said.