A weather-beaten brick warehouse across Dixie Highway from the Harvey Police Department is all that’s left of the specialty manufacturing and packaging company that once operated there.
The worn-out building, which sits recessed from the street on a desolate 14-acre lot of cracked concrete and gravel, is central to a lawsuit recently brought against the city by a frozen foods manufacturer.
But even before American Kitchen Delights, Inc. sued the city for its alleged illegal seizure of the property in January, the parcel and its redevelopment were of vital interest to Donald Luster, a self-described administrative consultant to Harvey Mayor Eric Kellogg, recently unsealed court documents reveal.
Luster, a twice-convicted felon who resigned as mayor of Dixmoor in 2004 after being found guilty of fraud, was secretly recorded in 2016 discussing a plan to transfer ownership of the unkept lot to a developer in exchange for a $100,000 bribe, an FBI agent’s affidavit for a search warrant states.
The negotiations over the property, which were secretly recorded by former Harvey Comptroller Joseph Letke, are described in detail in the search warrant affidavit, which is dated July 6, 2017.
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Letke, who had been implicated in “a scheme to divert municipal bond proceeds from the City of Harvey for improper purposes,” was cooperating with the FBI in hope of receiving a reduced sentence upon his eventual conviction, according to the affidavit.
His recordings, made between March and August 2016 when he committed suicide, lay out a plan in which Luster, who claimed to have influence over economic development in Harvey, agreed to direct Kellogg to condemn the Dixie Highway property, forgive the substantial taxes owed on it and convey it to a developer in exchange for at least $100,000, the affidavit states.
“As long as I can justify that it will be self-sustaining, in and of itself,” he told the developer, “I can get anything done that I want.”
Luster could not be reached for comment for this article, but previously denied any wrongdoing when reached by the baiduhai, and told a reporter he had no influence, whatsoever, on Kellogg. He has not been charged with a crime.
A Harvey city spokesman did not return multiple requests for comment on Luster’s work for the city and its involvement with the Dixie Highway property.
At the time when Luster was allegedly soliciting bribes for the property, it was believed to have been owned by Dwayne Carter, whose RMX Entertainment Group had in May 2013 entered into an agreement with Harvey to purchase and redevelop the vacant lot.
According to the redevelopment agreement, Carter agreed to invest $1.5 million to build a “family entertainment center,” on the property. In exchange, the city would reimburse him $750,000 from a tax increment financing fund.
He would receive $350,000 of the reimbursement when he closed on the property — property records show he bought it for $270,000 — and another $400,000 within six months of completion of Phase I of the project.
Because the phases of the project are not addressed anywhere in the 21-page agreement, it’s not clear what the completion of Phase I entailed, nor whether Carter ever got paid by the city.
Regardless, the project was not completed.
Three years passed and around $300,000 in past due taxes had accumulated by the time Luster was recorded plotting to transfer ownership of the property to a developer in 2016, records show.
Ron Finlay, a businessman connected to the former Adrianna’s nightclub in Markham, approached Luster in May 2016 with a plan to turn the property into a transportation hub for Arka Express, a Markham-based trucking company operated by Arnold Kozys, according to the affidavit.
Over the ensuing months, the parties negotiated the transaction and ultimately reached an agreement, according to the affidavit.
Finlay and Kozys would pay Luster and Letke $100,000 to secure official action from the city, and in return, Luster would exercise his influence with the mayor to get Carter’s property condemned and conveyed to Kozys, court documents state.
“What I’m lookin’ for is, is, is to send this through the washing machine and come back clean with a piece of property,” Finlay told Luster, a reference to having the property’s outstanding taxes forgiven, according to the affidavit.
Luster, a self-described reverend, replied, “Amen,” court documents state.
Finlay could not be reached for comment for this article and Kozys did not return a request for comment.
Their alleged deal was struck in early August 2016.
Shortly after the deal, Luster told Letke that he’d received a $5,000 check signed by Kozys that was to act as a retainer until the deal was finalized. Bank records show the check was deposited into Luster’s company bank account the same day, the affidavit states.
Luster told Letke later that month that he’d asked Harvey officials to fast track the condemnation process.
“I’ve had five meetings about this. Five meetings…,” he said, according to the affidavit.
Two weeks later, however, Letke was dead. Authorities discovered a five-page note at the scene they believe he wrote, and determined he’d killed himself with a 9mm handgun.
After his death, the development deal he’d been helping the feds keep tabs on went cold. Federal agents believe someone tipped off Luster that Letke had been acting as an informant.
