Comments ( 17 )

• I don’t know how much additional government intervention is needed – I think that consumers just need to do more homework on the developers and contractors they choose to do business with…

• Unless things have changed since I was in the business (20-some years ago), far too many city inspectors inspect envelopes handed to them by sub-contractors and don’t inspect anything else.

  Anyone have any current knowledge of whether that’s still going on?

• Oh, Joe, I dunno…do cops still appreciate the bills that are wrapped around drivers licenses as “pre-payment” on fines?

• I like the cop Royko used to write about, he had his special variation on the theme, where he’d pull you over, state that he sold $5 pencils, $10 pencils, and $20 pencils, and then suggest that the motorist should buy one of those (theoretically based on the violation, or theoretical violation!).

• That isn’t going on anymore. If anyone remembers the scandal of a few years ago involving Andy Ryan, the 6 year old carpenter his dad’s union pushed through to the post of inspector, Kadabarek “resigned,” they’ll also remember that Daley hired some guy named Hoffman to set people up and make local government look good. Just the other day, they fired some Polish-sounding fellow for getting signatures for Daley while on the job for the city. Guy is screwed. Will probably even lose his pension. Before you say it has nothing to do with inspectors, it does. They have people on the payroll out trying to trap people in bribes. They’re doing it in every department. If anyone is taking bribes, you will hear about it. The city will catch them. The FBI is all over the place, talking to anyone and everyone right now about how they got their jobs. People are living in a constant state of fear. Again, if people are taking bribes of any kind, they will be caught and put in the papers, courtesy of the city’s PR people.

  I also happen to know a couple of people who are inspectors and a couple who left. There’s a lot of problems over there, greed isn’t one of them. It’s the fact that 80% of them are incompetent.

• so woodlawn i guess everything is now ok and fitzgerald should just pack up and go home. Bribes are being taken everyday by all different types of people. Does Arenda Troutman ring a bell?

• Arenda Troutman is a moron NSH. I have more faith in the kid who took up the craft of carpentry before Jesus.

• skeptic, Carter

  Does that still happen? When I was new to Chicago I was pulled over on the Outer Drive by a cop who asked for my driver’s license.

  I didn’t do it the Chicago way, so he grabbed my wallet, took out a $20, folded it behind the license, handed himself the license face up with the $20 underneath by way of illustration.

  I never did hand my license to a cop the proper way – always afraid I’d hand it Chicago-style to an honest one.

• I’d imagine not, it seems like the stuff you hear about more is a bit more large scale, cops shaking down drug dealers, etc. But I doubt that happens all that often.

• City construction inspectors have been put there by the unions to support union concerns.

• Sam, do you research what you write? You are clueless. Buyers have do not have a say on what contractors are used by the developers, and usually would not know until the construction is complete. Even if a buyer did know know who their developer contractors are, they legally could not protest. Get a clue.

  Yes, buyers & their associations doing more inspections is important, but you miss the issue and the root cause. The developers.

  The issue is developers (some held in high regard by you), doing shotty, incomplete, or work with serious flaws, with no consequences from govt or city regulators. They then hide behind the LLC, change names or LLC on the next project, (sometimes while the problems of their other developments are fresh), and move on to the next job, leaving the mess for the Buyers and courts to clean-up.

  Case in point, 221 E. Cullerton (Legacy – William Warman partner) had a great deal of facade problems within a year that owners had to special assess to repair. Developer then moves to tower on Prairie, now with major window problems; Legacy splits up, and now Warman is doing project at 21st and Calumet called Chess Lofts, while Warman has again changed his company name to “Provence Development LTD” for this project.

  As an example, here are just a few of Warman’s name changes, and this does not even include all the individual development LLC names, from the State Incorporation data base.

  Entity Name: PROVENCE DEVELOPMENT GROUP, LTD.
  Assumed Name: INACTIVE – WARMAN DEVELOPMENT &
  DESIGN
  Old Corp Name: 04/11/1989 – WARMAN &
  ASSOCIATES LTD.
  01/03/2007 – WARMAN OLSEN WARMAN, LTD
  Legacy Development

  Here is an article on examples of the issues with this developer:

  http://www.jsonline.com/story/index.aspx?id=377046&format=print

• Sigh!

  So much ignorance; so little time.

  The developer’s lenders have a huge stake – a lot bigger than any buyer’s – in ensuring that coontractors are capable and do the work specified in accordance with specifications. They’ve developed a variety of institutional mechanisms to ensure tha happens, and in most cases it does. Contractors police the work of their subcontractors, because they have liability for it. Etc. Etc. Etc.

  The name of the general contractor is a part of the city-mandated (on most projects) property report. Not hidden. It’s also frequently displayed prominently at the construction site.

  Some of you want to pretend that these safeguards don’t exist or are meaningless. They exist, and they’re not.

