OK, get comfortable. This is a long one, but a good one.
The Sanborn map above shows a block in the old Market district at the SW corner of the Loop. The manufacturing and warehousing buildings on that block persisted even as the wholesale market moved to its current site on the southwest side beginning in the 1940s, but largely fell into disrepair. In the 1960s, a trio of investors calling themselves Fleetwood Realty began quietly buying lots on the block, trying to assemble a large enough parcel to sell to a prospective developer or corporation. Insurance companies and other large corporations had been building on Wacker Drive (Market Street in the map above) since the mid-1950s; America Fore, Mutual Trust, Sinclair Oil all built headquarters on the boulevard. Hartford Insurance built two. More investment came with the Gateway Center buildings across the River and U.S. Gypsum’s rotated crystalline extravaganza in 1963-65. Fleetwood’s acquisitions were well-considered–the site was within walking distance of Union and Northwestern Stations to the west, the El loop to the east, and Congress Expressway to the south.
Fleetwood Realty was actually a partnership between Bernard Feinberg, president of Jefferson State Bank, a small Chicago institution, and two lawyers-turned-realtors, Albert Rubenstein and Philip Teinowitz. Feinberg was a business associate of Alderman Thomas Keane, widely regarded as Mayor Daley’s closest ally and as the “second most powerful man in Chicago.” As the Sun Times put it, where Daley was interested in power, Keane was interested in money, and in addition to mastering the rules and tactics of City Council, Keane masterfully blurred the lines between city business and personal profit.
In 1967, Feinberg and his partners announced that Greyhound would buy the southern half of their block to build a new bus terminal, replacing their aging structure in the central Loop. With direct connections to the expressway, the site made sense, but it faced one ten-foot-wide obstacle. If you look closely at the Sanborn map, you can see that there’s a north-south alley that splits the block between Quincy and Jackson. That was a city alley, meaning that it required a city council resolution to vacate it and sell it to Fleetwood. That all happened in January 1968 but under unusual circumstances. Usually, such actions were introduced by the alderman representing the ward where the land in question actually was. But, in this case, the resolution was put forward not by the 1st Ward Alderman, Donald Parillo, but instead by 25th Ward Alderman Vito Marzullo. Marzullo, too, was one of Daley’s staunchest allies; he represented his west-side ward for 30 years and was famous for inventing the phrase “all politics are local.” Parillo insisted that any sale of the alley should have been cleared by him. Marzullo claimed that he had only introduced it because Parillo had been absent from that council meeting, and Parillo pointed out that he hadn’t ever actually missed a meeting, meaning that Marzullo’s resolution had, in fact, never been formally presented. Feinberg bought the alley for $27,000, or about $12 per square foot, a fire sale price, and Parillo resigned from the city council in disgust. Later, the city estimated that the alley had actually been worth $68,000, but allowed the deal to stand nevertheless.
The Greyhound deal ended up falling through, but Fleetwood did manage to sell the site. New York realtors Cushman and Wakefield approached Feinberg with a risky offer in 1969. If the trio could also acquire the north half of the site within six months, they would purchase the entire block for a corporate client looking to build a 2 million-square-foot headquarters building. Fleetwood took the gamble, buying options on lots on the north side of the block, negotiating successfully for the last lot with only a month to spare.
The client, as you may have figured, was Sears, and in addition to their 2 million square feet, the whole-block site meant that they could also build 2 million square feet of speculative office space on top of their new headquarters. But Sears, too, had to buy an alley from the city–in this case, Quincy Street. They did so, with little objection and, again, at a price well below market value.
Sixteen days after the sale of the alley to Feinberg, Keane and his brother, George, mysteriously acquired 475 shares of Jefferson State Bank. Cook County Board Commissioner Harry Semrow also received 25 shares.
OK. Quick intermission.
And now, Act II.
