Clout Cafe Wins Again

Park Grill doesn't pay property taxes

By Steve Rhodes
|  Tuesday, Jul 28, 2009  |  Updated 1:19 PM CDT
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Clout Cafe Wins Again

parkgrillchicago.com

A concession, not a restaurant.

It wasn't long after the hinky backstory to the the Park Grill in Millennium Park earned it a moniker among political insiders isn't given easily: the Clout Cafe.

It continues to earn its nickname.

For example, it's connected owners still don't have to pay property taxes.

"In late June the Illinois Appellate Court ruled in favor of the Park Grill in its fight against the Cook County assessor, dropping the curtain on the latest act in one of the more sensational scandals of Mayor Daley's reign," the Reader reports.

"The ruling received little coverage, but at one point the restaurant, right under the Bean in Millennium Park, was front-page news, yet another example of the connected and powerful in this town managing to catch multimillion-dollar breaks at taxpayer expense.

 "That was back in 2005, when the Sun-Times revealed that the owners had managed to win the Park District's competitive bid process for the right to operate in the prime space -- even though their bid was the lowest of three. Officials said they liked the group's experience.

 "The investors included Matthew O'Malley, who also owns the Chicago Firehouse, where Daley took George W. Bush in 2006 to celebrate the president's 60th birthday; relatives of Tim Degnan, the mayor's former chief of staff and political strategist; and Fred Barbara, a Daley friend, millionaire businessman, and nephew of the late alderman and mobster Fred Roti."

 That's a powerful roster, but Cook County Assessor James Houlihan thought the Grill oughta pay property taxes no matter who backed it -- and no matter what kind of sweetheart deal Daley's park district gave his pals.

But the state apellate court's recent ruling upheld a Cook County court's ruling that the restaurant has a concession agreement with the park district, not a lease, and therefore is immune to property taxes.

Pretty sneaky, Sis! 

"Restaurants and other businesses that lease property from the government typically pay what’s called leasehold taxes, while vendors who sell hot dogs or ice cream operate under a concession license agreement and aren't required to pay real estate taxes," Crain's explains. "Even though it serves food at a restaurant - and not a pushcart - Park Grill was awarded a 20-year concession license that requires annual payments to the park district of $245,000 plus a percentage of sales."

Under Houlihan's valuation, the restaurant would have reportedly owed more than $350,000. 

But then, that's assuming that the Park Grill is a restaurant leasing property from the city, which clearly it is not.

Steve Rhodes is the proprietor of The Beachwood Reporter, a Chicago-centric news and culture review.

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