Obama name offers no magic for selling lot next to Chicago home

A vacant lot next to President Barack Obama's Chicago home is on the market for almost double what the owners paid 19 months ago.

The land was once owned by the wife of former fundraiser Antoin "Tony" Rezko, who later was convicted of influence peddling, and was part of a $1.75 million real estate deal that hurt Obama's election campaign. The 50-by-150-foot (15-by-46- meter) lot is being offered for $1.3 million.

The opportunity to live next to the president hasn't helped sell the house on the other side of the Obama residence. Those neighbors set a $1.85 million price this week, seven weeks after putting their home up for bid.

"The high-end market has taken more of a hit in this downturn," said Jim Kinney, vice president of luxury home sales for Baird & Warner real estate in Chicago. "The whole stimulus package has been aimed at the bottom end of the market."

Illinois real estate is showing signs of improvement. The Illinois Association of Realtors said Oct. 23 that year-over- year sales increased in September for the first time since March 2006, with first-time buyers driving the rebound. September unemployment in the metropolitan area was 10.5 percent, more than the national average of 9.8 percent.

John Poulos, a lawyer, and his wife, Marjorie, paid $675,000 for the lot in March 2008, when they purchased it from 5050 S. Greenwood LLC, property records show. Michael Sreenan, a former attorney for Rezko, said he wholly owned that corporation.

"We've gotten some inquiries, but haven't found that perfect buyer," said Karen Ashley-Bowman, the listing agent for Urban Search Corp. of Chicago. The vacant lot is south of the Obama family's red brick mansion in the Kenwood neighborhood.

Poulos declined to comment, citing a desire to maintain privacy for himself and the president's family.

The limited-liability 5050 S. Greenwood bought the lot from Rezko's wife, Rita, in December 2006, two months before Obama announced his presidential bid.

The land earlier was listed as part of the property the Obamas purchased in 2005, shortly after he was elected to the U.S. Senate. The sellers listed the home and lot separately, asking $1.95 million for the house and $625,000 for the landscaped side property.

The Obamas bought their house for $1.65 million, and Rita Rezko purchased the lot for $625,000, its full asking price. She then sold one-sixth of the lot to the Obamas for $104,500 to help them create a larger buffer for their property.

Obama said the deal was "boneheaded" because Rezko at the time was known to be under federal investigation, the Washington Post reported in December 2006.

Rezko, a developer and Illinois fundraiser, was convicted in June 2008 for taking part in a scheme to extract kickbacks in exchange for influencing the award of state business under Governor Rod Blagojevich, who was removed from office earlier this year. Rezko, 54, is awaiting sentencing, while Blagojevich faces trial on corruption charges.

Hillary Clinton, now Obama's secretary of state, used his connection to Rezko to criticize him during one of their campaign debates last year. She said she was fighting Republican proposals while Obama was representing a contributor's "slum- landlord business" in Chicago.

Rezko was among the first three donors to Obama's 1996 run for the Illinois Senate. In 2007, Obama gave to charity more than $44,000 in campaign donations linked to him.

The Obamas' home has 6,400 square feet (600 square meters) of space. Obama, 48, and his family have spent one weekend there since the president took office Jan. 20. White House spokesman Ben LaBolt declined to comment.

The Obamas' neighbor to the north, Bill Grimshaw, 71, listed his family's 6,000-square-foot (557-square-meter) home in September, touting the eight-bedroom home's proximity to the president's house.

Trish Hoffman, a spokeswoman for Chicago-based Matt Garrison Group, the real estate firm handling the Grimshaw house, said there have been many inquiries about it.

Sellers often think a unique location, such as next door to the U.S. president, makes a property worth more than the market price, Baird & Warner's Kinney said.

"That will have its pluses, as well as its minuses," he said. "The property is going to stand on its own merits, unless you have a true Obama fan."

A listing for the lot states that access is restricted and a copy of a driver's license is required prior to a showing.

Even without such challenges, the market for building homes is probably the slowest part of the high-end market, Kinney said.

"There are just so many choices that people can make a deal on for empty, new construction," he said.

Ashley-Bowman, the lot's listing agent, said the owners purchased it with the intention of building a 10,000-square-foot home but changed their minds.

Neighborhood residents often tell her that they think the Obamas should purchase the vacant lot to expand the buffer around their home, she said.

"I imagine he has more pressing problems right now," Ashley-Bowman said. "But it would be nice in terms of finishing off his property."