Sun-Times probe fails to present how real estate development markets work

I write in response to the Sept. 14 SunTimes article “Chicago pension fiasco: $54M lost on deal with Daley nephew, ex-Obama boss” by Tim Novak. The story recycles prior stories and distorts what really happened. Worse, it ignores the market context in which the pension losses occurred.

First, the piece disregards the national trend that public pension funds had turned to real estate to compensate for lower contributions from state and municipal

partners. As they looked for new ways to maximize returns, pension funds were questioning their traditional reluctance to invest in property.

Second, many officials across the country believed public pension funds could and should be used to assist in the re-development of major urban areas, which in turn would provide jobs and opportunities for workers.

It’s ironic that the Sun-Times chose to run this piece close to the 10th Anniversary of the Lehman Brothers bankruptcy; the piece fails to recognize the market-wide impact of the “Great Recession.” But according to the

Sun-Times, losing money in real estate 10 years ago stood out as remarkable. Not until the story’s 24th paragraph does the piece even suggest a broader market downturn.

The story never recounts the extensive development experience of both Robert G. Vanecko and Allison S. Davis, either. Jim Houlihan, former Cook County assessor