Member Of 2016 Bid Team Has Development Deal For Major Lots

(WGN-AM)- A member of Mayor Richard Daley's team working to bring the Olympics to Chicago has quietly arranged to develop city-owned land near a park that would be transformed for the 2016 Summer Games, potentially positioning himself to cash in if the Games come here, a Tribune investigation has found.

Developer Michael Scott Sr., an early member of the mayor's Olympic committee, leads a group planning a residential and commercial project on lots kitty-corner from the proposed Douglas Park sporting venues, a location where land values could jump if the city gets the Olympics.

The plan -- which would include a Nike store -- already has gotten crucial support from the local alderman, who has set aside the lots for Scott and his group.

The city generally sells taxpayer-owned lots for $1 apiece for affordable housing projects, and in other cases negotiates land prices.

Scott owns Michael Scott & Associates, a real estate development and investment firm. He also serves as president of the Chicago Board of Education, and was in the news earlier this week when he said he was subpoenaed to testify before a federal grand jury looking into admissions to the city's elite public schools.

Scott's designs on the public land are sure to reinforce concerns of residents that it's the mayor's friends who would benefit from Daley bringing the 2016 Olympics to the city. The story is a familiar one in Daley's administration, where City Hall insiders have personally profited from even the most civic-minded of projects, from recycling garbage to building Millennium Park.

The development team includes six West Side ministers, some of whom are politically connected.

Scott, who acknowledged plans to develop the lots around Douglas Park, said he has done nothing improper and defended his roles as a member of Daley's Olympic committee, school board president and developer.

"I've had an interest in Douglas Park long before the Olympics came and will probably have an interest long after we get them or not," Scott said. "That's where I was raised, that's what I know, so if that's something that's punishable, I can't tell you that."

Scott got his start in politics as a housing activist in the West Side's Lawndale neighborhood, where he was born and raised. He has served under several mayors, including Harold Washington and Daley.

He was criticized in 1990 for his insider connections when he left his job as city government's chief cable administrator to go work for a cable company.

Earlier this year, Scott's roles as school board president and as a member of the city's Olympic committee stirred controversy.

In May, he asked all of the city's school principals to form plans to promote the Olympics. Teachers and union officials said Scott's tactics were heavy-handed and they feared retaliation if they did not support Daley's quest for the Games.

Daley first floated his vision of bringing the Olympics to Chicago in 2005 after previously dismissing the idea as too costly. He assembled an exploratory committee in mid-2006 that included Scott.

As Daley forged ahead with his plans, the exploratory team evolved into Chicago 2016, the committee spearheading the city's push for the Olympics.

When the committee unveiled its original ideas in summer 2006 for hosting the Olympics, Douglas Park did not figure in the plans, nor was the park part of revised plans unveiled months later.

By March 2007, however, Chicago 2016 announced it had again tweaked its plans. Among the changes, Douglas Park would play a role in the Olympics: The aquatics center would move from the University of Illinois at Chicago to the park.

Ald. Ed Smith (28th) said he had pressed the Olympic committee to put a venue on the city's West Side. He said he originally wanted an Olympic swimming pool to be built at Westinghouse High School in his ward. Smith said he had met with members of the Olympic committee, including bid chairman Patrick Ryan, but could not recall if Scott attended.

"I was adamant that we have Olympic activity on the West Side of Chicago. They came out and made the decision to use Douglas Park," Smith said. "I don't know who decided that."

Scott served as president of the Chicago Park District board in the 1990s, and his son is now an area parks manager.

The Chicago 2016 committee and Park District staff met several times to choose between Douglas and Garfield Parks as an Olympic site, a spokesman for the city's bid said. The spokesman said they decided on Douglas in part because it is closer to other downtown sporting venues.

A Park District spokeswoman said neither Scott nor his son had any role in the park's selection.

Organizers in December 2008 changed plans for Douglas Park, deciding to use it as the site for the indoor cycling facility or velodrome, and a temporary outdoor BMX cycling track.

After the Games, the velodrome would become a multiuse sports facility, the largest of its kind in the city. In addition, one of the pools from the Olympic aquatics center -- now planned for Washington Park on the South Side -- may permanently be moved to Douglas Park.

Scott and the ministers in December 2006 formed their company, WMC-I, Westside Ministers for Change. State records show Scott is the manager.

They shared their vision with the local alderman, Sharon Denise Dixon (24th), a former flight attendant and social worker elected to City Council in 2007.

