Embattled video gambling owner was in line for $2.5 million, taxpayer-funded windfall by flipping land. Now it’s off the table.

Eufemia Didonato

Tinley Park has not fared well in its dealings with video gambling operator Rick Heidner over the last year. © Chris Sweda / Chicago Tribune/Chicago Tribune/TNS Land at the northeast corner of Harlem Avenue and Vollmer Road in unincorporated Rich Township is seen on Sept. 30, 2020. First, the southwest […]

Tinley Park has not fared well in its dealings with video gambling operator Rick Heidner over the last year.

a large green field with trees in the background: Land at the northeast corner of Harlem Avenue and Vollmer Road in unincorporated Rich Township is seen on Sept. 30, 2020.

© Chris Sweda / Chicago Tribune/Chicago Tribune/TNS
Land at the northeast corner of Harlem Avenue and Vollmer Road in unincorporated Rich Township is seen on Sept. 30, 2020.

First, the southwest suburb signed onto Heidner’s plan to build a horse racing track and casino on state-owned land, only to have Gov. J.B. Pritzker derail the project after a Tribune investigation revealed Heidner’s long-standing business ties to people connected to organized crime.

Now, the Tribune has learned that Tinley Park officials have been secretly negotiating a real estate deal that would provide Heidner a $2.5 million windfall on land he purchased less than a year ago as a possible alternate casino site.

Under the proposal, Tinley Park was prepared to pay $7.5 million for 114 acres — about $2 million more than its own appraisal said it was worth, said Tinley Park Village Manager David Niemeyer. Heidner paid $5 million for the land, meaning he would take away a $2.5 million profit at taxpayers’ expense.

The deal came to an abrupt halt last week when Heidner sent a short email to village officials saying the land was no longer for sale. That email came a day after the Tribune began asking questions about Heidner’s ownership of the land.

Niemeyer said he does not know why Heidner pulled out, but said the justification for the village’s offer was an attempt to wrest control of the undeveloped parcel from the neighboring village of Matteson, which struck a deal with Amazon this year to build a distribution warehouse across the road from Heidner’s property.

He noted that the purchase would have needed public approval by the Village Board. Officials had intended to use cash reserves to buy the land rather than borrowing money or issuing bonds, Niemeyer said.

In a statement, Heidner said he stopped negotiations because “certain Tinley Park officials attempted to make the purchase a divisive political issue.”

Heidner spokesman Randall Samborn did not elaborate on what Heidner meant, other than noting that not all village trustees supported the plan to use taxpayer money to buy the land. The proposed purchase had not been publicly known, given that discussions took place in closed session during recent months.

Tinley Park offered the price above appraisal after Heidner told village officials he had an offer from a developer, Schiller Park-based Northern Builders Inc., to buy a portion of the land, Niemeyer said. Heidner’s spokesman said the current offer is $6.3 million for 27 acres, with an option on another 27 acres, but that Heidner had not accepted it.

The potential profit from flipping the land would have come at a critical time for Heidner. He has been embroiled in a long dispute with a video gambling cafe chain owner over that company’s attempt to remove Gold Rush machines from 44 locations. Video gambling was shut down for months by the pandemic this year, and the economic downturn also has ravaged commercial real estate, which Heidner also is involved in.

The land in question is at the corner of Harlem Avenue and Vollmer Road. It sat on the market for years without generating much interest, until Heidner bought it in a cash deal last November. Using a string of land trusts and shell companies, he closed on the property about six weeks after Pritzker blocked his first option for a casino site.

a man wearing a suit and tie: Rick Heidner waits to speak in front of the Illinois Racing Board in Chicago on Sept. 17, 2019.

© Stacey Wescott / Chicago Tribune/Chicago Tribune/TNS
Rick Heidner waits to speak in front of the Illinois Racing Board in Chicago on Sept. 17, 2019.

Niemeyer and Heidner confirmed that they had discussed using the undeveloped parcel as a “racino” site if Heidner could rejuvenate his prospects of winning a casino license from the Illinois Gaming Board. Instead, the Gaming Board is now seeking to revoke his video gambling license on unrelated charges.

Heidner’s land is currently unincorporated, though both Tinley Park and Matteson have been eyeing it. Niemeyer said that Heidner’s proposed deal with Northern Builders included annexation to Matteson, meaning that municipality would control zoning and building decisions, as well as reaping whatever taxes the property produced in the future. Tinley Park was trying to stop that from happening, the village manager said.

Heidner and Tinley officials both say that the Amazon warehouse could spur other industrial development in the area.

But village officials were not all sold on the idea of municipal government getting into the real estate business using taxpayer money. Those opposed to the deal included Mayor Jacob Vandenberg.

“I don’t think we should be using public money to buy property. That’s been my position since day one,” he said.

