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The Real Estate King of the Chicago City Council 

Brand-new 26th Ward alderman Roberto Maldonado owns more properties than any other council rep—including ten in his own ward. That's a lot of potential conflicts of interest.

In May residents of the 1700 block of North Monticello noticed that a sign had been posted on the fence around two overgrown, long-vacant lots on their street. It announced that the owner of the property was applying for a zoning change to build a pair of four-story, ten-unit buildings there and on two adjacent lots to the east, facing North Central Park.

It was jarring news to the residents, since apart from the empty lots the block is made up of modest single-family houses and two-flats, and they hadn't heard about any plans for a new development. On top of that, the property owner seeking the zoning change was Roberto Maldonado—their Cook County commissioner and the Democratic committeeman for the 26th Ward, which includes their block and much of the rest of Humboldt Park.

Several residents went door to door with a petition against the zoning change, and after getting about 100 signatures they contacted Maldonado's attorney and arranged for a meeting to air their concerns. Maldonado says that they were worried he was undertaking an affordable housing development and that he assured them he wasn't. But he didn't agree to drop his plan for high-density buildings.

click to enlarge Daley announcing Maldonado’s aldermanic appointment in July - BROOKE COLLINS/CITY OF CHICAGO
  • Daley announcing Maldonado’s aldermanic appointment in July
  • Brooke Collins/City of Chicago

And that was hardly the end of the matter. In July, after Billy Ocasio resigned to go to work for Governor Pat Quinn, Mayor Daley announced that he was naming Maldonado the 26th Ward's new alderman. This set off alarms with the residents of the 1700 block of North Monticello. Since aldermen generally have final say over land-use matters in their wards, Maldonado's appointment meant that he was now the person he would have to go through to enact the zoning change he wanted. The residents began gearing up to fight the proposal when it came before the City Council's zoning committee.

Maldonado says it won't. "I am not going to pursue the zoning change now that I have become the alderman of the 26th Ward," he told us last week. "I had the support of the previous alderman. . . . But it just so happened that the next alderman was me—and that changed things." Instead, Maldonado said, "At some point I will sell those lots."

He added: "I'm not sure you have much of a story."

Not so fast, alderman. The lots on Monticello and Central Park make up just a small portion of the new council member's real estate holdings. Property records and the financial disclosure statement Maldonado recently filed with the city clerk show that he owns at least ten pieces of property in the 26th Ward. They include three lots on the 1700 block of North Troy Street where he's building a sprawling new house and a building on Division that houses a mortgage business he owns.

He also owns or co-owns at least six other properties in other wards, including a South Loop condo worth more than $700,000 and at least five lots on the west and far south sides. That's a total of 16 properties.

No other member of the council owns close to that much real estate, according to financial disclosure statements. One alderman, the 44th Ward's Tom Tunney, owns 11 properties, though all but his home are units in two adjacent buildings he owns on Belmont. Four others (George Cardenas, Latasha Thomas, Walter Burnett, and Patrick O'Connor) own four, and six others (Michelle Harris, Ed Burke, Willie Cochran, Richard Mell, William Banks, and Joe Moore) own two. The remaining 38 aldermen don't own any properties that they don't live in.

Maldonado acquired many of his holdings for modest sums after their previous owners stopped paying taxes. In several cases—such as with the Monticello and Central Park lots—he sat on them for years as their values soared. And in one instance he cut a land-swap deal with Bickerdike Redevelopment Corporation, which has received both accolades and intense criticism as one of the ward's leading developers of affordable housing.

On several occasions Maldonado has fallen behind on property taxes or other bills himself: in 2002 a contractor put a lien on his Division Street office building, alleging that he had only paid about half of an $11,900 bill for roofing work several years earlier. Earlier this year Maldonado missed a tax payment on the property and as of August 18 owed $3,941, according to the Cook County treasurer. The condo association at 910 S. Michigan, where Maldonado and a business partner purchased a unit in 2004, placed liens on that property in 2005 and again in 2008 for thousands of dollars in unpaid fees.

