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The city of Chicago has spent $28 million to house migrants in two buildings owned by Remo Polselli, a Michigan-born landlord who went to prison for defrauding his federal taxes and has continued to face tax problems with the Internal Revenue Service, records obtained by the Chicago Sun-Times show.
Polselli’s companies own the Inn of Chicago and the former Standard Club, both of which were used by the city as shelters for migrants.
In 2003, he pleaded guilty to federal tax charges that he “deducted and collected” nearly $2.5 million in withholding and Social Security taxes from his employees but failed to turn the money over to the IRS, records show.
Then, in February 2023, the IRS filed a separate federal tax lien against him, saying Polselli owed $1.4 million on his 2018 personal taxes.
The IRS action came as the city began paying to house migrants at two of Polselli’s Chicago buildings, records show: the Inn of Chicago, at 162 E. Ohio St., and the Standard Club, at 320 S. Plymouth Court.
The former Standard Club, 320 S. Plymouth Court, where City of Chicago operates a migrant shelter.
He is one of two Chicago migrant shelter owners who are receiving taxpayer money while behind on government debts, the Sun-Times reported.
The largest owner of migrant shelters in the city
Polselli and his wife’s battles with the IRS spanned years, including a case that reached the U.S. Supreme Court last year. In September, he began paying the IRS $22,000 a month to resolve his debt, according to his attorney. Those payments must continue until the debt is paid, according to a U.S. Tax Court order.
“I have paid the IRS over $5 million over the last few years,” Polselli said. “It is a dispute that has been resolved.”
The City has spent more money leasing Polselli’s buildings for migrant shelters than any other, according to City Hall records. It began leasing those buildings in early 2022 under Mayor Lori Lightfoot and has continued to lease them under Mayor Lori Lightfoot’s administration. mayor of Brandon Johnson.
Polselli says he has enough empty beds to house more migrants if Texas Gov. Greg Abbott, a Republican, follows through on his threats to send more asylum seekers by bus to Chicago to try to disrupt the Democratic National Convention (DNC), which began Monday.
“There are beds available at both properties,” said Polselli, who declined to discuss the terms of their migrant housing arrangements.
Johnson aides and others familiar with the situation say the City Council neither selected nor pressured Polselli or any of the other property owners who have rented out their properties as housing for thousands of migrants sent to Chicago from the border. Many of them have arrived in the past year amid unrest in their home countries.
People gather outside a migrant shelter at the Chicago Inn, 162 E. Ohio St.
The city had a contract with Equitable Social Solutions when it also turned to the Louisville, Kentucky-based social services company for help as the migrant crisis worsened. Equitable subcontracted ReloShare Inc., a Chicago firm, to find property managers who could provide housing for the new arrivals.
None of the landlords the city of Chicago uses have a contract with the city. They are paid by one or both of the private companies with money from city taxpayers. Much of that money comes from the city, Cook County and the state of Illinois, and in some cases from the federal government, according to officials. City records show that the owners charge for each bed, regardless of whether it is occupied.
Since May, the city has spent more than $28 million since February 2023 to lease Polselli’s buildings, records show. It’s unclear how much Polselli has made from that.
In addition to his unpaid taxes, Polselli is also behind on his property taxes, records show, and owes $660,840 in property taxes on the former Standard Club.
Once the migration crisis is over, Polselli says he hopes to resume his plans to renovate the hotel and convert the Standard Club into housing.
The owner owes more than $1 million in taxes
The City also spent $12.3 million between September and May to lease three buildings co-owned by developer Scott Goodman. More recent figures are not available. The Sun-Times previously reported that Goodman has been paid to house migrants even though he was delinquent on $1.9 million in rent to the Chicago Transportation Authority (CTA) for a West Loop building where his companies operate. The CTA also claimed $15 million in back payments from him.
Officials say Goodman has been making payments on his debt to the CTA, but still owes more than $1 million in lease taxes on those CTA offices at Racine Avenue and Randolph Street. He has subleased some of that CTA space to the DNC host committee. Lease taxes are paid by companies that rent property to public agencies.
Goodman’s companies also own three buildings rented to house migrants: 1308 N. Elston Ave., 2241 S. Halsted St. and 344 N. Ogden Ave.
People outside a shelter for migrants at 2241 S. Halsted St.
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Zubaer Khan / Sun-Times
Migrants outside a shelter at 344 N. Ogden Ave.
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Anthony Vazquez / Sun-Times
A migrant shelter, located at 1308 N. Elston Ave., is seen in this photo, Wednesday, Feb. 28, 2024.
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Manuel Martinez/WBEZ
The three facilities have a total of 4,300 beds, making Goodman the largest landlord of migrant shelters in the city.
Goodman and his partner, Arthur Hollis, missed payments on an $11.5 million mortgage on the Ogden property for several months, according to a lawsuit their lender filed in May that accuses Goodman and Hollis of fraud, saying they used the money to convert the building into migrant housing instead of offices. Goodman and Hollis have denied any wrongdoing.
Scott Goodman.
Mitchell Armentrout / Sun-Times
Court documents show ReloShare pays Goodman and Hollis $150,000 a month under a lease that expires Dec. 31. They owe $123,376 in property taxes on the Ogden building, records show.
A year ago, Steve Pearlman, Goodman’s attorney, sought a property tax exemption on the Elston property, arguing that it was mostly vacant. Cook County Assessor Fritz Kaegi declined to reduce the property’s assessment, but the Cook County Board of Review drastically reduced Kaegi’s assessment, resulting in Goodman paying $53,321 less than the previous year. Those tax savings came when he began collecting rent from migrants.
Goodman did not return calls for comment.
Other migrant shelters rented by Chicago
The City also rents these other buildings for migrant shelters through Equitable Solutions and ReloShare:
- The former home of American Islamic College and Immaculata High School that developer Keith Giles purchased in July 2023. The city has paid $6.2 million to lease the property at 640 W. Irving Park Road to house 1,300 migrants.
- Two buildings at 1640 W. Walnut St. and 939 W. Lake St., owned by commercial property owner Philip Denny. The city has paid more than $3.9 million since September to rent the buildings to at least 1,100 immigrants.
- A Greektown shelter, the Parthenon Guest House, began providing beds to migrants in the fall of 2022. The shelter, says in a recent property tax assessment appeal, has struggled financially due to the COVID-19 pandemic. The city has paid $2.1 million to house migrants at the shelter, which is currently closed to the public.
- The Sheridan Chase Motel in Rogers Park, which has been renting out its 48 rooms to migrants since last summer, has paid more than $2 million to the city.
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Translated by Gisela Orozco for The Voice Chicago
