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Park Grill Countersues City to Keep Terms of Daley-Era Deal

By Chris Bentley in News on Dec 16, 2011 8:40PM

Image Credit: Matt Maldre
Responding to a lawsuit filed Dec. 1 by the City, the owners of Park Grill filed a countersuit Thursday to protect a Daley-era agreement that Mayor Emanuel’s top attorney says is shorting taxpayers.

The 2003 contract sets a base yearly payment of $275,000. But the grill’s operators, which include Daley confidante Fred Barbara and city contractor Raymond Chin, pay only about $250,000 a year in rent based on a percentage of their sales under a concession deal. The Park District also agreed to pay for the restaurant’s water, gas and garbage collection.

What’s more, the restaurant is exempt from property taxes. Former Cook County Assessor James Houlihan brought that matter to court, but was ultimately unsuccessful in wringing property taxes from the for-profit restaurant because of the legal distinction between a lease and a concession agreement.

The Sun-Times once again called out “the clout-heavy deal” in an editorial earlier this month. In March, the Sun-Times reported that Park Grill's current management group, Millennium Park Joint Venture LLC, was looking to sell the restaurant.

Now Park Grill claims the city is holding that deal hostage by attempting to break the concession agreement before the 20-year deal is up. The city says the agreement is invalid because the Park District has no authority to effectively lease out Millennium Park, which is mostly under City Hall’s purview. Park Grill sits on the one part of Millennium Park still controlled by the Park District, but the city argues the District needed City Council approval to issue a concession permit.

Michael Shakman, counsel for the popular restaurant near the Bean sculpture, called the city’s lawsuit “way off base”:

“This lawsuit punishes honest people who created a restaurant that was risky and uncertain when the Park Grill agreed to go into Millennium Park,” Shakman said in a statement. “Now that Millennium Park is successful, the city wants to redo the deal and wants money to which it has no right. That’s not fair. A deal is a deal.”

Park Grill’s investors are threatening to turn the suit around on the Park District, which they said in a statement would be liable for more than $15 million in damages if the city successfully argues that the District did not have the authority to grant rights to build and operate the restaurant.

Shakman points out lawyers from City Hall were well aware of the agreement when it was crafted under Mayor Daley and didn’t object then. The case may hinge once again on the finer points of municipal real estate law, but it’s the “disproportionately favorable terms” of that agreement, as the Emanuel administration's lawsuit put it, that are really on trial.

Below are both lawsuits.

City Lawsuit Against Park Grill

2011-12-15 Motion for Prelim Injunction