Wednesday, June 28, 2006


Special Report:The Kim/Sargon Connection


What Happened to The Beachview Development Project?

In November of 2006, The Chicago Plan Commission approved Beachview Development’s plan to demolish the existing one story building at 7630-40 North Sheridan Road and build a 6 story condominium.( here's the link from Skyscraper City. scroll down to see story ) The masonry building would have approximately 1800 sq. ft. of ground floor retail storefronts, 40 one and two bedroom condominiums with 4 CPAN units set aside for affordable housing and 2 levels of underground parking. The Plan Commission approval came after a review process initiated by Alderman Moore’s office and subsequent community approval and it seemed as though the project was moving forward as planned.

Meanwhile, Twin Realty who is the principal investor in the Beachview Development project, had approached Parkway Bank for financing after reaching a deal to buy the property from the owner, Bong Kim. Mr. Kim received approximately $175k as a down payment and Beachview Development also assumed the mortgage payments for the property until the financing was complete. Again, everything seemed on track.

But things started going awry in July. Bong Kim and his wife were apparently having marital and financial problems and she decided to abscond with the 175k down payment. According to the people involved and even though he had a binding contract with Beachview Development, Bong Kim then decided to sell the 7630-40 North Sheridan property….. again.

In July, Beachview received notice from Parkway Bank that they no longer needed to send the agreed upon mortgage payments since the note on the property had been paid. Then, the owner of Beachview Liquors, who is a minority owner in the condo development, got a most unwelcome and surprising visit from his new landlord, Peter Sargon. Even though Mr. Sargon was not a known investor in Beachview Development who had just signed a new lease with the liquor store, he demanded that all rent payments were now payable to him, since he was now the owner of record since his name appeared on the title. Realizing that something wasn’t quite right and on the advice of council, the Beachview Liquor owner refused and immediately got slapped with a five eviction notice for non payment.

Well, if this is a little confusing to you, imagine how all the people who were at the other end of all these shocking developments felt. Imagine getting a notice from your bank telling you that someone else now owned your property. Imagine being a responsible businessperson in the same location for 24 years and suddenly being told, by the supposed new owner, to vacate in five days. Imagine then going to court and being told by an unsympathetic judge that you would have to post an eviction bond equal to one years’ rent or about 70k until the case was decided. And imagine every time you went to court, both Peter and Isaac Sargon were sitting in the courtroom hissing and threatening that the sheriffs were coming that day to throw you out on the street.

Think about the confusion at the bank and in the offices of Beachview Development and everyone else who thought this deal was signed, sealed and delivered. Thousands of dollars have been spent on architectural fees, permit fees and legal costs in anticipation of this project going forward and in an instant; everything came to a sickening, screeching halt.

Why? Because Sargon Isaac obtained the title to 7630-40 North Sheridan Road from Bong Kim under fraudulent circumstances, according to court documents and what insiders are saying. And now the whole development is in court and in limbo. Mr. Kim has fled to California. Peter, Sargon Isaac’s son, who’s name appears on the title to 7630 - 40 N. Sheridan Road and who also owns the 7626 North Sheridan Road building ( Biddy Mulligan’s ) right next door, has leased the space to Island Groove Café and the new owners are requesting a liquor license for the restaurant.

Land Banking


A quick look at Sargon Isaac’s property ownership on that corner offers some clues as to why he would want the liquor store evicted since that store is the only business left in the 7630-40 North Sheridan Road building. The Sargon’s also own 7650-54 North Sheridan,( yellow building ) and 7644 North Sheridan) Biddy Mulligan’s ) which is adjacent to the liquor store. If Sargon was successful in his eviction proceedings, that would give him control of three contiguous parcels on Sheridan Road. And the only building standing in the way of Sargon owning 5 parcels, is the small red brick 2 flat located at 7628 North Rogers since Sargon also owns 7626 North Rogers ( behind the trees ).














