A blemish on Riverdale’s crown jewel?
BY CASEY TONER ctoner@southtownstar.com June 3, 2012 8:10PM
View of the boat slips at the Dixie Star Marina in Riverdale, Illinois, Monday, May 14, 2012. | Joseph P. Meier~Sun-Times Media
Wherever John Thomas goes, a trail of debt and lawsuits follows.
Mobile Mini Trailer claimed in a lawsuit filed in January that Thomas refused to return a trailer that was rented out for the marina property in January. The lawsuit claims Thomas and his attorney stopped the company from retrieving its trailer by removing its hitch, parking a forklift against the hitch end of the trailer, and calling police to the property. The company is seeking the cost of the trailer — $45,000 — from Thomas and others associated with the marina, according to the lawsuit.
Chicago law firm Belongia, Shapiro and Franklin filed a lawsuit in Cook County in March 2012 alleging that Thomas owes the firm about $107,000 in unpaid legal bills dating to May 2008.
In February 2012, Cook County Judge John C. Griffin ordered Thomas to pay the Wawak family and JMC Holdings LLC $1.3 million in unpaid loans dating to 2006.
Thomas also agreed to pay about $203,000 to Republic Bankcorp in November 2010 due to an unpaid loan Thomas took out in April 2008.
A St. Louis County, Mo., judge ordered Thomas, and another marina partner, Michael Griffith, to pay about $34,300 in unpaid legal fees to Missouri law firm Helfrey, Neiers, and Jones in June 2011. They were also ordered to pay about $49,000 in legal fees on behalf of First Bank by another St. Louis County judge in June 2010.
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Updated: July 6, 2012 9:33PM
Riverdale leaders embarked on a plan this year to restore the jewel of the Little Calumet River and in turn gave $900,000 in taxpayer money to a company whose managing partner is a convicted felon who wore a wire in the Tony Rezko case.
The payouts, which came from a special taxing district to help restore blighted properties, were supposed to subsidize a $5.5 million investment into the city’s 80,000-square-foot marina, which includes a restaurant, docks and a gigantic boat warehouse. But exactly how much the owners put into the project has been called into question, according to memos obtained by the SouthtownStar.
And, companies and firms that were hired as part of the marina’s redevelopment — including the firm that set up the deal — are claiming they’re still owed about $180,000.
Mayor Deyon Dean, who held a campaign fundraiser at The Dixie Star marina restaurant on May 21, cut village checks totaling $300,000 to the marina company just days after village attorney Mark Sterk warned against giving any more money to the troubled project.
Now, the taxpayer money is unaccounted for, and questions are swirling about the company’s bookkeeping, the property’s back taxes, and why taxpayer money was spent on things such as televisions, furniture, employee uniforms and appliances.
The village board — at its attorney’s behest — is hiring a firm to audit the company’s books.
“It reeks of something unethical,” village board member Lawrence Jackson said of the deal. “You know, it makes me embarrassed to be an elected official in Riverdale.”
New management
Attorney Anthony Bass, who represents the marina owners, describes the new management as a group who came in and salvaged what had become a dilapidated nest of gangbangers, drug dealers and prostitutes.
Elmhurt resident Gary DeClark, the marina’s former owner, declared bankruptcy in June 2011, claiming he owed $11.7 million; more than $9 million of the debt was marina-related.
Convicted felon Louis Giordano had been running the marina’s restaurant, Captain’s Quarters, since 2009 while he awaited sentencing on a 2004 fraud conviction. Giordano and partner-in-crime John Thomas, formerly Bernard Barton, pled guilty to fraud charges after the two ran a billboard-leasing business in Manhattan, N.Y., in the 1990s.
Giordano gave his girlfriend control of his business affairs — including the restaurant — when he went to prison in June 2011.
Thomas was sentenced in June 2010 to three years’ probation and a $6,000 fine for a felony fraud conviction stemming from the same case — his reward for helping investigators build a record of former Gov. Rod Blagojevich’s repeat visits to Rezko’s office.
