Hastert defends big profit
June 16, 2006
The speaker told a Washington reporter Thursday that the land he sold is more than five miles away from the proposed 36-mile outer beltway.
"So, it has nothing to do with the Prairie Parkway," Hastert said. "I owned land, and I sold it, like millions of people do every day."
The developer who purchased Hastert's property also defended the speaker, saying the future highway did not influence the price of the land deal.
"It's nice to have the Prairie Parkway there, but it did not influence our decision," said Art Zwemke, president of the Robert Arthur Land Company and a Hastert campaign donor. "We could be done with the development by the time the parkway is installed."
Zwemke plans to build 1,635 homes and 33 commercial acres on 727 acres northwest of Plano. The "North Country" project, now before the Plano Plan Commission, is on Galena Road three miles west of the parkway's protected corridor.
Hastert has promoted an expressway through western Kane and Kendall counties to address transportation issues since taking federal office in the 1980s. Last year, he secured a $207 million federal transportation earmark for the project.
Wednesday, the Sunlight Foundation, which states as its mission "to ensure greater transparence and accountability by government," alleged that Hastert obscured his interest in the land deal through a trust.
A Beacon News investigation found that Hastert made a $2 million profit on the land sold by Little Rock Trust #225 in December.
Transaction detailed
Even without the Prairie Parkway, land values are rising in Kendall County, the third fastest growing county in the nation. Hastert supporters Thursday offered more details showing how that growth, coupled with other factors, contributed to Hastert's $2 million profit.
"The start of the (Prairie Parkway) had nothing to do with this land purchase," said Dallas Ingemunson, chairman of the Kendall County Republican Party and Hastert's close friend and political mentor.
Hastert, Ingemunson and Tom Klatt, a former Bristol Township trustee, owned partial shares of a parcel in the Little Rock Trust that they sold in December to Zwemke's company after contracting it to Schaumburg-based real estate investor Ron Marsh. Marsh's business involves gathering smaller parcels of land together into a large parcel, making it more attractive for a future sale to a developer.
Zwemke said Marsh approached him in July 2005 about the potential development property near Plano. His company closed on the first 589 acres of the project in August for $13.5 million, or $22,920 per acre, and paid an undisclosed finder's fee to Marsh.
Ingemunson said Klatt originally approached him in 2004 with the idea of purchasing 70 acres on Little Rock Road that abutted a 69-acre parcel Hastert bought in 2002 as part of his 195-acre, $2.125 million estate.
Hastert's parcel was on the other side of the Little Rock Creek from his house and had no road access, so it made sense to connect the two properties through a trust, Ingemunson said.
The trio purchased the 70 acres in 2004 for $15,000 an acre through the trust, Ingemunson said. Hastert added his 69-acre parcel to the trust in May 2005. The 139 acres sold in December for $4.989 million, or $36,034 per acre.
Ingemunson said the previous owner of the 70-acre parcel, farmer John Wallanches, wanted to sell because of a general concern that the real estate market would eventually tumble.
"Some of the farmers who live around Plano believe this is a big bubble," Ingemunson said. "It's all going to burst. Unless they get their land sold."
Profit from the parkway?
Questions have been raised on whether that profit was affected by the potential Prairie Parkway, which the Illinois Department of Transportation is still planning. IDOT officials don't expect any drivers on the expressway, which would connect Interstate 88 near Kaneville to Interstate 80 in Grundy County, until at least 2011.
"I don't believe residential land in that area would be any differently priced if the Prairie Parkway wasn't there," said Whitney French, executive director of the Plano Economic Development Corp. "Commercial, however, will rise significantly if the Prairie Parkway becomes a reality."
A Beacon News investigation of property along the Prairie Parkway corridor has found that some developers already are anticipating the expressway. A three-part series on the parkway, "Road to Riches," begins Sunday.
