| At the January 18th board meeting, we had a long discussion about conducting an investigation on previous land purchases. The discussion raised several significant concerns. A day later, the former mayor had his attorney threaten Trustee Katsenes for “blowing the whistle” on his ownership of one of the properties. Several days later, he held a press conference, finally admitting to hiding his ownership and misleading staff, the planning commission and the village board. As Trustee Healy pointed out, there were several special insider deals where it appears the former mayor’s friends, neighbors, and business partners benefited substantially and then McLaughlin tried to cover the scheme up. See this picture for just one example: |
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| Then to top it all off the former mayor himself owned a property on Beacon and illegally hid his ownership from the village to financially benefit, violating state and village disclosure laws. Trustee Healy also pointed out that on top of everything shown to us, we should not forget that just two blocks away from this property on Beacon, the former mayor was spending $64 million on a publicly funded housing project that would very likely raise his secret property’s value. Not to mention the other $10’s of millions spent on the Triangle Project, where friends of the former mayor got sweet deals and other small business owners got screwed. At the end of the discussion, I pointed out that I was glad that we passed an ethics ordinance that would make actions like this punishable. Given the serious and sensitive nature of these issues, I asked for our village manager to request proposals from three independent law firms to investigate, including:Identify rules or village ordinances, practices and/or procedures that were not followed.Identify any potential criminal actions for which a complaint should be filed.Identify all village property transactions, since clearly at least one was missed when we did our initial search. It looks like we need to go back to 1987 to capture John Humphrey donations – since it didn’t show.Summarize actions taken between acquisition and sale of each of the properties.Recommend procedural changes to ensure complete transparency moving forward.Recommend procedural changes to ensure best practices are followed for property acquisitions and sales.At the very least this unethical behavior from the former mayor is a violation of public trust, the trust of the board of trustees that he served with, and the planning commission that he appointed. However, based on the information provided here, it may very well be criminal. The former mayor has stated repeatedly in his campaign that village hall IS corrupt. I think he meant to say that it WAS corrupt. Apparently, he ran again in 2021 to ensure that his pattern of corruption stayed hidden from the Orland Park citizens. Unfortunately for him, we stumbled across this inappropriate, unethical and possibly illegal behavior. This has all been uncovered in just the past month—I wonder what we haven’t found yet. This is a stunning betrayal of the public trust! You can see all the documents pertaining to this here (you should either listen to or read through Trustee Katsenes’ comments as you flip through the documents given to the board.) Her comments are at 1 hour, 20 minutes and 30 seconds, Discussion on Special Insider Deals If you would like to watch the whole discussion you can watch it here, beginning at 1 hour and 6 minutes. Lastly, if you would rather read the detailed summary of my closing comments and the comments made by Trustees Milani and Katsenes, they follow here: TRUSTEE MILANI’S COMMENTS At the last meeting, I asked for more information on all of the single-family homes that were purchased and/or sold by the village – Looks like I have the information for five of themAfter digesting this information, my observations were that from when the village purchased these properties from 2004 to the beginning of Jan 2016:Three of the five were purchased for over the appraised valueFour of the five properties were not in a flood zone (and the one property had a 1% chance of flooding)The village paid for the closing costs on two of the five homesThe village did no improvements on any of these homes other than the ones where we removed the existing homes and paid for caissons (which I will soon explain why)The village eventually sold three of the properties and we have no offer letters on record for any of themThe most recent property, purchased in 2016, was 14403 Irving and was the only one that was in a flood zone (with a 1% chance of flooding)It was purchased for $30,000 over the appraisal after the board said they would not pay above the appraisal price – and there seemed to be a push by the former mayor for an even higher price on more than one occasion10’ of the property was sold to a neighbor, for $11,000, for which the village currently can’t find the record of the actual sale or a receiptThe property at 15160 Royal Fox Hunt was purchased in 2004 for $310,000 at the appraisal priceThe village installed swales but did nothing to the house prior to selling it.When the village sold this property, it was sold for $55,000 less than what the village purchased it forThe property at 14610 Westwood was purchased for slightly below the appraised value. This is the property that started all of this research, because the village recently received what appeared to be a very low offer. The price that was offered included a contingency that the village