While he awaited sentencing, Thomas was involved in two businesses that eventually declared bankruptcy — Carnegie Realty Partners and a separate real estate venture in Florida. He helped create a new company, Nosmo Kings LLC, which bought the marina in August 2011 from Dearborn Street Holdings LLC-Series 7 Nighthawk, which had acquired the property from Harris Bank.
A little more than two weeks later, Robert “Juice” Jones — a 35-year-old disc jockey at the bar inside the Captain’s Quarters restaurant — was shot to death in the marina’s parking lot.
Bass, who began representing Nosmo Kings this spring, said that Thomas is a “manager with an interest in the property.” He would not identify other partners in the project, but defended Thomas.
“Some of us have different histories than others,” Bass said. “That doesn’t make us bad people.”
Thomas wasn’t alone in his investment, however. Robert Bobb, a former federal prosecutor and friend of former Chicago Mayor Richard M. Daley, gave Nosmo Kings $200,000, records show. Bobb is the chairman of Cardinal Growth, an investment fund the federal government took over last June because it owes taxpayers $21.4 million.
Problems arise
Thomas courted the Riverdale village board in February and sold his vision to any doubters. He mentioned Jones’ murder, and made a passionate promise to the village’s citizens that no crime would occur under his watch.
“I come here from Chicago and I am who I am, but this is my life,” Thomas said, choking up. “I have a 5-year-old daughter and I want my daughter to come here. I want my family to come here.”
The project was estimated at $5.5 million — the amount Thomas’ group promised to invest in the property in order to get $1.2 million in TIF money. The marina is located in a special taxing district that allows municipalities to give money to investors who build up blighted areas.
Gruen Gruen and Associates, the company the village had evaluate the project, cautioned Riverdale officials against the project based in part on the developer’s history. Aaron N. Gruen, an analyst, wrote in a memo that Thomas’ company, which had no experience operating or developing marinas, had no proof the marina could make money.
Nevertheless, Riverdale officials ignored Gruen’s advice and signed the deal with Nosmo Kings on Feb. 7. Three days later the village gave the company the first of two $300,000-payments that would be doled out that month.
In March, according to memos obtained by the SouthtownStar, Sterk, the village attorney, began questioning the payments.
Sterk wrote in a March 13 memo — just more than a month after the deal was signed — that some invoices Nosmo Kings submitted contained no explanation for the work, were incomplete or had no proof the purchases were made for the arena, such as thousands of dollars in unexplained invoices from Menards and The Home Depot.
Sterk added that “television sets, furniture and appliances,” are not TIF-eligible expenses, and that he could not find any documents indicating the water and sewer lines were completed.
Documents also show Nosmo Kings listed TIF-eligible expenses totaling $6,750 billed to STH Media — the public relations company belonging to Dean’s former campaign manager, Sean Howard, once a spokesman of former Cook County Board President Todd Stroger.
Ten days after Sterk recommended the village give no more money to Thomas’ company, Dean ignored the advice and signed a village check to Nosmo Kings for $200,000 on March 23. He signed another check for Nosmo Kings on April 4 for an additional $100,000.
Dean declined to comment for the story, saying he “wasn’t comfortable to go into detail,” because of the village’s investigation.
Bass downplayed the situation and said it should be resolved “within the next week or so.”
Still, businesses hired to work at the marina also have filed grievances against Nosmo Kings. Fox Valley Fire and Safety, of Elgin, and Gallas Construction, of Lockport, claimed in May that Nosmo Kings never paid them $64,000 for work they did, according to records filed at the Cook County Recorder of Deeds.
Scott D. Florez, of Low Voltage Installation Service, also wrote a letter to the Riverdale attorney in May saying he is owed about $12,000 for unpaid work at the marina and restaurant. The three checks Nosmo Kings gave him bounced, he said.
Chicago-based firm Polsky and Associates, the firm that orchestrated the TIF deal, is suing Nosmo Kings claiming the firm is still owed $107,000.
“I’m sure they’ll get paid,” Bass said.
Sterk wrote a letter to Nosmo Kings at the end of May saying the village plans to inspect the company’s records. The effort is the village’s first step in taking legal action against the company.
Bass brushed it aside.
“It’s an election cycle, and they’re doing what they normally do,” Bass said. “Unfortunately, it doesn’t do much for the people who live there.”
