How to Buy a Mansion You Can’t Afford
By City Nell on February 4, 2008 at 5:12 PM in Barack Obama, Chicago politics, Michelle Obama, Real Estate, Tony Rezko
The Obamas’ new home has received a lot of attention in the corporate media and on the blogs. This post will discuss other perspectives.
Hyde Park, where the Obamas have lived since 1994, is home to the University of Chicago (UC) Law School and at least one of UC’s hospitals. Leo Struass taught in the university’s Committee on Social Thought. The Federalist Society was born at UC, and it is the alma mater of many Neo Cons, including Supreme Court Justice Antonin Scalia.
Kenwood, where the Obamas’ new home sits, is a small neighborhood, only 1.09 miles in area. It is bound on the south by Hyde Park, on the north by North Kenwood, and on the west by the neighborhood of Highland. Kenwood was once one of the most elite neighborhoods in all of Chicago.
This map shows the juxtaposition of the Hyde Park and Kenwood neighborhoods:
According to 2000 census figures, both neighborhoods boast racial diversity.
| Group Identification | Hyde Park | Kenwood |
| White | 15.9% | 43.5% |
| Black | 75.7% | 37.7% |
| Hispanic | 1.64% | 4.11% |
| Asian | 4.27% | 11.3 |
| Other | 2.52% | 3.39% |
A census commissioned by Century 21 Real Estate in 2005 reveals how Hyde Park and Kenwood are comparable in almost every category, with Kenwood having the smaller population.
| Neighborhoods | Hyde Park | Kenwood |
| Population Estimate | 22,600 | 9,514 |
| Avg. Family Income | 81,800 | 88,839 |
| Median Age | 39 | 45 |
| % of Population with Bachelors Degrees | 21.03% | 21.75% |
| % of Population with Postgraduate Degrees | 42.49% | 32.14% |
The Obamas had decided that politics was Barack’s ultimate future while still dating. In 1991, then Michelle Robinson, who was then Obama’s fiancée, left her job at the law firm of Sidley Austin Brown & Wood. She went to work for the city of Chicago, first as an assistant to Mayor Daley, then as the Executive Director of Public Allies Chicago, a nonprofit that provides leadership training to young adults interested in public service careers.
In 1996, she left the Public Allies to help create a student volunteer program at The University of Chicago. By the time of this interview, she was the Executive Director of Community Affairs for The University of Chicago Hospitals. This is how Michelle portrays her change of career:
She was devastated when her father died from MS complications. “That’s when I started analyzing my life, sitting in a firm,” she recalls, adding that in that same year she also lost one of her best friends from college to cancer. She soon left the firm to pursue a much lower-paying path in the public sector.
The fact is Michelle was actively recruited for City Hall by a close friend, Valerie Jarrett, who was Mayor Daley’s Deputy Chief of Staff at that time. Valerie later became the Finance Chair of Obama’s 2004 US Senate campaign and then First Treasurer of Barack’s political action committee, Hopefund.
It helps to have friends at City Hall. Among other positions, Michelle was appointed twice to sit on the board of the Commission of Chicago Landmarks for two consecutive terms. Michelle maintained this board seat from 1998 to March 2005, although normally a member only serves one 4 year term.
Flush from the success of Barack’s speech at the 2004 Democratic National Convention, the Obamas decided it was time to find a residence more fitting for their anticipated new status. Barack’s 1995 autobiography Dreams of My Father soared, and they knew Alan Keyes was no threat to their future success in the US Senate elections.
Sitting on the Commission of Chicago Landmarks board, Michelle knew of a permit, waiting for review and approval to sell, for a designated Historical Georgian revival home built in 1910 with four fireplaces, glass-door bookcases fashioned from Honduran mahogany, and a 1,000-bottle wine cellar owned by a doctor in Kenwood. The Commission is supported not only by donations and taxes but also by charges for permits. It’s a pretty extensive process, and they want a complete history of the house and property when a permit is requested. Once the Board approves a permit, the application goes to the city planning or zoning commission if more than a simple sale is involved.
The doctor who owned the Kenwood home wanted more than the Obamas could afford. As Barack has stated in numerous press interviews, buying the home would be a stretch. Barack contacted his patron Tony Rezko, despite knowing he was under investigation at the time, in order to see what could be done so the Obamas could afford their dream house. Sub-division was likely the agreed-on solution. In order to divide the lot, which the doctor purchased as one entity, he would have to:
– Hire an approved architect and general contractor, who had been involved in renovations and sub-divisions in Kenwood previously
– Have the lots surveyed and new plot plans drawn
– Re-start the Landmark Commission permit approval process
– Hold a public hearing (required).
On page 51 of the Commission on Landmarks Ordinances, one finds a justification for the doctor agreeing to subdividing the land.
The applicant bears the burden of proof that the existing use of the property is economically infeasible and that the sale, rental or rehabilitation of the property is not possible, resulting the property not being capable of earning any reasonable economic return.
Pages 51 and 52 of the Landmark ordinances show how many proofs and other forms of extensive documentation are required in order to subdivide the land. Can any rational person believe the doctor would have been willing to go along with having his property sub-divided, and all the work and time involved, without compensation and assistance? Who paid for this?
With Michelle sitting on the Landmarks board, Commission approval wasn’t expected to be an issue, even though I have not located notice of the Public Hearing from any of the involved boards. From there it would go to the City Planning Board and the Zoning Boards, which also require public hearings. Each of these steps average between 6 weeks and 3 months to complete.
