For 18 years, commercial real estate broker Tony Perry has endeavored to bring new industry to the Kankakee River Valley through a non-profit agency called the Area Jobs Development Association.
In that time, the energetic Perry boasts that he has enticed thousands of jobs to a region so battered by the Rust Belt recession of the early 1980s that residents once splashed bumper stickers on their cars reading, “To the last person out, please turn out the lights.”
For his economic development work and other community activities, Perry, 69, last week received a rare honor from the administration of Gov. George Ryan, his longtime hometown friend. The Illinois Department on Aging selected Perry and four others to be inducted into the Senior Illinoisans Hall of Fame this fall.
But a Tribune examination of Perry’s stewardship of Area Jobs shows that Perry, long a controversial figure in the Kankakee region, has used the non-profit agency not only to spur job growth, but as a financial conduit to help a company co-owned by his son, Joseph M. Perry, a suburban home developer.
Public documents show Perry’s agency has offered as collateral a $2.5 million industrial park–the prime asset of the non-profit agency–to secure hundreds of thousands of dollars in bank loans to the company co-owned by Perry’s son. In addition, records indicate his son’s company pays no rent for a storage operation at the agency’s Bradley industrial park.
Such dealings appear to flout tax laws forbidding agency directors or their family members from profiting through the operation of a non-profit, tax-exempt organization.
“If you’re an officer or a director on a board, or a family member, and you are personally benefiting or personally being enriched, the IRS would have problems with that,” said Phil Beasley, an Internal Revenue Service official in Dallas who specializes in tax-exempt organizations.
Perry and his son declined to answer questions from the Tribune about the loans, and the agency’s board of directors declined to release more detailed records of the deal. Board President Grover L. Brooks, also mayor of Bourbonnais, Ill., maintained that Perry has done nothing improper. He said Perry has been overly scrutinized by the media because of his relationship with Ryan, which dates back decades.
“There was only one man who tried to do everything right, and he was nailed to a stake,” Brooks said. “So if you only have one out of 12 people against you, that’s not a bad average.”
County’s rainmaker
Perry arguably is the most powerful and most recognized man in the Kankakee River Valley, an hour’s drive south of Chicago along Interstate Highway 57.
“Tony gets blamed for a lot of things because he goes out and does things,” said Vince Giardina, a real estate agent and commercial developer and Perry’s chief competitor for several decades. “There are probably some things he’s done wrong, but there are a lot of jealous people in this world who just sit around and don’t do anything but scream about him. I think he’s basically an honest man working hard.”
But Keith Runyon, who heads the Bradley-based government watchdog group Outrage, said Perry’s civic labor has enriched Perry far more than it has aided the region’s economic health.
“We have a long history of misguided government in this community, and unfortunately so much of it seems to be run for the self-aggrandizement of a few people like Tony Perry,” Runyon said.
Like flags proclaiming an explorer’s territorial conquests, Perry’s big white signs with orange-and-black lettering mark dozens of available commercial, industrial and residential properties throughout Kankakee and southern Will Counties. A shuttered Kmart near the expressway, a verdant field ripe for suburban development, a strip mall along a commercial corridor–all can be acquired through Perry.
Perry’s three real estate firms, according to his own calculations, handle about 85 percent of all commercial-industrial real estate activity in the county, and his career sales have exceeded $80 million.
Around the state, Perry is known as a go-to person in the Kankakee region. He was named 1999 citizen of the year by the Illinois Association of Realtors, and national trade publications have anointed him a civic leader.
In addition to his private holdings, Perry is the county’s de facto government liaison to business due to positions he acquired during the bleak Rust Belt days of the early 1980s. By 1982, more than 7,000 jobs disappeared from the valley and the economy was in a free fall.
It was then that Perry was selected to run Area Jobs Development, now a $1.8 million-a-year operation. His task was to use the industrial park, donated to Bradley by a vacating company, to recruit new industry. Later, he was tapped by state lawmakers to head the Kankakee River Valley Enterprise Zone, a program created by the Illinois General Assembly in 1980 to offer tax incentives to businesses.
All of these private and public jobs have placed Perry in strange dual roles: Any company desiring a local tax break first must see Perry, and if that company is looking to buy or lease commercial land, more than likely it must see Perry in his private capacity.