pay for the caissons required to build the house. The offer of $105,000 in and of itself was fine, but it seems ridiculous to pay for the caissons, which was previously estimated at $42,000 on 14620 Westwood. The house was removed AFTER a recommendation by CBBEL in 2007. It seems the study should have been done before we purchased it. The board was recently informed that this was the same price that was paid to the village for the property next door.That property, the one next door at 14620 Westwood, was purchased for the appraised value of $325,000 in 2005.The seller was allowed to live in the house for one year, rent free and the village paid all closing costs – even though the reason to purchase the house was once again, flood relief. The house was eventually removed, and the lot was sold in 2013, and the lot sold for $105,000, which seems OK, except for the fact that the village had to pay (based on an estimated cost of $42000 – for which we also do not have a receipt) to have the caissons installed as part of the constructionUpon hearing this, Trustee Katsenes raised concerns and later asked for a list of properties purchased and sold in the last 30 years – which got us to where we are todayBoth Westwood lots were appraised at $163,000 in 2009, and put up for sale, which also brings back the fact that paying $42,000 for caissons was ridiculous.I also found it interesting that there were several flood studies performed regarding the Tuckaway subdivision where these two properties are located.There was a 2003 flood project that indicated that a sewer pipe was to be installed down Westwood but mentioned nothing of buying any properties. This project was completed in 2007Prior to purchasing the homes, the opinion was that removing the homes would not fix the flood problems only a sewer system would (so why purchase)Also why did we purchase those two homes and only those two homes on the block in 2005? Makes no sense to me.Then we have the property at 15155 Windsor which we heard about at length at the last board meetingThis property had three appraisals in successive months and was ultimately purchased for the price of the final appraisal – To be honest, I do not think I have ever seen a purchaser of a home shop for higher appraisal prices beforeThe village paid the closing costs, as well as moving costsInterestingly, after hearing the story last week, none of the three appraisals indicated any flooding issues on the property. Additionally, the basement was finished in 2003, which is interesting since we heard so much about on-going flooding problems. There were no problems noted with the basement in any of the three appraisals. The village installed a swale and did no work to the home. So why was the home purchased?This property is the only one that had an appraisal associated with its sale. It was appraised at $380,000. The village sold it for $55,000 LESS than the appraisal price and $85,000 less than the original purchase price.There are very few executive session minutes discussing the purchase of this home, which is concerning.So, to tie some loose ends together, I need to bring up that in 2007, CBEL looked at all 4 homes and suggested that the Westwood homes be removed as it would cost 100-200K to flood proof them. It was stated that the improvements worked and any flood remediation on homes at Foxhunt and Windsor would be minimalWindsor and Foxhunt had no work done on the houses Why would we purchase the properties?Looking at the costs, 100-200K to flood proof would still have been a less costly alternative to the costs we paid for the purchase and demolition of these homes, less the price we received for the lot. This type of analysis should be completed BEFORE purchasing any property. My biggest concern is why didn’t we?All of this leaves me with several more questions and I am not sure if we can get the answers – but George, I will leave that up to you and staff:Why would the village pay over appraisal price for any home? How is that at all in the public and taxpayer’s interest?Why did the village pay ALL closing costs for two of the homes and not the other three?We apparently posted notice in the newspaper and sealed bid these homes, but our records are less than clear during the entire process, Why?Why does the village have no record of any offer letters? Were these secret sales? Because that is what they appear to be.Why did the village appraisal shop, and then agree to pay, a higher appraisal price on one property?Why was someone allowed to live in one of the houses rent free for one year – especially if the reason was flood relief?Why did the village pay moving costs for just one home? or any of the homes for that matter?Why were these purchased for flood relief yet only one of the homes indicates that it is in a flood zone or had a flooding problem? This is very suspicious to me.Why did the village buy these homes and not many of the others in town, like the Fernway subdivision, that the flooding was so bad back in 1996 that ESDA, the PD, and the FD were taking people out of there in row boats for 4 days straight? How is this good public policy? It’s inconsistent.If the village is going to buy properties for this reason, there should be a consistent process. Clearly, this process has been anything but. Fixing flooding is in the public interest – for example in Fernway where we continue to mitigate the flooding, drainage, and street problems – but buying homes and properties is just clearly not. TRUSTEE KATSENES COMMENTS Trustee Katsenes made the following comments. The