One of Britain’s most successful businessmen says he remains bullish on investing in the American economy and wants to complete a proposed $2-billion real estate development near downtown Chicago.
Nadhmi Auchi, ranked by Forbes as one of the world’s wealthiest men with a reported net worth of $3.1 billion, looks forward to developing a 62-acre parcel just west of Chicago's "Loop" near downtown as part of a signature project, Riverside Park, that would include residential, retail, and commercial space.
Auchi’s company, General Mediterranean Holding (GMH), estimates the Riverside Park development will create more than 10,000 new construction jobs, as well as permanent retail and commercial jobs, for the Chicago economy. Project plans were approved in March 2004 by the city of Chicago as a planned development.
“I believe in the United States. Sooner or later, the U.S. economy and the demand for housing and retail will come back,” Auchi tells Newsmax. "GMH is ready to build toward that future."
But U.S. real-estate woes have not been as challenging, perhaps, as local politics.
GMH's proposed project in Chicago hit a bump last year when it surfaced that Antoin “Tony” Rezko, a local businessman and one-time fundraiser for U.S. Sen. Barack Obama, was an investor in the proposed Riverside Park project and had received $3.5 million from GMH as part of a commercial transaction trying to buy out Rezko.
Rezko, a Syrian-born American, made headlines partly because of his ties to Obama. During the South Carolina Democratic primary debate held last month, Sen. Hillary Clinton chastised Obama for his dealings with Rezko, whom she described as a “slumlord.”
Obama swiftly moved to distance himself from Rezko, turning over nearly $150,000 in campaign contributions raised by Rezko to charities.
Rezko is set to stand trial in March on charges that he extorted $6 million in kickbacks from firms that do business with the state of Illinois. Rezko has been described as “a former adviser and top fundraiser for [Illinois Governor Rod] Blagojevich.”
In late January, federal authorities moved to arrest Rezko, fearing he would leave the country. In court papers filed last month, federal prosecutors revealed that Rezko had failed to properly disclose his finances, including his transactions involving the Riverside Park transaction, as required for his bond arrangement.
Auchi — a Win-Win for Chicago
Because of his reputation as a developer of projects around the world, Auchi says he was a natural target for Rezko, who put together a concept to develop vacant land in a gentrifying neighborhood along the Chicago River just west of downtown.
Many liken Auchi's fame in Britain and the Middle East to that of Donald Trump in the U.S. Auchi's remarkable personal story began in Iraq where he became a political opponent of Saddam Hussein. His brother was murdered by the Iraqi dictator and Auchi eventually left Iraq in 1980.
Over the years, Auchi's modest construction and trading firms grew into a global business empire. Today, he is one of the largest hotel operators in the Middle East. His company owns not only the prestigious Le Royal chain, but also dozens of hotels branded under hoteliers Intercontinental, Hilton, Resideal, and Occidental.
GMH's diversified businesses today include not only hotels across Europe and the Middle East, but businesses in media, aviation, hospitality, manufacturing, finance, and telecommunications. Auchi estimates he has close to $300 million invested in U.S. and Canadian firms and real estate alone.
When Rezko contacted him about a potential land deal in one of America’s greatest cities, Auchi says the idea piqued his interest.
Auchi was impressed by Rezko who, in 2004, appeared to have the confidence of the business and public leadership in Illinois. During Auchi’s brief visit to Chicago, Rezko introduced him to prominent business leaders and elected officials as Auchi familiarized himself with the marketplace first-hand.
In all, GMH has invested close to $170 million to acquire the Chicago property, giving the company 80-percent control of the holding company that owns the land.
As negative information about Rezko came to light last year, GMH moved to buy out Rezko’s interest in the proposed Riverside Park project. In July 2007, Rezko sold the majority of his interest.
Last month, federal officials in Chicago cited Rezko’s undisclosed receipt of GMH's initial payment of $3.5 million as the cause for the revocation of his bond and his arrest. He remains in jail pending his trial.
GMH officials tell Newsmax that Auchi is very disturbed by the course events, even though he and the company have acted by the book and in good faith.
Some news reports implied that Auchi’s company might have covertly made the payment. GMH officials say the suggestion is “ridiculous” because a U.S. law firm handled the standard business transaction and Rezko’s law firm, Chicago-based Freeborn and Peters, received the funds in its account.
Complete Transparency
"We have voluntarily disclosed to the court all associated documents about the transaction," GMH officials say on behalf of Auchi. "We are acting with complete transparency."
Auchi is disappointed by the publicity that has been brought on by the Rezko case, but remains hopeful."As a business, GMH has investments all over the world," Auchi says. "We believe Chicago shows great promise, as does the future rebound of the U.S. economy."
GMH representatives note that some news reports are “completely false.” For example, a report on the ABC News Web site detailing Rezko’s arrest claimed that Auchi was “an Iraqi businessman implicated in the oil-for-food scandal.”
Auchi says this claim is untrue and has been circulating on the Web for some time. Several investigations, including the U.N.’s Independent Inquiry Committee headed by Paul Volcker, make no mention of Auchi or GMH in the oil-for-food issue.
Similarly, Auchi has battled unsubstantiated claims that he had ties to Saddam Hussein. While he says some of his companies did business with Iraq before the first Gulf War, as did many American companies, Auchi says he cut business ties with his homeland once Iraq was placed under international sanctions.
He notes that various publications that published such false rumors, including the Financial Times, the Sunday Times, and the Mail on Sunday, published apologies upon further investigation.
In addition to his success as a global businessman, Auchi is widely lauded as a distinguished civic and charitable leader. In fact, when traveling to any given country, he is typically invited to meet the head of state. As a result, he was surprised that some in the press took issue that he had met with the Illinois governor during his 2004 visit to the United States.
He acknowledges that he has met with former presidents of the United States, “from the Republican and Democratic parties.”
In Britain, he heads the country’s Anglo-Arab Organisation, a group that seeks to integrate Arabs into British society.
He also has close ties to Liberal, Labour and Conservative leaders. In 1999, on the 20th anniversary of his business, he received a watercolor painting of the House of Commons personally signed by then Prime Minister Tony Blair, the heads of the opposition Conservative and Liberal Parties, as well as 120 members of parliament and the House of Lords.
In 2004, Queen Elizabeth II granted Auchi a Coat of Arms for his global charitable and business success in Britain, which was recognized by many heads of state.
Auchi has helped foster better interfaith dialogue. For his efforts, the late Pope John Paul II knighted him with the Pontifical Order of Saint Sylvester Pope and Martyr.
Auchi has a long-standing interest in the United States. In addition to an array of investments, in the late 1990s he served as vice chair of Harvard’s John F. Kennedy School of Government.
The tycoon says he could easily walk away from the Chicago development by selling the land he owns for a profit. But he has been reluctant to do so.
He recalls his trip to Chicago and how he was touched by “the excellent reception I received from the people there.” This experience, he says, and the promising future of the Chicago marketplace, makes it hard to just walk away.
“This is a project that of course benefits the GMH group, but in a bigger way over the long term, the local economy and the people of Chicago. It’s a win-win,” he feels.
GMH officials say the Chicago project would be done in phases, and could be completed within eight years.
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