This past June he took out a $960,000 loan on all nine of his properties on Troy, Central Park, and Monticello. According to a spokeswoman, Maldonado is using the funds to finish building his new house.

There are good reasons not many aldermen deal seriously in real estate—or at least wait till they're out of office. Zoning-change requests are ratified by the full City Council, but the council almost always follows the lead of the local alderman. Some, like the Fourth Ward's Toni Preckwinkle and the 47th Ward's Eugene Schulter, are careful to set up specific ground rules for reviewing zoning requests from developers. The requests are farmed out to a zoning committee, which holds a public hearing in the ward. The alderman then acts as something of a referee, smoothing over differences between residents and developers before deciding whether to advance the proposal to the full council.

But others have not been so rigorous. There are numerous examples of council members who've been busted for taking bribes from developers in return for zoning changes, including Arenda Troutman, the former 20th Ward alderman who went to prison earlier this year. But the classic example of an alderman-developer gone wrong has to be Thomas Keane, a fierce ally of Mayor Richard J. Daley who chaired the council's powerful finance committee from 1958 until 1974, when he was imprisoned for fraud.

"Keane—one of Chicago's most influential political figures—and two of his friends formed a partnership that acquired more than 1,800 parcels of land," a federal judge wrote in summing up the case. "The partnership acquired the land from the City at property-tax-delinquency auctions; it held the land through an Illinois land trust, a device that permits beneficial owners of land to conceal their interests." After using his position as finance committee chairman to get possession of the properties, "Keane then induced his friends in public agencies to buy these parcels."

Maldonado notes that he's been involved in real estate since long before he became an elected official. "I came to Chicago back in 1979, and in 1982 I made my first real estate investment," he says. "I liked it, and I've done fairly well with it over the years."

He says he's planning to curtail his real estate ventures now that he's become alderman. "I would never do anything that would put myself in a conflict of interest," he says. "And obviously these properties I owned before I got appointed to the office. I have no future plans to continue to buy property."

But Maldonado still hopes to sell the lots he already owns on Monticello and Central Park and in other neighborhoods. "At some point I'm going to sell those properties. I'm not going to develop them—I've never done any development. Then whoever buys them will have to go through the [zoning] process if they want, and when it comes up I will recuse myself."

As of August 18, the four lots on Monticello and Central Park were listed on local realty sites for $649,900 altogether. Maldonado's property at 1733 N. Troy had a for sale by owner sign in front of it last week, and four lots he owns on the south and west sides were listed for $39,000 apiece.

Maldonado has been a player in Humboldt Park politics since the early 1980s, when he was part of the first wave of Puerto Rican independents rebelling against the Democratic machine and aligning themselves with Mayor Harold Washington.

In 1988 the Sun-Times alleged that he had solicited campaign contributions on behalf of then-alderman Luis Gutierrez, his former brother-in-law and boss, while working as the top purchasing official for the Mayor's Office of Training and Education. Eight individuals and firms that made campaign loans to Gutierrez received a total of $800,000 in business from Maldonado's agency from 1986 to 1988.

One of them was Bickerdike. "Maldonado arranged for the lease of office and storage space from the Bickerdike Redevelopment Corp., a not-for-profit housing organization whose executive director was Gutierrez's chief fund-raiser," wrote Mark Brown and Deborah Nelson. "Bickerdike has received more than $70,000 in rent payments over the past three years as one of the Office of Training and Education's year-round satellite offices."

Maldonado and Gutierrez denied any wrongdoing, but Maldonado resigned from his city job soon after and started his mortgage business.

In 1994, with Gutierrez's backing, he was elected to the Cook County Board; he was reelected three times. As a commissioner he rarely bucked the lead of board president John Stroger or his successor and son, Todd.

In 2000 Maldonado was elected Democratic committeeman of the 26th Ward, thanks to some clever machinations by Gutierrez and 33rd Ward alderman Richard Mell.