questions asked by Trustee Milani are good ones. I have been in the real estate business for over 30 years and have never seen deals like this before. It appears the Village has been Paying over appraised value, multiple appraisals being obtained, paying for all closing costs including title and the survey, the Village paying back taxes, free rent, in one case for nearly one year after the Village purchased and closed, on the “hazardous” property, and not having received additional offers in the file on the sale. An offer was received in December of 2020 on the remaining Westwood lot that started this whole conversation. As previously stated, these 2 Westwood properties were part of the 4 homes purchased by the Village. The Westwood homes were demolished and one of these lots was sold to a neighbor of former Mayor Dan McLaughlin and a new home was constructed by Ulverton Enterprises. Unusual concessions were requested in the December 2020 offer that were given on the other Westwood lot sale. Based upon what Trustee Calandriello said last meeting, I decided to take his advice and do my own research since this is my business and I am well qualified to do so. I drove by a home that I knew Ulverton Enterprises had built and researched the address. On page 1, it shows this property on 144th Pl was owned by the Village of Orland Park and was sold in 2012. I question why this property was not shown on the spreadsheet of ALL properties purchased and sold by Orland Park in the prior 30 years. Let me say this again, this property was NOT shown in the spreadsheet of all properties purchased or sold by Orland Park. This property was not shown in a public real estate database of sold properties that were on the OPEN market. Page 2 and 3 shows this property was donated to the Village, along with 2 other parcels from the estate of one of Orland Park founding fathers, John Humphrey. The 2 other parcels are the Humphrey Home located on 144th Place. As I drove down Beacon Avenue, I noticed a small for sale sign on a vacant lot by the same builder, Ulverton Enterprises. I did some research on this property and here is where it gets very interesting. Page 4 shows the history of this propertyin 2011 the owner received an approval from the Village for a high density lot with little parking which seemed very strange (with such limited parking where were the occupants going to park…across the street at the Orland Park museum/Old police station?) in December 2015 the property was purchased and placed into a trust called Chicago Trust CoPage 5 shows the attorney representing the buyer in 2015 was former Trustee Mike Carroll. Ownership according to the Cook County Recorder of Deeds has NOT changed. I decided to check the tax records. On page 6-8 shows the owner who has been receiving the tax bills and presumably paying taxes since 2016 is Former Mayor Daniel McLaughlin. Additionally, on page 9 shows the P.O Box on the tax bill is the same one used for his political campaign, Citizens for Dan McLaughlin. Furthermore, I asked the Village Manager for any permits on 14332 Beacon, I found the following:Page 10 shows that in March of 2016 a permit to demolish the house on the property was obtained and clearly lists former Mayor Dan McLaughlin as the ownerPage 11-14 shows that in March of 2017, while Dan McLaughlin was still Mayor, a new plan for the property went to the planning commission with Ulverton Enterprises/John Kelly as owner of the property. This is the same Ulverton in the other secret insider dealsThe planning commission unanimously approved. This also shows that in March of 2017 while Dan McLaughlin was still Mayor, the property went to the Development Services Committee and was approved unanimously including votes by current trustees Fenton and Caliendriello. Again Ulverton/Kelly was listed as the builder and the owner. Page 15-16 show that this was tabled by Trustee Fenton and Trustee Gira at the April 2 2017 board meeting. Listening to the audio of this meeting, former Mayor McLaughlin can be heard specifically asking Trustee Fenton if she “was going to table” the item. This election for Mayor was the next day. The project did not go to the full board until June 2017. By this time we had a new Mayor and the vote was unanimous. Again Ulverton/Kelly was listed as the builder and the owner. Page 17 shows that in 2019 Ulverton/Kelly applied for a building permit which was received but construction has not yet started. The fact that John Kelly was listed as the owner on these documents demonstrates an effort to hide ownership on yet another secret insider deal. This appears to indicate the zoning and permit was applied for by someone other than the actual owner.It also indicates that Trustee Mike Carroll voted on a property that his client owned and he represented the buyer on the purchase. Former Trustee Carroll apparently was also in on this secret insider deal. If this is the case, it clearly is a conflict of interest and ethics violation with legal ramifications on several fronts. Based on the public records reflecting no change in ownership since December of 2015, it seems pretty clear to me that former Mayor Dan McLaughlin was hiding his ownership on the Beacon Avenue property while going for zoning and permits in front of our plan commission and Development Service Committee while he was still Mayor. To verify that this was not just an oversight, I checked former Mayor McLaughlin’s Statement of Economic Interest Statement because this property would legally have to be disclosed. (All elected