7626 North Rogers, owned by Sargon
(to the left behind trees )
and 7628 North Rogers ( red building )















7644 North Sheridan Road, owned by Sargon (center )
and 7630-40 North Sheridan Road (corner on left )















7650-54 North Sheridan Road
(owned by Sargon )

At the moment, the case against the Sargon’s has been moved to Appellate Court and there is no timetable being given for a conclusion. Approximately 45k has been spent so far on legal fees by Beachview Development and Beachview Liquors to gain their rightful ownership back from the Sargon’s. It is unclear whether the new owners of Island Groove Café are aware of these proceedings. I have never met them or spoken with them.

But neighbors in the surrounding community are well aware of what is transpiring and are not happy with the Beachview project setback or the request for the liquor license for a building that is owned by Sargon. Mention the Sargon name in this part of Rogers Park and you hear some very upset neighbors doing a little hissing of their own and plenty of horror stories; nothing surprises people when it comes to the Sargon’s.

It is well known in the community that Sargon’s building at 7650- 54 North Sheridan, which is adjacent to Island Groove Café, is not well managed, apartments are rented without proper screening and there is constant activity in and out of the building at all hours of the day and night. Yesterday, I was able to walk into the courtyard through the unlocked and open front door. Security for this building is non existent.

I spoke with a person who told of a 4 year court battle with Sargon Isaac and a small condominium building where he bought 2 units and rented to questionable people without leases, didn’t pay any special assessments so no improvements could move forward and his tenants caused numerous disturbances that required calling the police. Apparently, prior to the Sargon involvement, that building was quiet and peaceful and had never been visited by the police. Some people believe Sargon was trying to gain control of the building by moving in disruptive tenants. Today, after 4 years of headaches and legal expenses, a judge has finally ordered Sargon to relinquish control of the 2 units.

A Few Questions To Consider


1. If the security measures that the new owners promise do not work and the gang activity that is starting to take shape just out of view of the Howard Street camera on Sheridan continues, what recourse does the community have at that point? How will it affect sales of the new condominiums?
2. How will late night music and lack of parking for the patrons of the Café, affect the quality of life for established residents of the neighborhood and new condominium owners.
3. Is it fair or wise to grant a liquor license to a member of our community who has not demonstrated a cooperative attitude and who encourages and engages in questionable activity in his buildings and his business dealings?

There have been some dramatic improvements in the area just west of this corner of Sheridan and Rogers since last year and I think we’ve taken a few steps forward. Since installation of the police camera on Howard Street, the undercover sting operation, the crackdown by the police on loitering and the new management of The Broadmoor by Urban Equities, there is a considerable improvement in the quality of life and street safety in this area. But out of range of the new camera, a criminal element is starting to emerge on the corner of Sheridan and Rogers and area residents and store owners are starting to get worried.

As much as I would like to see an adult oriented, jazz club there, it seems counter intuitive at this time and with this owner and I think granting this liquor license will move our neighborhood more than a few steps backward. There are many in the community who feel the same way. I have nothing against the new owners; I will personally support the new restaurant and applaud them for their courage, investment and vision. But the history of Billy Mulligan’s should tell us that the issues that were problematic then are still a problem. Nothing has changed very much except the owner, Sargon Isaac. Most neighbors I spoke with believe granting a liquor license at this location to the owner of this property with his history of irresponsible behavior in our community is the wrong idea and I agree.

Gary Fuschi

16 Comments:

Blogger Hugh said...

Thanks for a very thorough report!

The project went before the Plan Commission 6/16/05 becuse it is inside the Lakefront Protection Ordinance area. Here is a link to the Plan Commission minutes:

Chicago Plan Commission Minutes June 16, 2005

Excerpt:

A proposed Residential Planned Development and Lake Michigan and Chicago Lakefront Protection application submitted by Beachview Development, Inc. for the property commonly known as 7640 North Sheridan Road. The applicant has proposed to construct 40 dwelling units and on-site garage parking. (49th Ward)

(Approved 7-0)

( Yeas-Commissioners Holleb, Migala, Nelson, Casalino, Stone, Mahajan and Searl)

Comment

The project was approved unanimously, as were all 15 projects within the Lakefront Protection Ordinance at the same meeting. (Voting for included Ald. Stone and Denise Casalino, who shortly after her vote resigned as Commissioner of Planning and Development in a scandal involving favorable treatment for her develoepr husband.)

