James Horan and Matthew O’Malley, the well-connected proprietors of the Park Grill restaurant in Millennium Park, got a sweet deal. In 2003 they signed a 30-year contract with the Park District that allowed them to pay relatively little for the right to operate a restaurant, a souvenir shop, a bakery, and several kiosks and concession carts in the park. The deal was so sweet it drew lots of attention from the media–and from the county tax assessor. Now they’re about to get hit with a big property tax bill, even though Park District concessionaires rarely pay property taxes.
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It’s still not clear exactly what Horan and O’Malley are supposed to pay in return. The contract states that they have to pay either an annual minimum fee of $275,000 or a percentage of their gross, whichever is higher. But because the two paid to build the restaurant, the minimum fee has been temporarily waived, and they’re paying a percentage of their gross. Between opening day, in December 2003, and March 2005 they paid a total of only $162,656.72, so the first year’s payment was half what the minimum fee would have been. I don’t know how much they’ve paid since then. “You should call Jody Kawada in the mayor’s press office,” Park District spokesperson Michelle Jones told me. “We were instructed to refer all questions about that particular vendor to the mayor’s press office.” Kawada said she didn’t know how much the Park Grill paid but promised to get back to me. (She didn’t.) City officials I’ve talked to say that when you subtract all the things the Park District’s paying for, it’s probably losing money on the Park Grill.
When the story broke, Daley defended the contract, arguing that the city had gotten the best deal it could given that it was taking bids right after 9/11, but within a few days he and other administration officials were backtracking. He told reporters that the Park District had been too eager to get a restaurant up and running, and through his aides he demanded that the Park Grill negotiate a new deal. Soon afterward the city was negotiating with Horan and O’Malley.
Other City Hall observers suspect that Houlihan was playing hardball on Daley’s behalf, putting pressure on the Park Grill as a way to force it to renegotiate its contract with the Park District. (A publicist for the city says the two sides are still negotiating.) But Andrea Raila, who runs a property tax appeal service, agrees with Novack: she thinks Houlihan was acting on his own. “They have staffers who scour the papers looking for property like this that’s not being taxed,” she says. “They probably sent them a notice soon after they read about it in the press.”
Art accompanying story in printed newspaper (not available in this archive): photo/A. Jackson.
