Ford dealer, held up by politics, gives Chicago a deadline

Greg Hinz reports on politics for Crain's Chicago Business, a sister publication of Automotive News.

The developers of a huge Ford dealership proposed for Chicago's North Side are giving Chicago politicians until the end of next month to quit futzing around with their zoning application or risk losing an investment worth more than $50 million in the city.

"Oct. 1 is the final deadline," Monica Sekulich, general counsel at Fox Motors, told me in a phone conversation. "This entire situation has been quite surprising to us."

Here's the story:

According to Alderman Scott Waguespack, he was approached early this year by representatives of FMG Holdings, which operates Ford dealerships under the name Fox Motors near its home in Grand Rapids, Mich. Fox wanted Waguespack to back its plan to spend $57 million to restore an old industrial site near Elston and Fullerton avenues in his ward and build a 102,000-square-foot dealership that would employ about 200 people. The dealership would replace a defunct one at 22nd Street and Michigan Avenue.

After checking with the neighbors, Waguespack quickly said yes, rejecting only Fox's request for a tax-increment financing subsidy. The site is largely empty, home to only a "crumbling" warehouse and a couple of smaller structures, he says. "We thought this was a pretty good idea."

Fox won approval for its zoning request from the Chicago Plan Commission in June. But that's where trouble cropped up. Aldermen whose wards are predominantly Hispanic -- including Edward Burke, Dick Mell and Danny Solis, chairman of the City Council's Latino Caucus -- wanted to know what Ford had done to put dealerships in the hands of Hispanic owners.

A series of meetings occurred. Nothing was resolved. So when Fox's request moved to the City Council Committee on Zoning, which Solis also chairs, it was tabled -- twice.

Solis says Ford has no Hispanic-owned dealerships in the metropolitan area. "We want some form of commitment from Ford," he says. "Ford should be sensitive to giving a fair shake to the Hispanic community."

I'm all for sensitivity. Ford's statement to me -- "We are committed to identifying and considering minority candidates whenever possible in the buy-sell process" -- could be viewed as a bit lacking.

But as long as we're talking about "sensitivity," you ought to be sensitive to a particularly Chicago twist to this tale. Solis and the caucus have been talking to Ford not just about a dealership for any Latino but for one in particular: Jose Diaz, whose family used to own a Chrysler dealership in Miami and who, according to friends, maintains dual residences here and in Florida.

Diaz, who didn't return a call for comment, has been talking to Latino aldermen about running a franchise 5 miles west of the 32nd Ward location. And, in the Chicago tradition, he not only has been talking but giving, donating $6,800 to Solis' 25th Ward Regular Democratic Organization in the past three years, and a few hundred to a couple of other Latino aldermen. That's major coin in their world.

Solis says there's no connection and that some of the money arrived before Fox submitted its zoning application.

Anyhow, Sekulich says the firm will rely on promises from Mayor Rahm Emanuel's office that its zoning application will come up for a committee vote on Sept. 4 and in the full council later that month.

Sekulich was diplomatic about it all. But she confirms that given the City Council stall, Fox had to extend a purchase option on the property that was due to expire on Aug. 1. That's going to be the last extension, she indicated.

"From our experience, when you go through zoning, it has to do with whether you're complying with the law," Sekulich said. "We're frustrated by the [Chicago] process. But we're optimists. ... We are excited about doing this deal."

Fox now apparently has discovered the real law of Chicago politics: Let no outstretched palm go unfilled.

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