You have documented a key event in the history of Chicago's and Rogers Park's lakefront. The impact of this project on the lakefront did not receive the same public scrutiny as other recent projects such as Abel's Legacy and Loyola's Book-less Library.

This project at 7600 N Sheridan will be remembered as a turning point in the dismantling of the Lakefront Protection Ordinance in Rogers Park. The batch of 15 projects approved at the same time will be remembered as the openning up of our Lakefront to unfettered development. A public review process has been co-opted into yet another rubber stamp process. The Plan Commission is now merely another minor bump in the road for our elected officials and the real estate develoeprs who sponsor them.

8:23 AM  
Blogger Hugh said...

Skokians for Moore

Although they live in Skokie, Sargon and his wife Hilda are regular Moore contributors.

Isaac, Sargon D. & Hilda
9420 Keeler St.
Skokie, IL 60076
PIN:10-15-210-047-0000

to Citizens for Joe Moore

$300.00 2/12/2001
$250.00 2/28/2000
$250.00 12/28/1999

I would like to take this opportunity thank the Isaacs of Skokie for their help in picking our aldermen in Chicago.

Source: Illinois State Board of Elections

10:33 AM  
Blogger Hugh said...

Floridians for Moore

From the Rogers Park Builders Group press release:

HOWARD STREET TO BE TRANSFORMED BY TWO NEW HOUSING PROJECTS

" ... a 40-unit development at 7640 N. Sheridan, a block north of Howard Street. According to Peter Tutera, President of Twin Realty Group, the developer, the 6-story project ... "

PETER S TUTERA is the President and agent for BEACHVIEW DEVELOPMENT, INC. according to the Illinois Secretary of State.

Tutera, Mary Ann
5780 Midnight Pass Rd
Bldg B #604
Sarasota, FL 34242

to Citizens for Joe Moore

$100.00 1/13/2005
$100.00 2/4/2005

Source: Illinois State Board of Elections

Analysis

Moore sold his legislative services to a developer and reported his cash payments as coming from Sarasota Florida. Moore doesn't like it when we connect the dots between his legislative agenda and financing his incumbency.

10:50 AM  
Blogger Hugh said...

Who is the Developer?

The minutes of the Plan Commission name Beachview Development, Inc. as the developer, but the press release on the web site of the Rogers Park Builders Group's website names Twin Realty Group, Inc. as the developer.

Twin Realty Group, Inc. was dissolved by the Illinois Secretary of State on 10/1/05. This usually indicates a failure to file their legally required annual report.

Source: Illinois Secretary of State

11:12 AM  
Blogger Hugh said...

Where are the disclosures?


The Tribune article ("40 condos planned on Sheridan in Rogers Park," Jeanette Almada, July 17, 2005) names Beachview Development, Inc. as the developer and says the development is a planned development, which requires City Council approval. Our City's ethics law require everyone requiring City Council action to file an "economic Disclosure Stetment" (EDS). Mayor Daley's executive orders require internet posting of the EDS.

No disclosures for Beachview Development or Twin Realty Group on our City's web site.

City of Chicago Vendor, Contract, and Payment Search

11:19 AM  
Blogger Hugh said...

The application for a Planned Development was introduced to the City Council by nonoe other than James J. Banks, the most successful lawyer in the history of Chicago, nephew to the Chairman Banks of the Committee on Zoning of the Chicago City Council, the official zoning attorney of Connie Abels, and a major Moore backer.

Here's a link:

Beachview Development, Inc., in care of Mr. James J . Banks -- to classify as a
Residential-Business Planned Development instead of a B3-5 Community Shopping
District


Jar-Jar's proposal was immediately refered to his Unc's committee.

12:02 PM  
Blogger Hugh said...

7/14/06 Less than a month after the Plan Commission found no Lakefront related issues, Jar-Jar's unnamed clients' planned development zipped through the Zoning Committee.

7/27/05 5 weeks after zipping passed the Plan Commission, Jar-Jar's planned development was approved by the full City Council, unanimously, of course, including Moore. Uncle Bill recused himself.