The doctor’s property was located in what Chicago Zoning Terms refer to as Residential Single zone 1, or RS1. This means the house the Obamas bought required 6,250 sq. ft of area. Even if it had the designation lowered to RS2, it still would have required 5,000 square feet, as seen on page 5 of Chicago’s zoning ordinances. Starting on page 8, the ordinances specify setbacks and how much space must be available on each side of a building. The open space on the building’s sides normally conform to Fire Regulations, so that equipment can access all portions of a building during crises.
Public Records at the Chicago Commission on Landmarks, the Chicago Planning Department and Chicago Zoning Boards would show the exact dates of permits, hearings and approvals. Michelle was so confident she listed the Obamas’ condo, which was located on the first floor of a Hyde Park Brownstone. In October 2004, Michelle expressed surprise to a Chicago interviewer that the Condo had sold so quickly, which meant they either had to put off a closing date or write in a lease agreement for a specified amount of time in their Condo purchase contract.
2004 was a year flush with success for the Obamas: the autobiographical book sales increased; the DNC speech had been well received; Obama won his US Senate seat; and Michelle received a recent promotion to a $316,962-a-year position as Vice President at The University of Chicago Hospitals. Their income was over 1.67 million dollars, with anticipation of even greater gains ahead.
All that needed to be done, in the name of the doctor, on the Kenwood property was completed by March 2005, and the house was finally listed. Michelle Obama resigned her seat on the Chicago Commission on Landmarks at the same time. Barack and Michelle closed on their new home in June of 2005, for $1.65 million dollars, $300,000 less than the asking price, and most likely using the proceeds of their Condo for a down payment, while taking out a mortgage for $1.32 million from Northern Trust. Tony Rezko’s wife purchased the newly divided sub-plot for the full price of $625,000 and closed on the same day.
The City of Chicago requires parking permits, or people must rent space at parking garages for around $30 per diem. There is no overnight on-street parking. The Obamas had no yard to park on, and most likely parked on Rezko’s property.
Within in a month of purchasing their new home, the Obamas began the same process the doctor previously went through. Because Tony Rezko was being indicted, they needed to be distanced from him. So the Obamas hired a lawyer and an architect. Additionally, the Obama’s wanted to put up a fence separating the two properties. On page 21 of the Landmark Ordinances above, it states fences for Historic homes can be no more than 5’ high and must not be visible from the street. If the Obamas had purchased a prefab chain, picket or wooden fence, they would have lost the Historic designation and also the eight-year property tax freeze benefit accrued by agreeing to keep the house in conformance with Landmark regulations.
A picture of the front view of Obamas’ house reveals landmark and zoning requirements.
The concrete wall and evergreens were most likely done after the city appropriated land for sidewalks, and the paving of what has been noted as a wide and busy thoroughfare. If you notice, the trees were planted one to two feet behind the concrete wall, most probably a result of zoning constraints.
The new fence was specially fabricated to conform to historic standards, and the $14,000 cost was billed to Rezko per agreement by Obama and Rezko. Obama states he paid for the architect and Lawyer. Strangely enough the fence actually sits ON the property line between the two lots. Obama agreed to yard maintenance for both properties. And given Obama’s history with the Harvard Law Review and his limited known court experience from public records, Obama most likely either edited or personally wrote the legal documents for his sub-division and the fence. On January 12, 2006, the Obamas closed on the 1/6th of Rita Rezko’s property they purchased for $104,500.
Facts not specifically cited above, and much more, can be found in this Chicago Tribune article.
This MyDD diary features a special video from NBC news that provides broader views of Obama’s property. The diarist makes note of an SUV sitting on the 1/6 new parcel of Obama’s land.
In all likelihood the driveway was previously on Rezko land. Behind the house is most likely an old carriage house converted into a garage. Parking on the street in that type of neighborhood is prohibited by zoning and fire safety laws, unless someone in authority had been previously notified of a large gathering.
One other event of note occurred in 2005. Daniel Mahru, Rezko’s partner in Rezmar for 16 years until the two men had, according to Mahru, “a difference of opinion,” resigned from Rezmar, Rezko’s slum landlord operation. Did Mahru leave because he knew any shady deals while Rezko was being investigated would lead to disaster?
There were lots of people involved in the purchase of the Obamas’ house, and they would all be owed some kind of consideration for their help and support. Obama’s favors from Rezko amount to $925,000, plus an additional $14,000 for the fence, bringing the total cash value to just one person to $939,000.
Will Rezko sit quietly in jail or will he bring Mayor Daley, Governor Blagojevich and Senator Obama down with him?
How will Obama repay the “favors” he owes all these people?
I am sure Patrick Fitzgerald will reveal all these connections and much more in Rezko’s upcoming trial at the end of this month.
TM says to send some love.
Aren’t three of Obama’s economic advisors from U of Chicago? Possibly Friedmanite school? It brings to mind Naomi Klein’s shock doctrine.
interesting point Em … oborgs will tell you that barack was influenced by another chicago professor … saul alinsky. yet, his advisors are neoconic friedmanites.
ms. klein got it spot on in her book … no doubt!
Thanks for the diary.. that’s impressive detail!
My question is about measuring the size of Rezko’s “favor”.