officials and candidates for office are required by law to complete this annual form detailing any financial interest/ownership interest in accordance with law allowing full transparency to the general public.) Pages 18-20 show former Mayor McLaughlin’s two statements of economic interest for 2017 and pages 21-22 show candidates’ statement of economic interest from this year. All of these statements claim n/a to question number 5 that reads: List any entity and the nature if the governmental action requested by any entity which has applied to a local unit of government in relation to which the person must file any license, franchise permit for annexation, zoning or rezoning of real estate during the preceding calendar year if ownership interest of the person filing is in excess of $5,000 fair market value at the time of the filing or if income or dividends were received by the person filing from the entity during the preceding calendar year Fines for falsely completing a Statement of Economic Interest range from a class a misdemeanor which can include fines and imprisonment I want to remind everyone that this started with an offer in December of 2020 on a piece of property on Westwood from the same builder that filed a seemingly false permit application for the property seemingly owned by the former Mayor. Additionally the lot next door to this vacant lot was sold to the former Mayor’s neighbor and built by this same builder with significant concessions. I have found no evidence that proves that these Village owned properties were made available to the general public or offered in the open market. Real estate 101 tells you the highest and best sale price comes when a property is offered and fully exposed to the open market, not a select few. The Village is required to auction items owned that are no longer needed or declared surplus. The Village has auctioned off used wheelbarrows and old file cabinets in the open market to the highest bidder as required by law. We have full transparency and exposure to the open market on these $100 items but yet on properties worth thousands of dollars these documents indicate secret insider deals. This is not how real estate and taxpayer assets should be sold.. I question what else has been sold by the Village that we are not aware of? Are there any other secret insider deals? These actions disgust me and violates the public trust, the trust of the planning commission, the trust of the entire board of trustees and begs further investigation MAYOR PEKAU’S CLOSING COMMENTS Lastly, here are my closing comments from the meeting: First, I am glad that we put together an ethics commission that developed an ethics ordinance that would prevent or punish this type of behavior. This should never, ever happen again. Thankfully, the taxpayers of Orland Park are protected from this in the future. All of this is very disturbing on a number of fronts: 1. We have a permit approved for a multi-use building that was obtained by somebody other than the owner. Our head of Development Services is going to confirm with Mr. McLaughlin that he did in fact approve this application.We also clearly have a problem with the process that would allow this to happen. We need to clean up our development services process so that anything that goes to the planning commission, or any permit on a vacant lot, must be signed off on by the actual owner and we need to confirm ownership.2. We also had a number of problems with our property purchase and sale process that need to be cleaned up. For instance, we should:Not be paying over appraised value for a property and should not allow multiple appraisals to raise the price of the property.Any offer we receive for a property that is not on the market, should require a public notice period where people could comment, or place another offer and the offers should be on the record.We should not purchase any property for a “future project” unless that project has been engineered and is in place. These determinations were done after we did the remediation work, in what world does that make sense? For example, it is currently part of our Phase II engineering process to do this. But that is done after Phase 1 not before Phase 1 Engineering. 3. There were serious issues that need to be addressed. I think we could do this in house, but obviously this is a very sensitive matter and the Village is better served with an independent look at these matters. George, for the next meeting I would like at least three proposals from independent law firms to investigate these issues. The deliverables should include:Identify rules or village ordinances, practices and/or procedures were not followedIdentify any potential criminal actions for which a complaint should be filed.Identify all village property transactions, since clearly at least one was missed. It looks like we need to go back to 1987 to capture John Humphrey donations – since it didn’t showSummarize actions taken between acquisition and sale of each of the propertiesRecommend procedural changes to ensure complete transparency moving forward.Recommend procedural changes to ensure best practices are followed for property acquisitions and salesWe will vote on moving forward with this investigation at the next meeting and any procedural changes as they are brought before us. There is no place for secret insider deals. I have and will continue to make every effort to keep us moving forward. However, the public trust appears to have been violated and the people deserve to know the truth behind all of this. |
