Funny how Obama’s mentors — in this case, Allison Davis — keep popping up in articles on shady Chicago political deals. From today’s Sun-Times:
City Hall has another multimillion-dollar deal in the works for Mayor Daley’s nephew and his business partners.
It’s the latest in a string of city deals involving Daley nephew Robert Vanecko.
They began five years ago, when Vanecko and the mayor’s son, Patrick Daley, became hidden investors in a company that took over the city’s sewer-inspection contracts — a deal now under federal investigation.
Records show that Vanecko is a hidden investor in a company owned by Allison S. Davis, a friend of the mayor who’s seeking a $2 million loan from the city along with $838,369 in federal tax credits to build 54 apartments along the lakefront at 40th Street as part of the Chicago Housing Authority’s massive plan to replace the low-income high-rise projects that Daley has torn down.
City Hall has “set aside” money for the project, according to a letter the city sent Davis last fall. The city has yet to give final approval to the project, delayed now for more than a year in part because of the nationwide housing slump. And CHA officials have yet to sign a contract for the project.
But construction is expected to begin next summer, according to Lawrence Grisham, senior vice president of Habitat Co., which a federal judge has appointed to oversee the CHA construction projects.
Vanecko’s part in the project wasn’t mentioned in the application Davis and his son Jared Davis submitted to the CHA in May 2006, nor in the application they sent to city officials seeking money to build the apartments, according to city and CHA records.
The rest here.
For background on Allison Davis and his real estate deal, here’s a great Boston Globe piece that the MSM basically ignored. An excerpt:
Allison Davis, Obama’s former law firm boss, dabbled in development for years while he worked primarily as a lawyer. He participated in the development of Grove Parc Plaza. And in 1996, Davis left his law firm to pursue a full-time career as an affordable housing developer, fueled by the subsidies from the Daley administration and aided, on occasion, by Obama himself.
Over roughly the past decade, Davis’s companies have received more than $100 million in subsidies to renovate and build more than 1,500 apartments in Chicago, according to a Chicago Sun-Times tally. In several cases, Davis partnered with Tony Rezko. In 1998 the two men created a limited partnership to build an apartment building for seniors on Chicago’s South Side. Obama wrote letters on state Senate stationery supporting city and state loans for the project.
In 2000 Davis asked the nonprofit Woods Fund of Chicago for a $1 million investment in a new development partnership, Neighborhood Rejuvenation Partners. Obama, a member of the board, voted in favor, helping Davis secure the investment.
The following year, Davis assembled another partnership to create New Evergreen/Sedgwick, a $10.7 million renovation of five walk-up buildings in a gentrifying neighborhood. The project, a model of small-scale, mixed-income development, was subsidized by almost $6 million in state loans and federal tax credits.
Conditions deteriorated quickly. Chronic plumbing failures consumed the project’s financial reserves while leaving undrained sewage in some of the apartments. In October, after repeated complaints from building residents, the city government sued the owners, and a judge imposed a $5,500 fine.
New Evergreen/Sedgwick is managed by a company run by Cullen Davis, Allison Davis’s son and also a contributor to Obama’s campaigns. Cullen Davis said the problems were rooted in the way New Evergreen/Sedgwick was financed. Like most new projects, it is owned by a company created to own one building. That company determined how much to spend on renovations, how much to set aside for maintenance – and how much to keep as profit. When the maintenance funds ran out, there was no other source of money.