Is Rezko’s lot buildable? If it can be built upon, then sold, then you can’t consider the full $625,000 to be a gift, can you? Are you saying it’s not buildable?
It’s called a kickback given by a crook under investigation for fraud,blackmail,money laundering and kickbacks. Rezko to Obama.
Rezko was clearly under federal investigation and as Obama’s main patron and donor Obama felt no constraint about concluding this stinky land deal.
Judgement? Is this a judgement a future President should make?
Rezko, now indicted, and in jail for lying to the court about his finances and money laundering [covered by Larry last week], is in jail. His trial is February 25th. I wonder if this comes up at trial. Meanwhile, Mr. Pure and Inspirational
may be mentioned should this land deal arise.
So far the hysteria of adoration is so intense from Obamaites, even murder would elude consideration.
Blind faith has made him The Messiah. Maybe the trial will change perceptions.
Check out the posts on HuffPo. One of them says that Hillary supporters are “trying to shout down the rising Sun.”
That’s right. Obama is the sun to these guys.
Another poster replies to an Obama critic with “I think you’re late for your KKK meeting.”
Also- I’ve lost count of how many callers to Air America and Washington Journal who’ve said that they are for Obama, and if Hillary wins the nomination, they won’t vote for her. I have YET to hear a SINGLE Hillary Clinton supporter say that they won’t vote for Obama if he’s the nominee. Obama’s supporters are not Progressives. They are petulant, starry-eyed children living in a dream world of their own making, who are perfectly willing to take their ball and go home if they can’t lead the team.
Get ready for President McCain. My only question is, how does Obama’s defeat this fall get blamed on Hillary?
I won’t vote for him, I cannot in good conscience vote for a man I feel is as unqualified, and as corrupt, as Bush.
I will write in Edwards.
I won’t vote for him. Of course, I also won’t vote for Hillary.
I think very unlikely that anything will get built on that lot and the plan was for enough time to pass and Barak Obama would ‘buy’ back the lot. After all if Obama doesn’t purchase it, the property has a good chance of a lean being placed on it by the Govt’ if Resko is convicted after a fair trial. It was in Rezko’s wife’s name and that says enough right there.
What I would like to know is whether getting the house for $300,000 under the asking price was consistent with what the market was doing at that time. It is odd that the lot went for full price but the house was not. Why would that be?
I think you would have to find the 300,000k some where else on (or off)the balance sheet. The person selling the property for an unrelated compensation or Rezko would have to absorb the difference. Mob financing.
Obamas closed on the 1/6th of Rita Rezko’s property they purchased for $104,500.
Doing this would lock the out any chances of the lot being developed, especially if the lot was the minimum size allowed under the zoning laws.
What a sweet deal to get inside info on a property that has an 8 year property tax freeze on it. What are the property taxes like in that part of Chicago? Hell of a savings I’d think. Did the seller take a note?
Please, that fourteen thousand for a fence is such an inconsequential amount of money…
the average family of two college professors getting 200g a year, in danger of having the Bush tax cuts repealed, could easily cover that much cash.
Then again, two instructors don’t make 200k combined, the tax cut doesn’t help middle of the road Americans, and fourteen thousand is a lot to sneeze at for the average American.
Barack made fence construction a priority on the border…
…of his mansion.
Maybe he’s going after the Paul votes?
Obama is dishonest. Plain and simple. But there is no traction yet as the outrageous lack of ethics and bullshit around Obama is under the radar.
He can get the nomination and GOP takes this plus other stuff and another failed Democratic election.
My aunt, a devout Republican but a dear person nonetheless :), told me today that she thinks the Republicans will find it difficult to attack Obama during the general election simply because of his race — they’ll be afraid to attack him and get accused of racism. Just a thought from a smart lady.
They wont be speaking to your aunt, they’ll be speaking to Rush’s listeners.
And they will be subliminal, not overt, attacks.
All of this supposing Hillary loses, of course.
A big if.
Rush has already sung “Barack the Magic Negro” on his show, so I doubt that if he is already willing to be this disgusting he will be afraid to attack Obama. Heck Republicans thought nothing of attacking a genuine war hero, John Kerry, accusing him of lying about his record. These guys have no shame and will be perfectly willing to do the dirty work for the party.
So Rush uses Obama’s technique against Obama –divide and conquer.
I’ll have to give it to Rush.
When Republicans turn away from using race to win elections hell will have truly frozen.
Am I the only one here that finds it inappropriate, and possibly dangerous, for you to publish a picture of the Obama’s home???
And no, I am not an Obama supporter.
Use your head(s) please.
Oh dear. That picture has been in hundreds of publications purchased by millions of people, and shown on every television network!
Obama has security second to Cheney. Come to think of it, does an Illinois state senator have to live in the district they represent?
To add to my comment just above: ABC alone has shown that picture dozens of times. Every Chicago TV station has shown it innumerable times. So has CNN, MSNBC (see the video above), and on and on. Every Chicago newspaper and numerous newspapers around the nation, as well as around the world, have also shown the picture.
Besides, your tax dollars are hard at work protecting the home. With full Secret Service protection. Yes, just for the home. Not just for the Obama family. Probably costing millions.
It is a historical building as well. Michelle Obama using inside info, which jives with the statement about Obama saying he approached Resko about it.
They don’t build them like that anymore.
Using inside info?
How so?
In the artical above it says:
(sorry for the length of the post.)