“He holds all the cards,” Runyon said.
Loans and a conflict
BJ Storage Inc., formed in August 1995, operates a long cluster of aluminum-sided storage facilities on a vast gravel lot behind a warehouse and office building at Area Jobs’ industrial park. Tax documents indicate that Area Jobs has wholly financed the construction and rental costs of the 68-unit facility, which is co-owned by Joseph M. Perry, 32.
Since November 1995, Tony Perry’s agency has co-borrowed or offered its industrial park as collateral to secure up to $500,000 in loans from the Bank of Bourbonnais and Federated Bank to BJ Storage, public records show. Financial records of Area Jobs show it is repaying a long-term loan of $429,273 to the Bank of Bourbonnais in $5,071 monthly installments–although it is uncertain whether that is the same loan obtained for Joseph Perry’s company. Area Jobs’ tax records do not detail what the loan is being used for, and agency officials declined to provide more information.
Area Jobs’ tax records and a 1998 audit also show no indication that BJ Storage is paying rent to the non-profit agency on its storage facilities at the industrial park. But, in 1998, Area Jobs charged rent to its other industrial park tenants totaling more than $710,000, according to tax records.
Meanwhile, Perry’s own real estate companies–Perry Land Co., Tony Perry Commercial Real Estate Group and Tony Perry & Associates–appear to be housed rent-free at the industrial park too. They also are not listed as paying tenants on Area Jobs’ tax documents. (Tony Perry & Associates receives $60,000 annually for Perry’s management of Area Jobs, records show.)
Members of Area Jobs’ board of directors–composed of Perry, the mayors of Bradley, Bourbonnais and Kankakee and two private businessmen–referred questions to Bourbonnais Mayor Brooks, board president.
After Perry received a written request from the Tribune to provide details about Area Jobs’ transactions with his son, board members called a meeting and agreed to release no information to the Tribune, Brooks said. Brooks noted that, although the mayors essentially control its direction, Area Jobs is a private organization and its internal records are not open to the public.
Brooks said Perry has done nothing improper because the agency’s board approved the dealings with his son. Brooks added the board has negotiated contracts with Perry for use of the park for his own businesses.
“There is nothing unethical or illegal that anyone has done,” Brooks said. “Everything looks to be in order and will have long-term benefits to Area Jobs. Those loans are confidential information between Area Jobs and a client.”
Perry said in a brief telephone interview that he is trying to remain above such public controversies. Despite repeated requests, he declined to discuss Area Jobs in depth. Joseph Perry did not return messages from the Tribune.
“I’m not interested in talking to any newspaperman, because all they do is condemn me,” Tony Perry said. “You guys live on scandal and stuff like that. I work 15 hours a day to bring industry to central Illinois and do I ever do anything wrong? Yes, I do. But I don’t need to be slammed anymore.”
Friends in Springfield
Perry said he has brought thousands of jobs to the Kankakee area by forging alliances with private industry and public officials, alliances that an official specifically on the government payroll could not build.
Perry has strong Republican ties. He accompanied former Gov. Jim Thompson on trade missions to the Far East and Western Europe. He has known Ryan for decades and has been a generous contributor to Ryan’s political campaigns, donating $20,600 since 1994.
Besides the Hall of Fame induction, Perry has been in the spotlight this year for brokering a deal between the Ryan administration and Hopkins Park that would bring a state women’s prison to the economically depressed village in Kankakee County.
Perry was slated to pocket a $33,000 commission after acquiring options to buy 120 acres that would house the prison. But when Perry’s commission became public in January, he said he would forgo the money.
Since then, a contract signed by Perry and Hopkins Park Mayor David Leggett surfaced showing that Perry would be paid $40,000 retroactively from the village for his work on behalf of Hopkins Park. Perry has yet to collect the fee, and the contract probably is not legally enforceable because the full Village Council did not authorize it.
Said Perry: “I have traveled the world and the country to find industries, and I’d place them anywhere in Illinois. It’s an insult to me to say we got the prison siting or anything else because of my relationship with the governor . . . . So to be blasted because I’m a pal of the governor hasn’t done much for me.”