A year earlier Maldonado had moved into the neighboring 35th Ward and made it clear that he was going to challenge alderman Vilma Colom, a Mell protege, for the committeeman's job there. To protect Colom's incumbency, Mell and Gutierrez struck a deal. As Gutierrez would explain in a 2002 Reader article, he agreed to back Colom, and Maldonado moved back to the 26th Ward. Ocasio stayed on as 26th Ward alderman but stepped down as committeeman, and Maldonado ran for the job unopposed. (Three years later Colom was swept from office by Rey Colón, so the Gutierrez deal only ended up delaying her ouster.) He's been committeeman ever since.

This past May Ocasio stepped down as 26th Ward alderman to work as a $120,000-a-year senior adviser to Governor Quinn. Under city law the mayor gets to fill aldermanic vacancies, but by City Council custom he usually follows the recommendation of the outgoing alderman; Ocasio himself had been appointed alderman in 1993 at the behest of Gutierrez when he moved on to Congress. After resigning this spring, Ocasio recommended Wilfredo De Jesús, pastor of the 4,000-member New Life Covenant Ministries, but the suggestion ignited an outburst from gay activists who objected to the minister's characterization of homosexuality as a sin.

Eventually Ocasio withdrew the recommendation, saying it was because De Jesús didn't live in the 26th Ward. He then asked the mayor to select his wife, Veronica, an aide to Gutierrez. But on July 27, Daley announced he was choosing Maldonado instead.

This plot twist set up a classic press-conference exchange where Daley got to unleash his inner Shakespeare. When reporters asked why he didn't appoint Veronica Ocasio, the mayor replied, "It's not, 'Why not his wife?' Why did I pick Roberto Maldonado? That is the question. And I picked him because of experience, his commitment, his working with people, his private sector as well as public sector. It's a combination."

Of course, that private-sector experience consists largely of real estate wheeling and dealing, much of it in the ward he now represents.

.In 1993, according to property records, he took out a $100,000 mortgage to buy a house on a double lot at 1731 N. Troy that just a few years earlier had been in the hands of the Cook County sheriff because the owners hadn't paid taxes. Maldonado still lives there.

Over the next few years he began acquiring other property on the block at bargain-basement prices. In 1994 he bought a lot a few doors south of his home for about $11,000; three years later he acquired a vacant, tax delinquent lot a few doors north.

In 1998 he put in a bid for a city-owned, tax delinquent lot at 1733 N. Troy, right next to his house. Bickerdike acquired it instead. But on October 20, 2004, he bought it from them for $25,000, and on the same day sold Bickerdike his lot at 1739 N. Troy for the same price. This swap left Maldonado with all five lots from 1723 to 1733 N. Troy. The next year he began building a vaguely Prairie-style McMansion on three of those lots; it's still under construction.

Maldonado says he traded with Bickerdike simply to increase the amount of land around his home. "The properties were of equal value," he said. "It was going to be part of our estate. I was never going to develop it."

Sometime in the 1990s (the date is unclear in property records) he purchased the building that houses his mortgage business, People's Choice Mortgage Corporation, at 2548 W. Division. In 2004 he and a partner, attorney Carlos A. Vazquez, took out a pair of mortgages worth about $720,000 total to purchase a condo at 910 S. Michigan. Recently—the transactions haven't even been filed with the county recorder of deeds yet, but they're listed on Maldonado's financial disclosure statement—the two have bought up five long-vacant lots in Englewood, Garfield Park, and West Pullman.

click to enlarge Maldonado’s vacant lots at 1755-1757 N. Monticello - MICK DUMKE
  • Maldonado’s vacant lots at 1755-1757 N. Monticello
  • Mick Dumke

And then there are the properties at 1755-1757 N. Monticello and 1754-1758 N. Central Park. Together they make up a large chunk of land that runs the full width of a city block. Years ago a concrete company and small house were on the property, according to John Graham, a plumber who's lived across the street on Monticello for almost 20 years.

