Obama’s Former Boss Pushes Hotel Plan Near Obama Center

Nearly two decades after a risky real estate venture saddled Chicago’s public pension funds with millions of dollars in losses, one of the developers at the center of that saga is back at City Hall — this time with plans for a hotel near the Obama Presidential Center.

Allison S. Davis, the former boss of Barack Obama who hired the future president fresh out of law school, is seeking to buy two city-owned lots for a proposed 28-story, 250-key hotel at 6402 South Stony Island Avenue, according to the Chicago Sun-Times. The site sits a few blocks south of the future presidential center, a corridor many developers are betting will see a tourism bump when it opens next year.

The deal is moving forward even as Davis, who is now 85 and was a prolific developer during Richard M. Daley’s mayoralty, owes the city millions. He is on the hook for a $6 million mortgage issued by the Daley administration in 2002 to finance Auburn Commons at 1626 West 87th Street, a senior housing complex on the South Side, the outlet reported.

Davis also owes more than $270,000 in unpaid property taxes on the project, along with thousands of dollars in water bills and roughly $360,000 in other city fees and fines, city records show.

Those obligations stem from a long and troubled real estate history. In the mid-2000s, Davis partnered with Robert G. Vanecko, Mayor Daley’s nephew, to form DV Urban Realty Partners. The only investors they secured were five Chicago pension funds, which collectively invested $68 million. The deals ultimately collapsed, leaving the funds with more than $54 million in losses — including $11 million tied to a Mariano’s-anchored project in Lakeview — even as Davis and Vanecko collected $9 million in fees. Investigations followed, but no criminal charges were filed.

Despite that track record, the Johnson administration’s Planning and Development Department agreed to sell Davis two adjacent vacant lots, estimated at about $144,000. The Chicago Plan Commission already signed off, and Alderman Desmon Yancy, whose ward includes the site, initially backed the project.

That support is now in question. Yancy told the outlet that he was unaware of the full scope of Davis’ debts to the city and pension-related history when the proposal advanced. He has since said he cannot support the sale unless those obligations are resolved, citing fiduciary concerns as the city grapples with a $1.2 billion budget gap.

Before any land sale closes, Davis must line up financing and a hotel operator. Whether lenders will look past his unpaid debts remains unclear.

— Eric Weilbacher