Ok I think if you “plugged in” and this happens:
she was the Executive Director of Community Affairs for The University of Chicago Hospitals. and had known the doctor but only found out about through the permit phase.
Michelle Obama picks up the phone and says:
“Hey Barak guess what I saw today?”
Barak: Really! Where? How much??? I don’t think we can swing that much, let me make a call or two.
Michelle: Later
Obama: Hey Tony…
Rezko: Hey whats up?
Obama: I got this sweet deal but I have to act fast and I need some money to close the deal ASAP.
Rezko: What’s in it for me? You know I got the Feds lookin at me, don’t you? I heard it from ____(fill in VIP)…
Obama: Yea I heard that, but I will be in the dog house forever man, if I don’t get this done. Maybe we could subdivide the lot…(crunching the deal and the appearances)
Rezko: well if you want to do the heavy lifting I’ll split it with you.
Obama: I’ll get the ball rolling…
During the next week:
Obama: Hey Tony, Michelle got the property locked down and and if we subdivide the lot, Michelle doesn’t want to have anyone building on your lot.
Rezko: How the hell do you suppose that makes it right with me? I can’t sell the lot.
Obama…well Michelle says if we by back 1/6 of your lot it can’t be built on. We can get you your 20% down back out and I will ______(name your quid pro quo)owe you one bigtime.
Rezko: I would have to put it in my wifes name so the feds can’t peg me.
The rest is public record (or lack of) if you can find it.
This whole chain of events was put in motion by Michelle Obama knowing in the permit process, a house was coming on the market. A house can’t be approved for sale unless it has gone thru the legal hurdles required. If one has foreknowledge of this and seeks to profit from the information that is subject to legal scrutiney.
That’s is why Obama says it was a “boneheaded move”, because he did something that his wife wanted and would run counter to common sense. He knew Rezko was under investigation and it did not matter because as any leashed husband can tell you, “If I make the wife happy I can play with my friends.”
You are SO good! I hope the author sees this. It’d be great to add or use in another article.
If I could only type…Thanks, but I am riding on the shoulders of many fine people at NQ. I clicked add and saw the Comment by Steve Judd who put the icing on the lemon cake. Thanks Steve Judd.
If Rita sold it to a former lawyer of Rezko’s, is there attorney client privilege that would “insulate” Tony in this deal from the Feds?
And the sweetest part is that the property taxes are ZIP nada for 8 years. The last time I heard of deal like that a relative and his wife had a “grandfathered” rent control apt in Sunnyside Queens 2 bd for only 120 dollars @ month when rents for the same were 1800.00.
HEY TONY
Tea,
I laughed so hard - These would have been my exact words - but like Halloween you have to be careful of the wierdness, the form the cultists take on Super Tuesday is unknown in my lifetime.
Thanks for your directness and the great laugh!
be careful of the wierdness.
Welcome to the “Magic Theater”.
Not these days. Have you used google earth? I can see the doughboy pool in my backyard from space.
The video was on MSNBC. I doubt that this website will pose a greater threat.
I grew up in Chicago.
It makes me so sad to think those idiots originated at UC, in my hometown.
When I was a kid, some earnest young man tried to recruit me to the Communist party of all things, when I was hanging, with a friend, near the UC. Sure not the Scalia crowd.
I was a Democrat, though, even at that age, I said no thanks, I thought he was unrealistic, off his gourd, really. The things he spoke of didn’t jive with the reality I saw, the people I knew, but, you listen, you learn. I told my parents, learned communism was worse than being a moonie, but he was just this little thing, with glasses, thereby referred to as “the communist,” in my family, as in “I don’t want you hanging ’round with that communist anymore.”
Ok, Dad.
I thought it was funny. He was puny, tiny as could be…
Was the Rezko lot listed as undeveloped in the first sale? Wouldn’t the driveway contradict that designation?
According to records - the entire property was one plot - the sub division came when the Doctor who owned the property tried to sell. The Rezko’s lot after all the hearings was refrred to as the “Garden Plot” by Obama in the Tribune article. That is probably the most apt description of the piece Rezko has.
Well Done City! I am truly impressed.
Did you know that Obama’s community organizing job in Chicago was a “faith-based” community orginizing effort. I did not know this. Obama never mentions this. It is always making us believe he worked as an organizer. Almost as if he were a labor organizer. Or a non governmental worker. I never once heard he worked for a church affiliated “faith based” group for three years. Is obfuscation considered a non-truth.
I never once heard he worked for a church affiliated “faith based” group for three years.
LOL!
Previously I said we should skeptical of the amount he coordinated campaigns with faith based initiatives.
South Carolina was my example.
It’s more broad than that, a pattern indicator.
Alibe,
The rubic ‘community organizing’ contains ‘faith based’ stuff in Hyde Park and Kenwood. Here are 2 links to newsletters from the Hyde Park-Kenwood Community Conference (HPKCC). THE main area organization that /] controls Development, Preservation, Zoning, Community Meetings, Cultural Calendar, Community Events, Civic/Social/Personal Development, Spiritual Affairs, Events, and More:
http://www.hydepark.org/
http://www.hydepark.org/historicpres/urearlyhpkcc.htm
This is a very important post. Are you applying for a job in the future Hillary administration?
Great and thorough post about the Obama-Rezko deal and I always wondered how the Obamas learned the property was available.
