The Houses UNO Built

Clout-heavy United Neighborhood Organization has received millions of dollars in taxpayer funds to co-develop five senior housing developments.

It’s widely known that the United Neighborhood Organization has received hundreds of millions of dollars in taxpayer funds to build and operate charter schools in Chicago.

But the Better Government Association and Chicago found that UNO has also received millions of dollars in taxpayer funds for a separate enterprise – the development of senior housing apartments, signaling UNO’s growing business prowess, and push to diversify its interests.

In all, UNO has partnered with Chicago-based developer Senior Lifestyle Corp. on at least five housing projects in and around the city.

In 2011 and 2012, these real estate dealings generated $254,000 in revenue for politically connected UNO, financial records show.

The portfolio includes a 36-unit mid-rise in Dunning, 85 units in a former YMCA in Joliet and an impressive 90-unit project in Blue Island.

Two other developments are under construction: 84 units in a former monastery in Norwood Park and 89 units in West Lawn, directly across from a park named for the late father of Illinois House Speaker Michael Madigan, a prominent UNO supporter.

The developments with UNO are part of Senior Lifestyle’s Senior Suites brand, launched in 1993 as a public-private partnership with the City of Chicago, under then-Mayor Richard M. Daley, to address a dearth of lower-cost housing for seniors.

Bill Kaplan, chairman of Senior Lifestyle, didn’t return messages.

UNO and Senior Lifestyle may seem like an odd couple, given that UNO is best known as a charter school operator and has limited housing development experience. But real estate experts say aligning with a nonprofit such as UNO gives Senior Lifestyle an advantage in the fierce competition for lucrative public financing.

Juan Rangel, UNO’s CEO until recently, says the reasons go even deeper.

“UNO knows the Latino population better than anyone,” he says. “Why wouldn’t you want UNO involved in your projects?”

The UNO/Senior Lifestyle ventures have benefited from an unusual form of financing, called low-income housing tax credits, from the city and Illinois Housing Development Authority, a state agency. Those credits generated nearly $56 million in no-strings-attached equity for the projects, according to interviews and public records.

Additionally, UNO/Senior Lifestyle has received nearly $22 million in loans, grants and other subsidies from the governments of the State of Illinois, Cook County and City of Chicago.

Of that amount, more than $9 million came from the administration of Mayor Rahm Emanuel. Rangel and Emanuel have strong ties. Rangel was co-chairman of Emanuel’s mayoral campaign and shortly after his 2011 election Emanuel named Rangel to the Public Building Commission, which oversees construction of public schools and other city and county properties. (Rangel resigned from the PBC in May 2013.)

An Emanuel spokesman says UNO didn’t receive special treatment.

“The Mayor was not involved in the process, and the Mayor has never discussed these projects with Rangel,” the spokesman says in an email. “These cases are handled by [the city’s Department of Housing and Economic Development], which undertakes a rigorous process for every deal that is conducted with one goal in mind: to determine whether this is a suitable investment for the city.”

Either way, UNO’s political connections don’t end with Emanuel.

The BGA and Chicago magazine found that one of Daley’s nephews, Robert Vanecko, was a partner in the Joliet project, completed in 2007, according to City of Joliet records. Vanecko didn’t return messages.

Also, the speaker’s Chicago law firm, Madigan & Getzendanner, has filed property tax appeals on behalf of the UNO/Senior Lifestyle developments in Dunning and Blue Island. The Blue Island appeal of the property’s 2012 taxes was wildly successful, halving the bill to $83,708, from $176,696 the previous year, records show.

Madigan spokesman Steve Brown says the speaker was unaware UNO had any involvement with the senior housing developments, and therefore it wasn’t the reason the law firm won the business. 

Senior Lifestyle “has been a client of the law firm for 20 years,” he says.

This story was written and reported by the Better Government Association’s Andrew Schroedter and Patrick Rehkamp. To reach Andrew Schroedter, call (312) 821-9035 or e-mail aschroedter@bettergov.org. For Patrick Rehkamp, call (312) 386-9201 or email prehkamp@bettergov.org

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