  The argument that developers are doing something dishonest or shady by using multiple LLCs is nonsense. They don’t always have the same investors or lenders, and what investor or lender in his right mind would expose his money to the risks of another project? And, if a developer chooses to limit his liability this way, so what? It’s disclosed and the buyer can assess whatever risks are associated with it.

  Facade problems, Jeffery. Show me what the developer promised to do or was required by law to do, and didn’t do. In the absence of that, your examaple is just another baseless rant.

• So then, with all your points on safeguards, etc. you still have not explained why all the problems are happening. Is it the buyers fault the buildings have large problems?

  When going under contract, rare is it to know the GC years in advance. Many times the GC’s change by the time construction permits are approved , especially on the mid-size projects and conversions. Large projects work more in partnership with GC’s, so it is more common to have those contracts in place.

  On top of that, the most important are the subs, which are not known when a contract is written.

  And please, as you claim to have been an attorney for developers, you have not answered the question as to what your expectations for issues like facade problems should be.

  Your comment, “Show me what the developer promised to do or was required by law to do, and didn’t do”, is exactly the prevailing attitude for many developers. Do the bare minimum to be legal, not do what is expected, to provide a quality job. There are quality problems all over and you fail to accept that, and brush it off as a legal issue.

  Among the problems is that there no minimum legistative standard (recommended inspection reqts, recommended life cycle requirements, etc.) for facade. Finally, in many cases it took the city critical facade inspections to show how shoddy the work was.

  To prepare the property report, in most cases, the facade inspection is completed by a developer hired inspector, mostly basic visual techniques.

  Unfortunately they do not take into effect any destructive techniques to confirm sub-system structural integrity, mortar conditions, or historical observations.

  The developers then work to the scope they develop, not the scope of what is needed. Inspection is very conservative, and by the time a few years later when the development is near completion, damage during construction, poor engineered water joint design or the impact of installing a bunch of balconies and windows take its toll.

  You seem to have a problem with just doing the job right. Many developers stand behind their work. Others do not.

• Hire union workers and you’ll get better quality. Yeah the price will be 10x as much but you’ll get your quality work. Hire illegal immigrants, like myself, and you’ll get shoddy work. But I only cost $8.00 an hour and better yet, the carpenter’s union won’t be breathing down your neck.

• Jeffery,

  You’re both putting words in my mouth and not giving full attention to the words coming out of my mouth.

  I have no problem with “doing the job right.”

  We just differ on what’s right, and what percentage of developers do what’s right.

  You say a developer should do “what’s expected.” I say a developer can’t know what an unknown and unknowable group of buyers expects, and he should do what he agreed to do.

  Of course some of the problems are due to people cutting corners. You seem to want to duck the real source of many, the “s..t happens” rule, which is an inescapable fact of life in real estate development.

  Buyers can’t analyze subs. General contractors can. Focus on who the GC is, and his track record.

  I’d recommend that buyers look at the track record of the developer, the GC, and the architect, but especially the developer. If the developer has a strong track record, that’s your best safeguard against problems.

  As to property report disclosures, the building report is generally prepared by a licensed architect or engineer. They’re not all whores – few of them are. They have professional reputations to preserve, and they act honestly and with integrity for the most part. Strong developers hire pros because they don’t want any surprises either. The lenders don’t want any surprises. The investors don’t want surprises. The general contractor and the subs don’t want surprises. All of the players in the process (and there are many more than I’ve named) need to understand what they’ve agreed to do, and many of them will push back heavily on a developer who tries to cut corners, and many will refuse to take the job because their reputation – and their wallets – are on the line too.

  For every developer who cuts a corner in a shady fashion, I’d argue that there are several more who eat the cost of not cutting it, even apart from their contractual liability, because it’s the right thing to do. Been there. Seen that. Done that.

• Your point about tracking the developer and contractor, GC, Architect I agree with. The question is what is the best way to do this openly, with transparency? For people like you and I who are willing to do the research and know where to find some of the data, it is tough enough. The legal name tracking is tough enough, as many developments are performed under multiple LLC’s, and that is who is sued, no?

  Also, I have found that some people are unwilling to let their story be heard, as they think it will hurt their resale or impact their proceedings (cut their losses and move on). In the worst sitution I went through, on the association side it was a battle between the short timers & investors (settle now and sell) vs. the long term residents (sue).

  Regarding the Times article, I drive buy the 1610 S. Indiana – Lake Side Lofts building all the time; it is amazing the difference now after the association had to repair the facade. That is what the building should have looked like all the time. I wish I had the before and after photos, because they did do a great job. Of course for $4MM, it should be nice. Sadly it probably would have cost the developer 1/4 of that if it was done from the start.

• Jeffery,

  You ask a very good question (which I’ll paraphrase). What’s the best way for a time-starved buyer to get a grip on the likelihood of future problems / surprises in purchasing new construction?

  It merits a more thoughtful answer than I can give at this time. I will make a stab at answering it, and will try to post the answer in a way that our visitors can easily find, and that people can supplement. Stay tuned.