A few follow up points, if I may. The property was “sold” by Rita to Rezko’s former general counsel, a lawyer (and decent sized Obama contributor) named Sreenan who now has the property on the market for 1.4 mil, probably due to all the publicity. There are no concerns about security, then, as you can call the broker and go see it if you like.
Saul Alinsky never taught at Chicago, lord knows, nor is it likely Obama ever met him as he died in 1972. He was a legendary, tough, no holds barred community orgaanizer who likely would have laughed at a guy like Barack who spent a couple of years with The People to launch his political career. Alinsky despised politicians in general and liberals in particular. Read his Rules For Radicals for a bracing call to action at the grassroots and only through the grassroots.
Obama’s main economic people are the U of C’s Austan Goolsbee and from the law school Cass Sunstein. Their guiding doctrine is called “Libertarian Paternalism” and no, I’m not making that up. Its foundations are described in Volume 70 of The University of Chicago Law Review. Not being an economist, I can’t explain it well, but it’s part of the very au courant theory of “behavioral economics” which deviates somewhat from pure free market theory (Milton Friedman). Barack’s health care plan is lousy with the theory and I think it’s fair to say Krugman and other true liberals think it’s largely hooey.
Great comment, Steve. Search our site for the name Goolsbee, and you’ll find an article about his economic advisers.
Stephen Schlesinger began revealing who they really are.
But, wow — “Libertarian Paternalism” takes the cake. I wish I knew more about economics so I could dig into that more.
And if you search for Paul Krugman, you’ll find cites from both his columns and his blog on Obama’s terrible health plan as well as his “disreputable” economic stimulus plan (at least the first one) and that his second plan is far less helpful than either Edwards’ or Clinton’s.
Saul Alinsky was a UC alumnus, as were/are Paul Samuelson, Richard Sennett, Katharine Dunham, Susan Sontag, Andrew Greeley, John Paul Stevenson, Greg Palast, and Seymour Hersh.
It’s a travesty that an institution of as much depth and breadth as UC has become so identified with a coven of fools.
That is all.
–Relative of a Divinity School alumnus.
Steve,
A few comments about your follow-up points on Obama’s property - this
I taught Mid Easterners for 18 years at the college level. No it wasn’t one of the top 75 colleges. Bush Sr. in the early 80′ hired recruiters for the Mid East, Korea, China, Taiwan, South East Asia and the Pacific Rim for lesser known colleges, and forced us to accept these people. Our population ended up being 39%, mostly from Arabic speaking nations and Iran.
Long story short - it was very helpful in teaching us Americans about different cultures - and we got to know them in depth because the state I’m in has very strongly enforced in Locus Parentis laws.
There is much more to this laywer of Rezko’s than you can imagine. However, I do not have the street creds of Larry, Mr. Murder, Pat Lang etc.
The summary of it is that Mid Easterners, because of the crappy governments they have always had, enjoy savoring what they call justice and Americans call revenge.
I will send Larry the info I have, and perhaps he can get one of his colleagues to verify and post about what I believe I know.
Mr M, isn’t it obvious why the Clinton plan costs taxpays less? It’s because she wishes to mandate millions of people purchase their own insurance or pay fines or face garnishment? Maybe the fines she’ll extract from the people who can’t afford a policy are factored into the so called savings. People between the ages of 50 –65 are just about impossible to insure. Forcing them to buy extremely expensive coverage with a 10K deductable, policies that have dozens of disclaimers, is as Obama says, “House insurance not health insurance”. Personally if there are going to be mandates (which I oppose) I’d prefur mandating that everyone have to carry 20K with low deductable & just have the taxpayers indemnify all catastrophic, it’ll get us to a single payer system quicker, which is where I want to be, with the insurance giants out of the picture. A not for profit concept.
Not at all. Massachusettes, where my Aunt lives, has a version similar to what Hillary is proposing. The state being a LARGE customer, chose insurance comapnies based on peoples’ need for treatment and medication.
This allows the state to be the direct client to the Insurance company. Payment of plans is predicated on income. For example, my aunt pays $25.36 monthly directly to the State. The state in turn pays $27.36 monthly to my aunts insurance company.
This allows my aunt to get meds that cost over $400/month that she needs to stay alive. In turn because it is such a large pool of people, the Insurance Companies (I believe my aunts pharmacist said there are 7 in her area) still make a profit. While the state of Massachusettes actually REDUCED their medicaid costs.
Not as perfect as pure single payer, but a hell of a lot better than what was before. In the past people were forced to make cruel choices as whether to get meds and eat dog food, or eat better and become ill becuase they couldn’t afford the meds.
This way the state is covering everyone, and actually saving money.
The idea of share holders in an insurance company profiting by a sick/injured party being denied care is abhorrant to me, as is (what Clinton did during the end of his first term) paying med schools like John Hopkins a subsidy to train less physicans, therefore insurring greedy doctors would continue to to be non-competative & keeping costs high, also in times of need (like now) draining the 2nd & 3rd world countries of their needed doctors. The care we have in this country is, for the most part, assembly line & grossly over priced.
Steve & Susan, libertarian paternalism is more palatable to me than pure paternalism. Google it Susan, it’s not difficult to understand. It beats the hell out of sledge hammer big brother pateralism, where the individual has no choice in deciding their own destiny & becomes chattle of the state for the good of the state.