Reclassification Of Area Shown On Map Number 19-G.
(As Amended)
(Application Number 14899)

12:18 PM  
Blogger Hugh said...

The version of the planned development documents as included in the records of the City Council are very unusual in that the do not name the developer!

12:23 PM  
Blogger Hugh said...

The plan is pillar-to-post on the lot but includes a basment parking level. The site is a few hundred feet from the beach. A favorite recent trick of developers is to pitch basement parking to the community and then later discover it's way too expensive to keep it from flooding. Oh, well.

12:26 PM  
Blogger Hugh said...

Banks, Jim
221 N. La Salle
38th fl
Chicago, IL 60601

$250.00 3/1/2001 to Citizens for Joe Moore

Banks, Samuel - JJ's firm
221 N. LaSalle 38th Floor
Chicago, IL 60601

$250.00 7/18/2005 To Democratic Party of the 49th Ward
$500.00 2/25/2005
$500.00 2/23/2004

Banks & Co. are also major backers of Ald. Banks, Burke, and Natarus.

12:50 PM  
Blogger Hugh said...

8/1/05 A week AFTER the planned sails through the Plan Commission, Zoning Committee, and the full City Council, while running rough-shod over our City's disclsoure laws, a flurry of several year's worth of previous transactions were recorded against this property.

Cook County Recorder of Deeds PIN: 11-29-107-011

12/17/2004 Beachview Development Inc deeds the property over to a trust

7/8/05 The trust sells the property to Rogers I, LLC for $850K

7/8/05 Rogers I, LLC borrows $715K from Sargon Isaac secured by the property

Comments

This is one of the most messed-up title situations I have looked at.

There's nothing to sympathize with these developers. These asshols got what they deserved for sneaking around and being clever. Put this in your real estate notebook: record your transactions ASAP. And don't do naything you're not comfortable being in the public record.

On 4/6/05 James J. Banks applied for a planned development representing Beachview Development Inc as the owners when in fact they did not own the property at the time, they had transferred ownership 5 months earlier, but they kept the true ownership secret by holding off on recording the sale.

1:33 PM  
Blogger Hugh said...

As this planned development worked its way through City Hall, ruthless developers jockeyed for position. Treating the property as a planned development in effect exempts it from our zoning laws; the developers can do anything they can get the City to agree to, which is whatever the Alderman wants.

The pending approval of planned development promised to greatly enhanced the value of the property. The behind-the-scenes backstabbing is characteristic of these deals. Our City government facilitates such problems by skipping legal requirements for full disclosure of the actors. Our disclosure laws also require developers to immediately notify the City of any changes in ownership.

Another planned development project also put together by Moore was also famously plagued by intrigue. Aldermanic pal Rudy Mulder used fake title documents in an attempt to seize control of Gateway Mall as the deal drew toward closure.

3:30 PM  
Blogger gf said...

Hugh-

Sorry it took so long to respond but I was trying to get verification from the principals but unfortunately, it’s a holiday weekend. I will speculate a little based on what I know in addition to some of the research you provided.
although some of the other facts you provide might be true and i will agree with some, I will concentrate on the title mess and the people involved because these were the issues and the point of the article.

”This is one of the most messed-up title situations I have looked at.”

A full understanding of some of the details comes with knowing some of the people involved and cannot be fully portrayed by only online research. The fact that this title case is in court and has been transferred from housing division to the appellate court should tell you that there is something other than a “developer trying to circumvent the planned development system” conspiracy as you suggest. There is a conspiracy: bong kim fraudulently selling the title to isaac sargon after having agreed and accepting a deal with beachview: and that is the basis of the court case. It is partially explained by the transactions you presented and what I was told. The price paid to bong kim( $850k ) also matches the information I have.

“12/17/2004 Beachview Development Inc deeds the property over to a trust”

7/8/05 The trust sells the property to Rogers I, LLC for $850K

7/8/05 Rogers I, LLC borrows $715K from Sargon Isaac secured by the property

bong kim “quit claimed” the deed to beachview while beachview negotiated with parkway bank for financing. apparently during this period, for reasons that are unexplained because mr. kim refuses to answer questions after he fled to california, bong kim sold the property to isaac sargon. Unfortunately, it was no longer his property to sell.

