Federal authorities have been investigating the circumstances surrounding the construction and recent sale of a West Pullman home to Ald. Carrie Austin by a developer in her ward, according to a subpoena obtained by the Chicago Tribune.
FBI agents raided Austin’s Far South Side ward office Wednesday, hauling out boxes and files. Austin, the longtime alderman of the 34th ward, has not been charged with any wrongdoing. She has not returned calls seeking comment.
The Tribune obtained part of a subpoena, issued by a grand jury, that sought records relating to “the construction, purchase, financing, rental, or ownership of, and/or work on,” a home in the 12200 block of South Laflin Street in Chicago, including billing and payment information.
Austin herself introduced and voted for the 2016 zoning change that allowed the home to be built, city documents show.
Later that year, a building permit for the home, located in a development called the Renaissance Estates, estimated it would cost $300,000 to build.
Records show Austin bought the home last October from JTA Development Inc. for $236,000, and that Austin took out a mortgage with Wintrust for $231,353.
According to the Cook County assessor’s office, the house — a 2,915-square-foot one-story masonry home with 3.5 baths and a two-car garage — is now worth $508,000. The 1.6 acres the house sits on is valued at an additional $388,000 — but land records show Austin only owns about one seventh of the acreage.
The trustee deed lists John Powen of Deerfield as the president of JTA. Reached by telephone, Powen said in a brief interview he was aware that federal authorities were looking into the home sale, but did not think it was a focus of any criminal probe.
“I think it was just a matter of course,” he said, adding he has not been approached or interviewed by federal authorities.
The subpoena is part of a grand jury criminal probe that has been going on for at least a year and a half, according to the record. The subpoena also sought records relating to several interrelated companies and their officers, including 995 LLC, Koal EnterprisesMako Properties Inc., Maxwell Services and Oakk Construction.
It also sought records on “development projects in the 34th Ward, Renaissance Estates, and/or the Vincennes project,” according to the subpoena.
Alex Nitchoff, listed as the president of Oakk Construction, said in an interview with the Tribune that he had not been contacted by federal authorities and said he didn’t have any relationship with Austin.
“No. No. Now you got me worried,” Nitchoff said. “Jesus Christ. Thanks a lot.”
JTA is the primary developer behind the Renaissance Estates project, which was originally launched in 2003 and involved dozens of new-construction town homes on previously vacant land in the West Pullman neighborhood.
A 2004 story in the Tribune said that Austin touted the project to the Community Development Commission as “an urban/suburban hybrid,” with fewer than 10 units per acre.
As part of the deal, the City Council approved $3.6 million in tax-increment financing that was to be used for soil cleanup and infrastructure improvements, including the extension of the block where Austin’s home now sits.
Renaissance Estates was originally supposed to be completed by 2006, but according to city records, JTA “encountered a number of challenges” that forced them to augment the budget and extend the completion date.
Last year, the City Council voted to increase the TIF funding for the $25 million project to a total of $5.5 million, city records show.
Austin recused herself from the vote approving the financing, according to city records.
It was unclear what connection the other companies listed in the subpoena had to the Renaissance Estates project.
Records show Maxwell Services — currently headquartered at 31st Street and Kolin Avenue on the city’s Southwest Side — is a registered minority- and woman-owned business contractor that has won seven lucrative construction-related contracts with the city of Chicago since 2005.
Koal and Oakk were listed as subcontractors on at least three of those contracts. Oakk was listed on one contract that had an initial award of up to $3 million — but the deal ultimately paid out $12 million between 2009 and 2015, records show. Koal was part of an initial $750,000 deal that paid out more than $1 million between 2006 and 2014, according to city records.
Oakk and 995 LLC share the same address in the 7700 block of West 61st Place in Summit, state business records show. Koal is located nearby.
The entities have also been heavy political donors, although there have been no direct contributions to Austin. In all, the companies have given at least $300,000 to various politicians since 2006, including former Cook County Assessor Joseph Berrios, former 38th Ward Ald. Timothy Cullerton, state Sen. Terry Link, and former 20th Ward Ald. Willie Cochran, who is now a convicted felon.
Wednesday’s raid of Austin’s office came less than a month after 14th Ward Ald. Edward Burke, the City Council’s longest-tenured member, was indicted on sweeping racketeering charges alleging he used his clout to steer business to his private law firm from developers seeking action at City Hall.
Powerful Ald. Danny Solis, who previously chaired the Zoning Committee, announced his retirement last November, but was later revealed to have been wearing a wire for the FBI — an act that stunned and angered other aldermen including Austin, who said at the time, “You don’t do that.”
There’s no indication Wednesday’s search was connected to Burke.
Appointed to the City Council in 1994 by then-Mayor Richard Daley, Austin, who succeeded her husband after his death, is known as an old-school pol, a longtime Burke supporter who has made no bones about hiring her family and friends to city jobs, including to the Budget Committee she chaired.
In addition to the grand jury probe, Austin is also facing a federal lawsuit claiming the rampant nepotism in her office led to the harassment and termination of a Department of Streets and Sanitation employee who had been involved in a car wreck with Austin’s son, who was allegedly driving a city-owned vehicle without a license.
Just two months ago, Austin gave sworn testimony as part of that lawsuit in which she acknowledged that the allegations against Burke should prompt the City Council to look at so-called aldermanic prerogative — which gives aldermen final say on zoning, licensing and other key decisions in their wards — to make sure such alleged abuses don’t happen again.
Austin noted in particular that Burke had been accused of “misuse of his prerogative as far as a development is concerned,” according to a transcript of the April 4 deposition available in court records.
When asked if she’d ever been accused of abusing her prerogative, Austin replied, “Never.”
Later, Austin was asked whether she would report it to authorities if she ever “witnessed waste, fraud, abuse or corruption” by her City Hall colleagues.
“Yes,” Austin replied, according to the transcript.
“Have you ever done so?” Austin was asked.
“No,” she said.
“So you have never seen any corruption?” Austin was asked.
She answered, “No.”
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