Guess what justsomeone, As long as the BIG moeny guys have purchased in full a potential president that is exactly what you WILL get. In December 2006, Obama made a deal with the BIG money people and is TOTALLY owned by them, Here is your link:
http://nymag.com/news/politics/30634/
Whether you call it libertarian paternalism or plain paternalism , the actual dictionary and historical meaning of FACISM applies - and it does not matter how you label or parse it.
What everyone is upset about is that Obama supporters clearly haven’t done their vetting or homework. Either that or they are behaving as much like ‘BOTS’ as the right wing. Either scenario is horrifying.
Oh dear, where do I start on debunking some of the insinuations in this post. I will try my best. First, I am a real estate attorney that used to practice at a real estate boutique in Chicago. After reading this article, I did not find even a whiff of illegality in these transactions, and worse, people seemed to have missed some obvious points.
First, I am completely befuddled by the ominous description of M. Obama’s role in this. She volunteered for the Landmark Commission. That job is, quite honestly, a pain in the rear. No owner is happy to get the designation, and the poor schleps who volunteer for those boards are often beset by angry landowners. (Why? Just imagine having to wait for over a year to get permission to replace windows. Sound fun?) The fact that M. Obama learned of a mansion through her role on the commission is not even remotely an ethical impropriety. (There is nothing inappropriate about this, unless you are averse to networking for information and contacts. Think about it - you volunteer to serve on boards to make contacts and potential business contacts, as well as knowledge of the business. Learning about a house for sale through one’s work is wrong, umm, how?)
Next, the Obamas can’t afford the house + the vacant parcel next to it. (Although that seems difficult to believe as they seem pretty flush. Rule of thumb - multiply your salary by 3 and that is the house you can afford.) So, they strike a deal with the owner to sell the house and parcel separately. Again, nothing even remotely inappropriate about this transaction. I have no idea what point the author is driving at about subdivisions. They are completely commonplace in Chicago and in every other city and town of this country.
Here is the point that everyone, and I mean, EVERYONE is missing. The doctor seems to have earned MORE than his original asking price. The doctor sold the house parcel for $300,000 less than his asking price, but earned over $600,000 for the vacant lot. In other words, the doctor earned an additional $300,000. (That answers the author’s “innocent” query about why the doctor would undergo a subdivision process. He made more money by selling the lots separately!) Why is the house less $300k and the parcel $600K. Aha! See the above discussion concerning the house being landmark. Once a landmark always a landmark. The vacant parcel, on the other ohad, is one of the most valuable parcels in the city.
As for the insinuation that Obamas purchased the house for $300,000 under market…that is just …plain…wrong. Let me say it slowly…if the seller sells you less land, then you pay the seller less money. Ergo, the Obamas did not pay $300K less than the asking price. In actuality, the seller made MORE than he should have. Use your heads, folks.
Next, we turn to the vacant lot. Why would the Rezkos buy a vacant lot in one of the hottest, most prestigious neighborhoods in the City of Chicago? Said neighborhood is filled with 100 year mansions and brownstones, and there are very few vacant lots. And, oh yeah, a state and now federal senator lives next door. What kind of idiot wouldn’t see the marketability of that lot? Why would the Rezkos pay for the fence? Umm, I believe one of the above poster say the lot was being marketed for over a million dollars at the moment. Any more questions?
The only issue that stinks - the Obamas obviously asked the Rezkos to buy the vacant lot. Rezko is a dirtbag. If I recall, Mr. Obama said it was “boneheaded” mistake.
However, the rest of the insinuations are pretty laughable. Are you people a bunch of noobs when it comes to real estate transactions? If this is the worst thing you can pin on a Chicago politician, then it is obvious that most of you are unfamiliar with that town. Unless something more comes of this, there isn’t much here to fret about.
“Next, we turn to the vacant lot. Why would the Rezkos buy a vacant lot in one of the hottest, most prestigious neighborhoods in the City of Chicago? Said neighborhood is filled with 100 year mansions and brownstones, and there are very few vacant lots”
But wait, wait…this runs contrary to the governing Obama narrative that they got the property below asking (which they concede, never having made your interesting point) because of the down market for housing at the time of the sale in 2005. So if the market is trending down, why pay 625 for a vacant lot where you’ll need a new home to price at, what, 2 mil to make any money on the deal? In Kenwood, hot or not?
Also, and I don’t know the answer to this, is it just the Obama home that’s landmarked or is it in a landmark district where new construction would be governed by the Landmarks Commission as well? In either case, I read that the buyer from Rezko floated a six townhouse project for the vacant lot and landmark district or not, local preservationists went sufficiently thermonuclear that the property is now back on the market at the inflated 1.4 mil, complete with Secret Service protection.
But I agree with your main point; there seems to be no illegality here. Nonetheless, and damn, making Tony R your partner when everyone knows he’s not far from that orange jumpsuit? Can we at least agree that the deal is troubling from a judgment standpoint?
From your description it would appear that the members of the Landmark commission deal directly with the owners of historic properties. In the case of an applicaiton to subdivide would the members of the commission vote on the application, would they have significant influence on the outcome of the application or would this be almost entirely a staff decision?
I think you have some of the facts wrong in your description of the situation — from what I have read the house and the neigborhing lot were initially part of an application to sell them as a unit and the rules for subdividing stressed economic necessity. I have not seen anything saying that that application was ever completed nor have I seen anything saying that the house and the lot were ever offered as a unit. At the point that the Obamas bought the property, the house was being offered at 1.6 and the Obama’s bid 300,000 less and this was accepted. Separately the other lot was offered for 635,000 and Rita Rezko paid full price.