Fast forward to 1972. Feinberg and Jefferson State Bank bought and demolished two buildings along Wells St., north of Monroe, and built the 23-story American Surety building in their place. (Jenney’s First Leiter Store stood on this corner, but it was demolished in 1931). The building is a fairly anonymous one–an infilled concrete frame done by Los Angeles firm Welton Becket. But it proved to be the undoing of Feinberg and, in part, of Keane. The two structures on the site were demolished in 1972, but it emerged that their permit was forged to suggest that they had been wrecked in 1971, saving Feinberg a year’s worth of county taxes. The Chairman of the Cook County Board of Appeals, which handled tax disputes? George Keane. Also on the Board? Harry Semrow. Both shareholders of the Jefferson State Bank.
No Chicago jury would have convicted any of the key players for this sort of business-as-usual stuff, but the Feds went after Thomas Keane for a range of similar corrupt practices, ultimately convicting him and Feinberg of mail fraud, since the forged demolition permits had been sent via post. Keane was also convicted of steering public funds to Jefferson–he served 22 months, Feinberg served four.
OK, now a coda.
While Keane and Feinberg were in prison, another Jefferson State Bank project 2 N. La Salle, got another sweetheart deal. In the photo above, you can see that there’s a substantial setback between 2 N. La Salle (the white-skinned building) and 30 N. La Salle, the more sinister looking one, which is what Chicago got on the site of Sullivan’s Stock Exchange, but that’s another post. There had been a zoning provision for new construction on La Salle that required a 20-foot setback, as the city’s Bureau of Street Traffic planned to widen La Salle at some point–the idea being that, as all of the obsolete structures on the street were inevitably torn down and replaced with new towers, they’d end up with plenty of room to add high-speed lanes. (Let that sink in–it would have included the Rookery, Jenney’s New York Life, and the Field Building…) 30 N. La Salle complied with the setback but, “somehow,” Feinberg’s 2 N. La Salle got a waiver, despite the Bureau of Street Traffic’s objections, meaning that with one zoning appeal the entire La Salle Street widening project was (thankfully) dead. Alderman Ed Vrdolyak tried to repeal the variance, noting that the jailed Feinberg had quickly transferred land ownership to his brother on entering prison, but Keane’s influence, even from behind bars, was significant, and you can see the results on La Salle Street today.
Feinberg resumed his real estate business after emerging from prison. Both he and Keane remained active in Chicago politics, though not in any official capacity. Feinberg died in 1980, Keane in 1996.
“Council Committee to Study High Rise Zoning Request.” Chicago Tribune (1963-1996), Mar 04, 1971.
“SALE OF ALLEY TO DEVELOPER IS DEFENDED.” Chicago Tribune (1963-1996), Feb 15, 1968.
“The World’s Tallest: Saga of a Chicago Skyscraper: World’s Tallest: Skyscraper’s Saga.” New York Times (1923-Current File), Oct 18, 1970.
“Vrdolyak Hits Loop Zoning OK.” Chicago Tribune (1963-1996), Jul 30, 1977.
Brodt, Bonita. “How Time, Law Dealt with Political Criminals: How Time, Law Dealt with Political Criminals.” Chicago Tribune (1963-1996), Feb 07, 1980.
Honchar, Cornelia. “Keane, Others in Clout Quiz.” Chicago Tribune (1963-1996), Apr 01, 1973.
Kifner, John “Investigation of Chicago’s no. 2 Democrat Appears to Pose a Serious. Threat to the Daley Machine: Called by Grand Jury First News Conference Brother Quit Post.” New York Times (1923-Current File), Apr 08, 1973.
Nagelberg, Alvin. “GREYHOUND PLAN FOR NEW DEPOT TOLD: WILL SELL PRESENT TERMINAL.” Chicago Tribune (1963-1996), Jun 20, 1967.
———. “PLAN GARAGE NEAR LOOP ON ENTIRE BLOCK: EXPECT WORK TO BEGIN SOON.” Chicago Tribune (1963-1996), Jul 27, 1965.
———. “Plan New 23-Story Building in Loop.” Chicago Tribune (1963-1996), Jan 27, 1972.
Phillips, Richard. “On Four Counts: Find Keane Pal Guilty of Fraud.” Chicago Tribune (1963-1996), Jun 28, 1975.
Schreiber, Edward. “ALDERMAN QUITS POST, GOES SKIING: PARRILLO GIVES NO EXPLANATION.” Chicago Tribune (1963-1996), Feb 17, 1968.