Upper Left: Nadhmi Auchi
Upper Right: Antoin "Tony" Rezko and Barack Obama
Illinois Gov. Rod Blagojevich and Iraqi-born billionaire investor Nadhmi Auchi were acquainted since at least April 2004, when Blagojevich held* a "welcoming reception" for Auchi "who was touring the United States," MiddleEastOnline reported. At the time, Blagojevich said that "his state 'welcomes General Mediterranean Holding's (GMH) investments, and is ready to provide the necessary means for them to succeed." Unnamed "Ministers from State of Illinois, businessmen, and congressmen were also present in the dinner held in his honor."
Auchi is chairman and chief executive of General Mediterranen Holdings SA (GMH SA), "based in Luxembourg, with offices in London, and has business interests in banking, hotels, construction and real estate."
Thomas A. Corfman reported in September 2005 that Auchi's London-based affiliate of GMH SA was "close to buying a 62-acre South Loop site whose owners include developer Daniel Mahru and prominent Democratic fundraiser Antoin 'Tony' Rezko." The deal was stalled, however, "after Chicago officials found that a Rezko-owned company improperly operated Panda Express restaurants at O'Hare International Airport that were supposed to be controlled by a minority-owned firm under the city's set-aside program."
Rezko and Mahru, as the Rezmar Corp. partnership, had "acquired the site" for $67 million in 2002 and "had been seeking a tax increment financing grant of up to $140 million from the Daley administration."
In March 2006, Corfman reported:
"A real estate firm owned by former San Francisco 49ers owner Edward DeBartolo Jr. has a non-binding agreement to buy the retail portion of a proposed South Loop development that has been stalled by several problems, including ties to controversial Democratic fundraiser Antoin 'Tony' Rezko. ... As a part of that transaction, Rezko formed Heritage Development Partners LLC to manage the development.
"The development arm of Tampa-based DeBartolo Holdings LLC would acquire about 17 acres of the 62-acre property, which is located along the south side of Roosevelt Road between Clark Street and the Chicago River."
"Debartolo also would seek to win a badly needed tax increment financing subsidy from the Daley administration, which Rezko and Mahru were unable to obtain. ...
"Rezko and Mahru sold the site after a request for a $140 million TIF grant was stymied when Chicago officials found that a Rezko-owned company improperly operated Panda Express restaurants at O'Hare International Airport that were supposed to be controlled by a minority-owned firm under the city's set-aside program."
In May 2006, six months after buying "the largest parcel of vacant land near the Loop" in Chicago, Auchi put up for sale a "key piece of the property ... which [had] defied development despite the torrid downtown residential real estate market," Corfman reported in Chicago Business.
The Chicago-based U.S. Equities Realty LLC and Eastdil Secured LLC of New York were "hired to market the 17-acre parcel," according to Michael Rumman, CEO of Heritage Development Partners LLC, "which manages the project for a London affiliate of General Mediterranean Holding S.A., a conglomerate owned by investor Nadhmi Auchi." One obstacle to the deal was the "controversy surrounding Democratic fund-raiser Antoin 'Tony' Rezko, who retains an interest in the site," Corfman wrote.
"Chicago-based Heritage, which is co-owned by Messrs. Rumman and Rezko, took over management after General Mediterranean paid $131 million for the site to a partnership led by developer Daniel Mahru and Mr. Rezko, an entrepreneur with ties to Gov. Rod Blagojevich. Heritage still plans to develop the mostly residential southern portion of the 62-acre site, but some also expect the marketing to draw offers for the entire property.
"Before the General Mediterranean deal, Messrs. Rezko and Mahru, former co-owners of Chicago real estate firm Rezmar Corp., had piled up more than $100 million in debt on the property. A liquidity crisis in early 2005 resulted in a technical loan default, property documents show, forcing the eventual sale to Mr. Auchi."
However, several months prior to October 2007, Michael Rumman "quietly resigned as CEO of a mixed-use project proposed for a sprawling site on the Near South Side" co-owned by Auchi and "controversial former Democratic power broker Antoin Rezko," Corfman reported in ChicagoRealEstateDaily.
"Rezko retains an unspecified ownership stake in the project," Corfman, wrote. "But in a series of transactions completed [in early September 2007,] control over the site was transferred from Heritage to another company, Illinois Developer LLC, which in turn is apparently controlled by London-based Moni Equities Inc. Moni’s president is Mohammed Al-Miqdadi, an executive with Mr. Auchi’s General Mediterranean. Mr. Al-Miqdadi did not return a message requesting comment."
In October 2007, a London attorney representing Auchi "decline[d] to answer written questions about the transaction. One of Mr. Rezko’s criminal defense attorneys, William P. Ziegelmueller, of Chicago-based Stetler & Duffy Ltd., also decline[d] to comment."
In the end, the DeBartolo deal fell through and Auchi and Rezko were still entangled in an unresolved land deal. This brings us back to recent events and a $3.5 million loan wired from Beirut, Lebanon, via Auchi's GHM SA, to Rezko. It was, the defense said, a loan "to be repaid in a debt restructuring involving the 62-acre development." However, the money maneuver landed Rezko in jail on January 28, 2008, for violating his bond agreement. He had failed to inform the court about his holdings in that 62 acres. While such resources remained available to him, U.S. District Judge Amy St. Eve deemed Rezko a flight risk and revoked his bond. He will remain in jail until his trial begins on March 3, 2008. [Court date updated.]
UPDATE: *Original link has been webscrubbed.