The concrete company was closed and cleared away in the 1990s. Maldonado purchased three of the four lots in 1998 for a total of $50,000, and in 2006 he bought the fourth for $150,000 and razed the house on it. Graham says Maldonado hasn't done a very good job of maintaining the property since then, and as of last week much of it was overgrown with weeds. Shards of glass and trash cluttered the grass along the sidewalks. The lots are fenced off, but Graham says they've still attracted vagrants: "We've had campers out there."

Over the last decade property values in the neighborhood have shot up, but Maldonado says he wasn't ready to do anything with the parcels until it was too late. "Originally I purchased them to sell them, but when I was ready to sell them the market plummeted and I couldn't sell them," he says. "So I was going to partner with an experienced developer to develop them."

In May, while he was still a county commissioner, Maldonado had lawyer Dean Maragos notify residents of his intention to change the zoning from limited manufacturing/business park district to residential multiunit district so he could construct 20 units of housing in two four-story buildings.

Graham, who's president of the block club, called Maragos—a well-known attorney who's donated thousands of dollars to aldermen and other pols and run for office himself—and requested a meeting with Maldonado. It happened in May at Maragos's office. Graham says he and another neighbor expressed concerns about "too many units, too much parking—the usual stuff." He also says he asked Maldonado point blank if he intended to sell the property after getting the zoning change.

"There was a for-sale sign on the property so we thought he might have it on the market," says Graham. "I didn't want him getting the change and then flipping the property to someone else. He said absolutely not—it's not for sale."

After the meeting, Graham says, he wrote Maldonado a letter insisting that he put his pledge not to sell in writing. Maragos responded with a letter saying "the for sale sign has been taken down from the property per your request."

That wasn't enough to address Graham's concerns. "I wanted him to put in writing that he wasn't going to sell the property," he says. "I called Maragos back and he said the commissioner is a very busy guy—it's hard to get ahold of him." (Maragos didn't return our calls.)

Maldonado says he's tried to work with Graham and other residents but says they keep coming up with different reasons to oppose the proposed development, from worries that it would be for low-income renters to concerns it might block their views of the adjacent Bloomingdale railroad viaduct, which is slated to become a park.

"These are vacant lots—I thought most people would like to see them developed," he says. "People are always going to find reasons why they oppose something. Sometimes it makes sense and sometimes it doesn't."

Still, Maldonado says, the equation has changed now that he's the alderman. He promises he'll have the proposed zoning change yanked at the next meeting of the council's zoning committee, which is August 25. Then he'll start making plans to sell the property.

But that won't necessarily end the potential for conflicts of interest. A lot zoned for manufacturing is worth less than one zoned for residential, and any developer who buys Maldonado's land at Monticello and Central Park will probably want to upzone just as he did. If Maldonado the property owner is going to get top dollar for his lots, then Maldonado the alderman will probably be asked to change their zoning. And that would be a conflict of interest, even in Chicago. Even if he recuses himself, his council colleagues will be faced with the task of deciding whether to help him make more money.

Graham and other neighborhood residents wonder if he's too cozy with Bickerdike to appropriately evaluate their future development proposals. Maldonado thinks that's ridiculous. "Anyone who's been a community leader or political leader in this community has a relationship with Bickerdike," he said. "The previous alderman had a relationship with them."

Even the land he owns in other wards could create an issue—is it realistic to expect that an alderman wouldn't get favorable treatment from his colleagues if he applied for a zoning change or floated a development plan in one of their wards?

If he really wants to keep both hands above the table, Maldonado could always put the properties he doesn't live on in a trust, where a third party manages the assets for him, as long as he remains in the City Council. "I have not thought about any sort of blind trust," he said when we asked him about it. "I would not mind looking into it."   v

Ben Joravsky discusses local politics weekly with journalist Dave Glowacz at mrradio.org/theworks.

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