It’s a little hard to figure how the Tribune is letting Byrne get away with simply false assertions in his last column, but it’s also hard to figure the Kass column didn’t get toned down
The fact is the Obamas and the Rezkos bought property in a fashionable South Side neighborhood next to each other on the same day, from the same lot, and the Obamas came out the winners.
Obama bought his home at a $300,000 discount. Rezko bought the adjoining lot from the same sellers at full price. One got a juicy bargain. The other overpaid. Legend has it that Rezko never paid full price for anything in his life, so he starts with Obama?
I don’t dispute that Rezko was trying to get in with Obama, that’s his style, but there’s a simple point the original story made:
In the past, the two lots had been sold as a single estate. But in 2005, the owners listed the two parcels for sale separately.
The plots were for sale separately from the beginning before Obama would have even known of the property.
Later, it occurs to the senator that he’d like a slice of Rezko’s acreage to enlarge his estate. Obama’s appraiser told him the fair market value of that slice was $40,500.
Since that’s one-sixth of the Rezko side, it means Rezko paid $625,000 for property that was actually worth $243,000. That would make Rezko a complete fool. But he’s no fool.
Obama then offers to pay more than $100,000 for a slice of land that wasn’t worth that much, because he wanted to be fair to Rezko.
Hmm.
Hmmm…John Kass, unlike Zorn just a few days ago, didn’t call anyone to discuss how real estate assessments are done. Zorn did a good job describing the confusing world of assessments by, ta-da, asking someone who knows. A strip of land like was sold to Obama isn’t worth just one-sixth of the value of the land because it cannot be used for anything by itself–and so appraisers use formulas to figure out what the value of that land is. Obama paid nearly 2 1/2 times that value to Rezko. The sum of the parts of a property don’t simply add up to the value of the property. Anyone who has ever dealt with an easement or similar situation to Obama would know this and any property assessor could give you an answer as to whether the initial assessment was reasonable. Kass didn’t do that. Instead he just tried to “raise questions.”
That’s the other thing, the fence. Obama says his engineer and architect planned it, and then Rezko put it up for him.
And what if Rezko had put up a fence that didn’t meet Landmarks standard–what would Kass be saying? I have an idea and so did Obama. In this case Obama worked to ensure the fence would fit Landmarks requirements–a situation which also affects the value of his property whether it resides on his property or not. Who got the benefit of that–Rezko.
Rezko already had to fence in the yard–that’s a city requirement to combat illegal dumping.
I don’t have any question that Rezko was trying to do favors for Obama, the thing is Obama did everything to make sure no favors were done. He could have asked him not to buy the property and probably wishes he did.
All that said, Obama responded to a property for sale, bought it and had someone else buy the adjoining property probably to get a good in with Obama. And Obama has done everything above board including paying more than the estimated value of the land he bought.
I think an important detail in this story is the apparent fact that the Rezko property is apparently inaccesible from the street … the only ingress and egress can be had by transversing Obama’s property. Unless there is an existing easment abutting other sides of the property, this makes the Rezko property virtually useless to anyone but the owner of the Obama property. It looks to me like you can’t get to the Rezko property from the street (ergo, no driveway to the Rezko property). When (if) Rezko turns to sell his property the title company and probably the City will need some showing that the property is accesible from the street (or else its value plummets)and any third party bona fide purchaser will need this showing as well. And by extensoion this makes the value of Obama’s property that much higher because it will be his land that will either be sold outright or sold for easement purposes in order to access the Rezko land.
Plus, Rezko was familiar with the property for a number of years and knew Obama since the early ’90’s. If, If, If Rezko knew the developer/owner of the two parcels and contacted him before Obama did (as Obama indicates could have happened since his memory is unclear) maybe Rezko told the owner “you take 300,000 less on the house and I’ll give you full price on the lot behind it.” And the lot may be valueless if you can’t get an easement to the street.
Obama gets a $300,000 discount — thanks to Rezko — and the developer/owner sells both lots in quick fashion without a headache as to the land-locked property.
We need to know more about the easments and ingress/egress and we need to know who first came up with the idea to sell the lots in this fashion. But it certainly is a strange way to orchestrate a sale. And who gives a crap about a $14,000 fence.
Kass is an idiot, with no moral compass when it comes to politics. Royko would have understood what Obama did; Kass probably never will.
You didn’t say what Byrne wrote that was incorrect.
The foggy part here is whether the Rezko property is accessible only through the Obama property. The articles seem to suggest that there is no ingress/egress except through the Obama property, which means there is no street access to the Rezko property. This makes the Rezko property effectively useless to anyone but Obama or any other bona fide third party purchaser prior to Obama.
But the parcels were divided pre-sale. Why would a seller divide the property in such a way (and then sell it in two separate parcels) so as to block access to the back lot? Any subsequent seller of the back lot (if he’s different than the owner of the front lot) will have to submit paperwork to the title company, lender and probably the City
establishing the ingress and egress route to the back lot. If there are none, this makes the Obama property that much more valuable– since he can set his price to either sell a swath of land or sell an easement to get to the back lot.
Plus, Obama cannot remember who contacted who for the sale. Suppose (and it is necessarily possible due to Obama’s inability to remember) that Rezko contacted the previous owner and told him to drop the Obama price by $300,000 and Rezko will agree to buy the back lot at full price, which is certainly worth far less than $625,000 IF there is no ingress or egress. Without access to the back lot, that property is useless and non-negotiable on the market. Why would Rezko do this, and why would the seller divide the property in such a foolish manner.
Under that reading, it looks like a gift to Obama for $300,000 and the initial owner gets full price on a useless piece of property, or at least a piece of property with a major barrier to marlketability except to the owner of the front lot. Of course, any subsequent owner of the front lot can name his price to purchase the back lot in the future.
This is an important detail which must be clarified.
It’s in a previous post below