“Since (Letke’s) death…investigators have not seen any actions taken on the Dwayne Carter property,” the agent wrote in his sworn affidavit. “I believe there is a fair probability that Luster, Finlay, and others intentionally refrained from taking further action after learning that (Letke) was cooperating with the FBI.”
On July 17, 2017, less than two weeks after the affidavit was filed, the Cook County Land Bank Authority bought Carter property’s taxes at scavenger sale through the “no cash bid” process. Through a no cash bid purchase, the land bank can acquire the tax lien at no cost, as long as there are no bidders willing to pay more than the delinquency amount, explained Tatia Gibbons, the county clerk’s director of real estate and tax services. In this case, the property’s delinquencies and penalties exceeded $1 million, she said.
Once the land bank enters a no cash bid, the property owner has a period of time within which to redeem the property’s back taxes or risk losing title. If the owner does not redeem the taxes in time, the land bank can proceed to obtain title to the property or transfer it to a developer, nonprofit or municipality that expresses interest in redeveloping it, said Rob Rose, the land bank’s executive director.
None of that can take place, however, until the owner’s redemption period has expired.
The redemption period for the Carter property is not until Nov. 15, 2018, which means that for the time being the property title has not changed hands, and neither the land bank nor any other entity eyeing the property can legally take control of it, Rose said.
But back in November, the city council, citing its no cash bid application to Cook County, passed a resolution to transfer ownership of the Carter property to a developer identified as Dixie Inc., according to meeting minutes.
The resolution states that Dixie Inc. had submitted a proposal to redevelop the parcel and agreed to enter into a redevelopment agreement with the city.
“They intend to make the property presentable by revitalizing the property for business expansion,” the resolution, which passed 4-3, states.
Walid Diab, of Oak Lawn, is Dixie Inc.’s president, according to documents filed with the city. The forms list Diab and two other men as registered agents who have agreed to invest a combined $1.3 million into the Dixie Highway property.
While the Illinois Secretary of State’s office has no record of a registered active business with the name Dixie Inc., it does have a listing for Dixie Auto Recycling Inc., an alternate name used on certificates of investment the three men filed with the city.
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Dixie Auto Recycling, incorporated last May, is registered with the state to Wail Ziyad, a businessman from Bridgeview whose name does not appear on documents filed with Harvey, online records show.
A few weeks after Harvey passed the resolution transferring the property to Dixie Inc., a man named Shahnawaz Hasan who had apparently quietly acquired the property from Carter in early 2016, but had not recorded the transaction with the county, spotted a man driving a truck on the property, according to a lawsuit Hasan filed over the property in January.
The man in the truck, identified in court papers as Ziyad, told Hasan the city had granted him ownership of the parcel, the suit states.
Hasan, the owner and president of American Kitchen Delights, Inc., a frozen foods manufacturer that has operated a facility in Harvey for decades, told Ziyad to get off his property and never return, according to the suit.
Ten days later, the suit alleges, someone broke the locks on the building’s doors and replaced them with new locks.
When Hasan and his attorneys returned to the property with a copy of the deed later that month, Ziyad met them — joined by Luster and Derrick Muhammad, the mayor’s brother — to contest his right to the parcel.
Unable to resolve the property dispute, Hasan took the city to court.
His 10-count complaint, filed Jan. 16, alleges intentional trespass, tortious interference, civil conspiracy and willful violation of the Illinois Freedom of Information Act.
The suit claims the lockout kept Hasan from processing a customer’s order — resulting in the loss of that customer and an estimated $1 million in business — and prevented him from accessing the more than $2 million of inventory he had stored inside the warehouse on the property.
A judge swiftly granted American Kitchen’s motion for a temporary restraining order barring Ziyad, Luster, the city of Harvey and any of its representatives from entering or possessing the company’s properties, and prohibiting them from removing, possessing or interfering with the inventory stored at those addresses.
The order was promptly violated, Hasan‘s attorneys allege.
According to an emergency petition for rule to show cause, a construction contractor working for Ziyad, whose bulldozer, dump truck and other vehicles had been parked outside the property, “used the heavy equipment to cause extensive damage to the real property.”
The emergency petition, filed Jan. 25, asks the court why Harvey and the individually named defendants should not be held in civil contempt for violating the court’s temporary restraining order.
They claim the contractor, whose equipment was identified as belonging to Chicago Building and Development Group LLC in Bridgeview, bulldozed an access road to block entry to the main entrance of the property and piled dirt and concrete in front of doors on two sides of the building to prevent American Kitchen Delights from accessing it.
The hearing on that matter is still pending.
Twitter @ZakKoeske