“There's nothing to sympathize with these developers. These asshols got what they deserved for sneaking around and being clever”

Although I have spoken to peter tutera many times, I have not met him personally. I do know the owner of the small liquor store and his wife. they are responsible and well respected business owners and have a very good reputation with neighbors in this part of town and they are NOT as you describe them. They run a clean business, work hard and have been at that location for over 24 years. rogers park would benefit from having more responsible business owners like them.

“As this planned development worked its way through City Hall, ruthless developers jockeyed for position. Treating the property as a planned development in effect exempts it from our zoning laws; the developers can do anything they can get the City to agree to, which is whatever the Alderman wants.

The pending approval of planned development promised to greatly enhanced the value of the property. The behind-the-scenes backstabbing is characteristic of these deals. Our City government facilitates such problems by skipping legal requirements for full disclosure of the actors. Our disclosure laws also require developers to immediately notify the City of any changes in ownership.”

Hugh, while all of these issues might be true in other cases, there is no incentive for beachview liquors and the owner, who is a minority investor in the development, to intentionally try to deceive anyone, to be entangled in a court case, put up $70k as an eviction bond and essentially have his business and his life in limbo until this case is concluded and that is exactly what’s going on. Many neighbors in this area were in favor of that development and they are upset at the delay and sargon isaac for causing it. Most did not understand the facts behind the delay and that’s why I wrote the article.

While it’s anyone’s guess whether the below grade parking garage would have been built because of it’s proximity to the lake, it is my understanding that they fully intended to construct this building and the last scenario anyone wanted to see including the alderman, was for sargon Isaac to own this property. When this liquor application was first announced, joe immediately came out against it and that was detailed in a letter to a neighborhood resident a few months ago and posted on this blog. I’m not sure where he stands on the liquor license application now.

9:12 AM  
Blogger gf said...

hugh-

although i appreciate your comments and input, this blog has a zero tolerance policy towards personal attacks and name calling.

9:51 AM  
Blogger Rogers Park Taxpayer said...

Open letter to Zoning Commissioner

LEE STREET MANAGEMENT
7601 North Eastlake Terrace
Chicago, Illinois 60626
773-761-6000
leestreet.com

July 12, 2006

Re:
Application for Zoning Variance
7644 North Sheridan Drive
Case No. 270-06-S

Mr. Brian L. Crowe
Chairman
Zoning Board of Appeals
121 North LaSalle Street
Room 905
Chicago, Illinois 60602

Dear Mr. Crowe,

I am the owner of eleven (11) apartment buildings on Eastlake Terrace.

My company, Lee Street Management, is easily the largest property owner-manager in the immediate area. Our buildings contain 183 dwelling units and we manage over 350 tenants. All of our apartments are within 1000 feet of 7644 North Sheridan Road and would be directly affected by the proposed variance.

For your convenience, a spreadsheet of our holdings is attached to this letter.

Unfortunately, I am unable to attend the public hearing to be held Friday evening, July 21, 2006, as I will be out of the country on business. However, my sentiments on the matter are very strong and I wish by this letter, to have them considered and read into the record.

It is with great enthusiasm that I offer my wholehearted support for a zoning variance.

This project will bring a new vitality, diversity and culture to our neighborhood that is desperately needed. It will cure the blight we have endured at that location for nearly a decade. I have no doubt that all of my properties will be greatly enhanced by this wonderful new commercial entertainment venture.

I hope the Board will do what it can to consider my vote as though it were eleven separate votes, i.e, as if it were individual votes coming from eleven separate property owners.

Best Regards,

Michael Lee, President
Lee Street Management Co.

10:07 AM  
Blogger Rogers Park Taxpayer said...

For the record, I object to the "Anybody but Sargon" sentiment that seems to cloud the issue of development in our neighborhood. We cannot allow the personal sentiments of a few to stifle progress for the many. Michael Lee

10:11 AM  

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