However, the mayor finds himself with limited power because he’s often on the losing end of 4-3 split among Village Board factions.

The economic downturn caused by the COVID-19 pandemic has hit Tinley Park’s finances as it has many otherwise prosperous local governments, and the village has had to furlough some management employees, officials acknowledged.

“What does this say to our employees? ‘Sorry, we have to furlough you and cut your pay so we can buy some land,’” the mayor said.

Trustee Michael Glotz, who leads the board’s majority faction, declined to answer questions about the land.

“That hasn’t been discussed publicly,” said Glotz, who declined to say whether he supported the proposal. Other trustees did not respond to requests for comment.

On the Matteson side of the divide, Village President Sheila Chalmers-Currin said her town had planned to annex the land until Heidner recently informed officials that he had a deal to sell the land to Tinley Park. She said she was unaware that the Tinley Park sale also had fallen through until the Tribune informed her during an interview.

“A couple weeks ago, the owner of the land had decided to not allow the village (of Matteson) to annex the land — that the village of Tinley Park was going to buy it,” she said. “At that point, everything was off the table. … We were informed through our attorney that this was no longer an option. Of course, I was disappointed. But no additional information has come to us.”

Matteson officials wanted the land to be in their village in case the Amazon property across Vollmer Road led to more interest in development in the immediate area, Chalmers-Currin said.

Both suburbs have spent public money dealing with Heidner over the land.

Among Tinley Park’s costs was an appraisal, which set the land’s value at between $5.25 million and $5.75 million, Niemeyer said. The range depended on whether an environmental study found more serious flood risks on the property, and whether the land ultimately was awarded Cook County tax credits often used to help landlords compete with much lower property taxes in neighboring Will County. Niemeyer later said the value of the land could be higher if other tax incentives were granted to the owners.

A significant portion of the land lies either in a flood way or a flood plain, according to the Federal Emergency Management Agency’s map of the region.

Land in a flood way typically cannot be developed because of a high risk of flooding. A funnel-shaped segment of the property, which consumes most of its northeast corner before narrowing and running through the middle of the land to Vollmer Road, would not be suitable for building, said Arthur Schmidt, a professor of civil and environmental engineering at the University of Illinois at Urbana-Champaign who reviewed the map for the Tribune.

Heidner “has made no other decisions regarding sale or disposition of the property,” a spokesman said in a statement.

The northwest suburban business owner continues to battle state gambling regulators. In December, the Gaming Board filed charges to revoke Heidner’s gaming license after gathering text-message evidence from a lawsuit that indicated Heidner offered an alleged $5 million bribe to the owner of the Stella’s chain of video gambling cafes to keep his machines in place.

Heidner has denied the allegation and said he was the victim of an illegal scheme to squeeze him out of the business. Heidner is appealing the state’s attempt to revoke his license.

Gaming officials moved to take Heidner’s license about two months after an October 2019 Tribune investigation revealed that for nearly two decades Heidner has owned numerous commercial properties via shell companies in several states with Rocco Suspenzi, the longtime chairman and part owner of Parkway Bank and Trust in Harwood Heights.

In 2003, the Gaming Board and the FBI accused Suspenzi of concealing secret ownership stakes of organized crime figures in a proposed Rosemont casino. Suspenzi and his son invoked their Fifth Amendment rights against self-incrimination in 2005 when the Gaming Board sought to question them about their role concealing the ownership stakes of reputed Outfit-linked investors Vito Salamone and Nick Boscarino.

At the same time, Heidner has a similar real estate partnership with convicted bookmaker Dominic Buttitta. Together, they own a building in Elgin that is leased to a bar that is licensed for video gambling and uses Heidner’s Gold Rush machines. In 2012, Buttitta pleaded guilty to federal charges of running an illegal sportsbook from the South Elgin strip club he controlled. He also was convicted of skimming millions of dollars from the business by not declaring income from the daily fees that dancers pay to perform at the strip club.

Former Gaming Board members who granted Heidner a video gambling license in 2012 said those business ties would have been a red flag to board members, but they were unaware of the relationships at the time.

More recently, Tinley Park had been in negotiations to buy the former mental health center land from the state, which it planned to then sell to Heidner. In 2018, Heidner beat out other developers who submitted plans to the village to turn the 280-acre campus into housing. Later, Heidner informed Tinley officials that his plans had changed, and he anticipated building a racino as part of a yet-to-be approved state gambling expansion. Village officials embraced the idea and said they believed a new horse track could be viable when paired with a casino.

By the time the Tribune’s investigation was published, Heidner’s proposal for harness racing, a hotel, a music venue, restaurants and a casino already had received preliminary approval from the Illinois Racing Board, which regulates and promotes the horse racing industry in the state.

A few days later, Pritzker sent a letter to the Racing Board announcing that the state no longer would be making the Tinley Park campus available for the project.

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