So given the state of the realestate market in Kenwood at that time for that type of property was the discount plausible?
If you are correct that the house and lot sold together but bound by the Landmark regulations were worth less than the house and lot sold separately which you state frees the land from from the Landmark controls were worth more.
Oh Jacek,
First of all, either starting on page 21 or page 22 of the Ordinances linked to above, it clearly states the MAYOR appoints these people. I honestly do not know if they are paid.
However I come from a state where State Senators are Paid $200/annum and State House Reps are paid $100/annum plus 45 cents per travel mile. They can meet as often as needed and have a beautiful new building in which to do so. Thus, we have a REAL Citizen Legislature. Our Bond rating is also much HIGHER than Illinois’. Whether people volunteer or are asked its called public service, as written in most state consitutions.
I believe that corrpution whether it’s called that, or change is one of the main issues for Americans.
Where I come from, Michelle, if she had REAL ethics, would have recused herself, instead of taking advantage of her position. Secondly, if you actually practiced there, then you are aware of the HPKCC, which has tremendous influence, due to their affluent members. Their participation is also part of this whole package as is that of the Alderwoman for ward 4.
I am fully aware that Chicago is as much a cesspool as DC. However, that does not respond to the need for impartial PUBLIC SERVANTS for ALL constituents in a given area.
Excuse me for being so brash, but your entire comment is a justification for SITUATIONAL ETHICS, rather than GOOD GOVERNANCE.
I strongly suggest you visit Beirut, Amman Jordan or any other Mid-East country where there is relative safety, and where the same thinking has always been standard operating procedure. Then take take a hard look at the living conditions for the average citizen, and ask if this is the type of place you would like for future American citizens.
My state threw a guy named Thayer (IIRC) off the State Supreme Court for much less than this. The current Bush made him a FEDERAL JUDGE. According to the logic in your comment, the citizens of my state were WRONG and Bush was RIGHT??
Jacek; as I said the 300,000 is some where else on the balance sheet. Thanks for the points you made… I really hate being noob. What then is the 1/6 thing about?
If you have a copy of the Doctor’s first permit on intent to sell, and the original asking price, you would be doing everyone a service and posting it. My hunch, and knowledge from googling, is that $2.1 - $2.8 Million+ is the typical asking price for homes of this type in that area.
Doctor’s first permit on intent to sell…
City Clerks office?
No,
Chicago Commssion on Landmarks - Heres the location:
33 N. LaSalle St.
Suite 1600
Chicago, IL 60602
TEL: (312) 744-3200
When wandering through the files, you will find all kinds of great information. Pages 51 and 52 in the Landmark Ordinance link above will give you what you are looking for.
The Cook County Registry of deeds, should be the next stop and will provide even more detail. Don’t forget to note mortgages, amounts and when they were discharged.
Once you have the addresses and names of the realtors, a quick look with a Realtor you know for May 2005 MLS listings, will show if there is/was a carriage house or garage on the Kenwood property.
The magic of addresses will also allow you to wander over to the city property tax office and find the rate and full assessment for both the Kenwood and Obama’s Hyde park address.
If I lived anywhere within 60 miles, I would have slethed out the info. Alas, I live half a continent away.
I look forward to seeing what you dig up - maybe Susan or someone she knows, can give the entire package to the lazy, lazy National Media - as well as Hillary’s campaign. The very wealthy usually delegate these kinds of details, and aren’t aware of them unless a ’situation’ arises.
I live near the big pond. Not the lakes. It is on my “walk about” short list.
Nellie, read your link & must say I don’t get the point. Is it the Clinton campaign practices “total retribution”? I’m not interested in this type of inner party vengence. I’d sure like to see total campaign finance reform minus the McCain/Fiengold type of curtailment on free speech. Ever since the Supremes ruled money is speech & free for the pickin’, the high dollar stuff is outta my control.
Teakwoodkite, “first notice on intent to sell”, what’s with Chicago’s mother-may-I approach to selling a property? Or does this only pertain to historic districts?
justsomeone, first notice on intent to sell
I have think it is historic. From the artical it is implied that “historic” properties have to go through a process, analogous to to getting a car smogged before you can sell it. I am curious as well and the answer is public so it can be found with enough digging.
Nellie,
I am STILL completely at a loss about what you are implying. M. Obama is guilty of what corruption? I have not made ANY conclusion of situational ethics because there is NOTHING unethical in M. Obama’s actions. Let me recast the situation in less “sinister” terms. The permit comes before M. Obama’s commission, and she learns about the house. She says to herself, “Hey, this sounds nice. Let’s go check it out.” The Obamas see the house and love it, and decide to buy it after the usual wrangling that every couple goes through before they make a very large purchase.. Anything wrong in that? I don’t see it.
Teakwoodkite - Obama bought the house parcel for $1.6M, which was $300K less than the asking price for the house parcel+vacant lot. So, the original asking price was $1.9M. The doctor received $1.6M from the Obamas and $600K from the Rezkos for the vacant lot, meaning the doctor earned $2.2M for a real estate parcel he was originally marketing for $1.9M. In other words, there is not a MISSING $300K, but rather, the doctor earned an ADDITIONAL $300K by dividing the lot into two transactions.