In Chicago, aldermen have near total control over what gets developed in their wards. A developer who wants a project to get necessary City Hall approval must first visit the local alderman or risk having the project stymied. Aldermen can control or "hold" lots to block development or to allow development to proceed.

Dixon enthusiastically backed Scott's plans and promised to hold nearly 20 lots for development.

In a September 2007 letter to Scott with the subject line "Douglas Park Development," Dixon told Scott that his plans for possible "market rate and affordable" new homes on the city-owned lots was exciting and would continue to revitalize the neighborhood.

"It will also showcase this area of Chicago for the proposed 2016 Summer Olympics," she wrote. "Please feel free to use my endorsement of this project in any way that will continue to benefit balanced growth and development in the 24th Ward."

In a follow-up letter to Scott in May 2008, Dixon included the list of the lots and their addresses.

Both of Dixon's letters of support were sent to the Department of Community Development to inform city staff of her backing for Scott's project.

Dixon initially declined to talk about her endorsement of Scott's plans, referring questions to him and to City Hall. She called back later, saying the project actually would be developed by a group of West Side ministers.

Asked why none of the ministers' names were included in her letters of support for the project, Dixon replied, "That's a very good question. I'm not quite sure. This is not a Michael Scott project per se. It's not about Michael Scott. It's about the development and enhancement of the 24th Ward."

Scott and his team have yet to file any formal plans with the city to develop the lots, which are located in the 3100 block of West Roosevelt Road, the 1100 block of South Albany Avenue and the 3100 block of West Arthington Street.

Rev. Charles Robinson, a politically connected pastor and member of the Chicago Transit Authority board, said he and the five other ministers and their churches were involved. He said Scott will serve as "adviser and developer" in the for-profit project.

Scott said he was acting on the behalf of the ministers. When asked whether he stood to make money on the development, Scott said it would be speculative to say the venture would be profitable.

The team is negotiating to bring a Nike store to Roosevelt Road, near the potential Olympic venues, Robinson said. He said their early plans include a mix of commercial and residential, with stores at street level on Roosevelt Road and housing on the second and third floors.

Scott has experience developing land around the park. Years ago, he teamed up with developer Cecil Butler to build a gated community nearby called Albany Park Townhouses at Albany and Ogden Avenues on the western edge of the park. He also owns other land for development adjacent to the park.

"We started working out in the Lawndale community before there was interest," Scott said. "I've put my money in this community, and most people would never ever consider doing that."

The International Olympic Committee votes for a host city Oct. 2, choosing among Chicago, Madrid, Rio de Janeiro and Tokyo.

Real estate experts said land close to Olympic sporting venues would become more valuable, with the economic impact on land values tapering off the farther a property is from the venues.

"It's clear it is going to have a positive effect on the surrounding property values, and geographically, it will be highest for the closest units," said James Shilling, a DePaul University real estate professor.

If Chicago is not chosen, the lots -- in one of the city's poorest neighborhoods -- may not become more attractive for developers any time soon.

In June, as part of a series of meetings, Chicago 2016 and Park District officials met with residents at the Douglas Park Field House to get community feedback on what should be left behind in the park after the Olympics. In the audience were Dixon and Scott's son, Michael Scott Jr., who is the area manager for parks in the Austin and North Lawndale communities.

Michael Scott Jr. declined to comment for this story.

Scott Sr.'s role in potentially developing the city lots is especially sensitive given that he is a co-chair of a Chicago 2016 subcommittee that crafted an agreement ensuring jobs and contracts for minorities, as well as promising affordable housing to be a part of the Olympic Village agreement.

The agreement, approved by City Council in April, grew out of concerns from neighborhood groups that economic benefits from the Olympics would go mostly to politically connected insiders.

In addition to his Olympic committee role, Scott also is involved in the proposed Douglas Park sports venues through his position as president of the school board. Chicago 2016's velodrome plans call for tearing down the Collins High School campus' two gyms and indoor pool, a sensitive issue with many community residents who don't want the recently renovated facilities demolished.

Scott said that he was not on the school board when he become involved in the real estate project, and that his role with the Olympics at the time was minimal.

But Valerie Leonard, a member of the Lawndale Alliance neighborhood group, said she was concerned about Scott's various roles.

"I believe that everybody should have the opportunity to make money. I do believe in the American way," she said. "But I think it's problematic when you have insiders continuously getting access to information that most people don't have access to."

(The Chicago Tribune contributed to this story)

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