Power was out at an Aurora apartment building and, on June 28, a pump in the basement failed. Water streamed in, damaging electrical systems, and a fire broke out. The fire alarm system stopped working, and the building was deemed by the city to be unsafe and uninhabitable.
Ultimately, all the residents — filling more than 30 units — would lose their homes.
In the months since then, the Garfield Apartments have drawn scrutiny as former tenants, put up for a time in a hotel by the property owners, faced challenges retrieving their belongings and finding new homes.
The former property manager faces a rarely used charge from Aurora police of misdemeanor criminal housing management, after city officials alleged he allowed tenants to remain in the building even though Aurora officials had deemed it unsafe. And the building has become subject to a city nuisance case that cites at least five police reports since December 2018 for activity related to drugs, robbery and armed robbery, records show.
The building, where rent runs around $550-$650 a month, faced a slew of safety and code violations before the pump failed and the fire broke out, documents obtained by the Beacon-News show. The violations date back years, the documents show, spanning previous ownership and the past year since the building came under new ownership.
One of the two investors in the new ownership group was a company co-managed by a man with a colorful past in Chicago who was twice guilty of crimes.
John Thomas, who runs the Freedom Development Group with a partner, was convicted of federal business fraud in 2004 and 10 years later pleaded guilty to embezzlement in a south suburb of Chicago. Between the two, he served as a government mole in major investigations, including wearing a wire on political insider Antoin “Tony” Rezko, who was linked to the case that felled imprisoned former governor Rod Blagojevich.
Thomas said past headlines about him are old news, and the name of his company stands for freedom to have another chance. He said he wasn’t involved in the day-to-day operations of the building and the primary decision-makers for the property were the other investors, T2 Capital Management. Issues with the building perhaps could have been solved through better communication between his company, T2 and the city, he said.
“There was nothing criminal done there,” Thomas said. “Believe me, having had my past that I’ve had, unfortunately, I’m trying to preserve my reputation, not further enhance it. So everything we’ve done in that building and all the properties we own were fastidious, because I know eventually I’m going to be in the press about it.”
An attorney for T2 said the company is an investor in the entity that owned the building, and the property was managed by a separate company. He declined to comment further, citing ongoing litigation brought by the city.
The former property manager now facing a misdemeanor charge, Louis Giordano, is a longtime business associate of Thomas’ who served time in federal prison for fraud. He said his background, and anyone else’s, should not be held against them when they are trying to make a living.
He disagreed with the criminal housing management charge against him.
“I was doing what I was told to do,” he said.
Aurora’s Chief Development Services Officer, John Curley, said he hoped that when the buyers were initially considering purchasing the apartment building, which he described as “challenging,” they would have approached the city.
After the fire, allowing tenants to stay in the building though it was deemed unsafe was a “very sensitive and delicate topic,” he said.
“The owner of the building knew that anyone reoccupying it would not be permitted to do so,” he said. “That’s why we took them to the hearing process. We want them to comply with whatever the regulations are.”
For one tenant, the problems are nothing new. David Williams, 68, said the building elevator was in constant disrepair, and he worried about being able to get out of the building on his own. He has rods and pins in his legs, and had a hard time making it up and down the steps to his fifth-floor apartment with his cane, he said.
“I’ve been through three to four different owners, but it has always been the same problems,” he said. “But when Freedom Development Group took over, nothing ever got done. You’d always call and get a voicemail.”
A convicted felon and government mole
The multistory building on Aurora’s near west side, which for decades housed the YMCA, hulks over the other homes and low industrial buildings on the block. The building was at one point divided between the YMCA and apartments, and when the YMCA moved out in 2007 part of the building was left vacant.
The Freedom Development Group, run by Thomas and Dan Olswang, bought both pieces of the property in mid-2018, records show. Freedom and T2 then invested in another company to control the building, Thomas said. They were the sole investors, he said.
Thomas, originally named Bernard Barton, arrived in Chicago nearly two decades ago and soon after began arranging multimillion-dollar real estate deals. He pleaded guilty to federal fraud charges in New York in 2004.
Later, he wore a wire on Rezko, his former business associate, who was convicted in the federal probe that brought down Blagojevich. Thomas’s cooperation also helped lead to the conviction of a former Chicago alderman in a bribery scheme.
In 2014 he pleaded guilty to stealing more than $370,000 in taxpayer money designated for a marina project in suburban Riverdale and admitted using the money to pay off personal debts and other expenses.
Thomas said he spent his time in prison teaching classes to other inmates.
“I spent my time in prison helping people, not hurting them,” he said.
Thomas worked with Giordano, the one-time property manager at the Garfield Apartments, as far back as the 1990s.
Giordano, who said he was building manager at the Garfield Apartments from May to August, served time in federal prison for fraud. He returned to prison in 2018 for three months for violating his conditions of supervised release, records show.
Thomas said Giordano has changed.
“When he’s been with me in the last 18 months or 2 years, he’s done a great job and he has not cut any corners,” Thomas said.
Giordano now faces a midemeanor criminal housing management charge that alleges he “recklessly permitted the physical condition of that complex to remain in a condition which endangered the safety of multiple residents,” according to a criminal complaint. Police reports allege he also allowed tenants to stay in the building, though the city had deemed it unsafe and uninhabitable because of fire code violations.
Giordano said he was simply following orders.
“I was an employee,” he said. “I didn’t have the authority or the money to – there was nothing I could do.”
Building in disrepair
After his company bought the building in 2018, Thomas said the property owners renovated the apartments, putting in hardwood floors and granite counters.
But tenants and documents paint a different picture of the building.
In 2016, 2017 and 2018, while under old ownership, building inspections found problems with smoke detectors, water leaks, improper electrical wiring, fire code violations, trash around the property, and other violations, records show. Inspectors cited both the vacant and occupied parts of the building.
More recently, while under new ownership, the vacant and occupied parts of the building racked up additional violations. In February, the elevator in the occupied part of the building was found to be unsafe. In May, the building was cited for water damage, a broken carbon monoxide detector, and other problems.
After the flood and fire in June, the building was deemed unsafe and uninhabitable because of fire code violations. The tenants were to be put up in a hotel.
For Williams, who had trouble walking up and down the steps, getting to a hotel proved difficult. The Salvation Army had arrived to take the tenants and he went upstairs to get an item from his apartment. By the time he got back downstairs the Salvation Army had left, so he spent the night in his apartment with no electricity.
He eventually went to a hotel and paid for a four-day stay, and he still has not received reimbursement, he said.
The building is now the subject of a criminal nuisance complaint, a type of administrative case brought by the city over “nuisance activity” at the property. The case cites police reports taken for five incidents between Dec. 12, 2018, and Aug. 14, records show: manufacture and delivery of a controlled substance, possession of drug paraphernalia, residential burglary or damage to property, robbery and armed robbery.
The building has come under new management, and Freedom Development Group is in the process of divesting its interest, Thomas said.
He said his company was responsive to Aurora’s requests, and never planned for residents to lose their homes. The company paid each tenant $1,000, he said, though tenants allege the payments came with strings attached.
“Anything that’s happened there was through nothing we did,” he said.
The owners had once planned to redevelop the property, Thomas said. The plan included offices, apartments and a daycare. At one point, the group was pursuing a lease to house a state agency, until the group learned the agency would be a correctional facility, Thomas said.
The property owners are now weighing whether to demolish the building.
The Chicago Tribune contributed.