The 1/6 thing is explained a follows: The Obamas asked the Rezkos to sell a 1/6 portion of the vacant lot to the Obamas. I went to the actual Chicago Trib article, and it stated that the Rezkos offered to sell the 1/6 parcel to the Obamas for the pro rata share of the ASSESSED value of the parcel, which would have been approx. $40K. The Obamas refused, and instead paid the Rezkos’ 1/6 of the Rezko’s purchase price, i.e. full market value, of the lot, totalling $100K or so. In other words, the Obamas could have done something unethical at this juncture, and received a $60K gift from the Rezkos, but they turned it down.
Quite honestly - if the Obamas were engaged in an unethical transaction here, why would they have suddenly turned ethical at the tail-end of this transaction. Why pay $60K more than strictly necessary. (Note - assessed value is not the true value of a property. It is probably enough to withstand IRS scrutiny, but not ethical sanction. Sen. Murkowski in Alaska made this mistake a little while ago.)
Nellie - I know you want a “there” there in this story, but it just doesn’t have any “legs” other than the one Obama has already admitted was boneheaded. And say what you will about Chicago corruption, the City is not nicknamed the “City that Works” for nothing. Machine party politics it may have, but it a fantastic city in which a lot of people have pride. Mock it, but you won’t win many fans that way.
Jacek,
At a bare minimum - M Obama is guilty of Duplicity, Hypocricy and shady dealings. Obama and his surrogates broke at least 3 Laws of our state laws while campaigning in NH.
Public Servants, are to be examples of good behavior and above approach. Furthermore, M Obama, whom you obviously like, started whisper campaigns in NH and elsewhere. She even was trying to recruit Edwards volunteers, while his campaign was still active. Even National League sports teams have strong regulations against that last. How do you teach young people about solid ethical behavior, if you sanction lack of it in someone because they have titles or are politicians?
Frankly, I am NOT trying for office in the Windy City. In the early 80’s I attended the IBM school there quite a few times. I loved the market area, got to see the play “Evita’ and adored the open sidewalk cafe’s/restaurants along Lake Michigan.
You and I obviously have very different ideas of acceptable levels of right and wrong. Having coffee together would probably not work too well.
However, if I was looking for a lawyer, not too concerned with going to the edges of the law, while ignoring the spirit of the law, and standard ideas of right and wrong, I wouldn’t hesitate to call.
I come from academia, where the feeling of responsibility to teach solid ethics, is primary and strongly enforced. A primary tool of teaching is to practice what you preach. Or by example if you will.
This statement of yours says all I have surmised about the Obama’s I have not made ANY conclusion of situational ethics because there is NOTHING unethical in M. Obama’s actions. What they have done, as mentioned in the first paragraph above falls into much more than unethical - it falls into criminal in my neck of the world.
Again you plainly believe its okay to use a PUBLIC position for personal gain. That is competely opposite of what we believe here. Even your justifications for the constant moving boundaries of the lots; it is expensive, and the number of PUBLIC tax dollars to support hearings and approvals is a waste, and thereby frauduent use of taxpayer money. Those same dollars could be going into projects that benefit an entire community, rather than just a few people.
Ok I get your point; it is Chicago. The original point I was making is that Michelle Obama gets on national TV and says “we don’t play those games”.
I say Bullshit! (Like the card game) Infact I would not be surprised if she gets “jammed” by the Federal Prosecuter as a way of getting Obama to be verbally compliant about his relationship with Rezko. He tossed a reporter in jail for less and it appears Obama is the kind of person who would toss you overboard as a matter of self preservation. Obama is in WAY over his head.
1) She knew, knew of, or was aquainted with the Doctor prior to the house legally going on the Market Due to her position as
2) This house was not legally for sale at the time Michelle informed her husband who called Tony Rezko for monetary assistance in getting the deal going.
This supposition is supported by the Obamas putting the condo up for sale when they did.
3) The doctor may have started the process of sub-dividing the lot but the artical states that Barak Obama paid for this cost. So in terms of making it worth while for Tony Rezko, between the concerned parties Tony and Barak needed to subdivide the lot for a stake.
4) Regarding the 1/6 thing.
Tony Rezko’s wife purchased the newly divided sub-plot for the full price of $625,000 and closed on the same day and subsequently sold to a freakin lawyer that had Tony Rezko a former client.
a )I still want to know what effect it had on the viability, to build on the lot. In that situation I would have looked at that very possibility to make it “unusable”. b) In either case paying the 100k back to Tony Rezko just means he got his equity back out sooner than later. yes as you point out that the 40k would have looked “bad”. SO now there is the 60k on the balance sheet along with 300k difference in the price of the subdivided lot.
5) The good doctor could propably not give rats ass, as long as he got his asking price or better. It would be a Plus, if the party interested in purchasing it for more than he was looking for had connections in the Chicago Commssion on Landmarks and could help take care of any bumps in the road for the good doctor. I know I would if, as justsomeone ponders, the “Chicago’s mother-may-I” laws may require such a obstical course to sell a property.
6) Tony Rezko was interested in money, maybe not a fat profit but enough to get in and out of the transaction with a quick return and a favor owed, Michelle wanted THAT house and Obama? He just wanted a happy wife. Not a small number of men break out in hives when making your wife happy adds up to 1.65 million dollars. Been there done that for a whole lot less.
7) Michelle Obama resigns from Chicago Commssion on Landmarks the same day it goes into a 90 day escrow.
God it is a