CHA gave $76M deal to movie studio head’s group while he was an FBI mole

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While secretly recording conversations to help the FBI expose an extortion scheme run by longtime Chicago Teamsters union boss John T. Coli Sr., the president of Chicago’s largest movie studio, Alexander S. Pissios, also had a starring role in another production that could bring him and his partners millions of dollars.

Pissios’ Cinespace Chicago Film Studios teamed with public housing manager The Habitat Co. and Mount Sinai Hospital on a development in North Lawndale, getting the Chicago Housing Authority to approve their proposal for a $76 million development on Ogden Avenue including stores, offices and homes.

Records show Pissios and his partners stand to share in more than $4 million in fees for developing nearly 11 acres that includes CHA land and also property that Cinespace and the not-for-profit hospital bought from City Hall during Mayor Rahm Emanuel’s administration.

Pissios and his partners put that plan together during the months-long period he was secretly working with the U.S. attorney’s office in Chicago to investigate Coli, hoping that would keep him and his wife from being charged with bankruptcy fraud.

The Pissios group submitted its plan to the CHA on March 22, 2017.

Nine days later, the U.S. attorney’s office gave him a non-prosecution deal, guaranteeing he would face no criminal charges, in exchange for helping them in the Coli investigation.

It’s unclear whether the authorities eavesdropped on any of Pissios’ conversations regarding the development project or were listening only to his conversations with Coli.

CHA and Mount Sinai officials say they haven’t been contacted by federal authorities regarding Pissios. Habitat executives won’t talk about Pissios or their project. Pissios didn’t return messages.

Last month, a few days before Christmas, the Pissios group wrapped up a $21.78 million financing package for the initial phase of the CHA project, records show. This part of the housing authority development, which won’t include any homes, will build new offices for Cinespace and Mount Sinai. Pissios has been a member of the hospital’s board since 2013.

The housing authority is helping finance the project, which is getting federal tax incentives and $2.5 million from City Hall’s “Neighborhood Opportunity Fund,” money that Emanuel pledged before leaving office last year.

That taxpayer funding is the latest in a string of government subsidies Pissios has gotten over the past decade despite his financial and legal problems.

He got $27.3 million in state grants under Gov. Pat Quinn to help his uncle launch the West Side movie studio.

Later, Emanuel helped the studio get a property tax cut worth as much as $3.4 million. He also gave the studio permission to close off and take over city streets to create a bigger Cinespace campus, forcing traffic, including CTA buses, to be rerouted.

The studio secured most of that government funding with help from Coli — a powerful union supporter of Quinn and Emanuel — who had been extorting money from Pissios during the time the studio boss was wearing a wire.

Coli pleaded guilty last summer to extorting $325,000 from Cinespace and agreed to cooperate with federal authorities. That means Pissios won’t have to testify as the star prosecution witness at his trial.

Pissios’ name also has surfaced in the ongoing federal investigation of the collapse of Washington Federal Bank for Savings, which was shut down in December 2017, days after bank president John Gembara was found hanged in the bedroom of a customer’s home in Park Ridge.

When Pissios filed for bankruptcy in 2011, he owed the clout-heavy Bridgeport bank millions of dollars from real estate loans. It’s unclear whether Pissios ever repaid those loans.

Also unclear: how Pissios became a partner with Mount Sinai and with Habitat, which is headed by developer Daniel Levin, who, under a federal court order, had overseen the CHA’s scattered-site housing program for 23 years.

Mount Sinai vice president James Bicak says the CHA encouraged the hospital to team with Habitat on the commercial and residential development, which is near the hospital. But hospital and CHA officials say they didn’t know who exactly recommended the partnership.

Emanuel has strong ties to Mount Sinai, where his late father, Dr. Benjamin Emanuel, did his medical residency. The hospital was founded in 1919 by a grandfather of Steven Koch, who was on the hospital’s board for 24 years, the last seven of them as chairman. He resigned that post when he became Emanuel’s deputy mayor in 2012.

The former mayor says he has not been contacted by federal authorities regarding Pissios or Coli.

The CHA’s board, appointed by Emanuel, selected the Habitat, Cinespace and Mount Sinai team in June 2017 even though it gave the group a slightly lower score than it gave Brinshore Development, which also had bid for the work. CHA officials said they liked that Habitat was working with two major employers in the neighborhood — Cinespace and Mount Sinai — and that their proposal would encompass an extra 5.5 acres, including land they bought from the city.

Among the CHA board members who approved the deal was John Hooker, who resigned as chairman last summer, as his lobbying work for ComEd had become part of a federal corruption investigation centering on Illinois House Speaker Michael Madigan, D-Chicago.

The CHA board also included vice chairman Craig Chico, brother of former mayoral candidate Gery Chico. Gery Chico’s law firm Chico & Nunes is working for the Habitat, Cinespace and Mount Sinai partnership.

“CHA’s legal department and ethics officer have determined that there was no conflict because vice chair Chico did not stand to derive any financial benefit, directly or indirectly, from the law firm’s role as a retained party,” according to CHA spokeswoman Molly Sullivan.