Chicago movie studio boss turned FBI mole eyes expansion — across from FBI offices

Chicago movie studio boss turned FBI mole eyes expansion — across from FBI offices

That’s the Chicago FBI field office in the 1300 block of South Leavitt Street as seen from the 2.25-acre lot across the street that Alexander S. “Alex” Pissios, who went undercover as an FBI mole, wants to buy or lease for his Cinespace Chicago Film Studios. | Tyler LaRiviere / Sun-Times

It’s the 5th deal for government land Cinespace Chicago Film Studios head Alexander S. Pissios has sought since agreeing to work undercover against Teamsters boss John T. Coli Sr.

FBI mole Alexander S. Pissios — the president of Chicago’s largest film studio who secretly recorded conversations to help federal authorities nail longtime Chicago Teamsters union boss John T. Coli Sr. for extortion — wants to build another studio, this time on government land right across the street from the FBI, records show.

Pissios, who heads Cinespace Chicago Film Studios, is negotiating to buy or lease 9.25 acres from the Illinois Medical District, a government agency overseen by Gov. J.B. Pritzker, Mayor Lori Lightfoot and Cook County Board President Toni Preckwinkle.

This is the fifth real estate deal Pissios has gone after to develop taxpayer-owned land since he began cooperating with the FBI and federal prosecutors in May 2016 to bring down Coli, the powerful union boss who extorted $325,000 from Cinespace Chicago Film Studios.

Previously, Pissios and his partners bought two vacant lots from City Hall. One is now used as a parking lot for a tenant who runs a cannabis dispensary.

The other is set to be part of their $74 million deal to redevelop land owned by the Chicago Housing Authority with stores and housing.

As part of another proposed movie studio development, Pissios also has been battling St. Anthony Hospital in an effort to buy the old Washburne Trade School property controlled by the Chicago Board of Education and City Hall.

Now, Pissios and Cinespace have designs on building another studio property in the shadow of the FBI’s Chicago headquarters on the West Side, a proposal that could force the relocation of Superior Ambulance Service, which leases space there from the medical district.

Google Earth illustration from Illinois Medical District development plans document.
Google Earth illustration from Illinois Medical District development plans document.

Pissios wants to buy or lease the property from the medical district, which has a long history of financial troubles. The district is listening because, besides money, Cinespace is promising to create 1,500 jobs.

“While both are being considered, negotiations are ongoing and no agreement has been finalized,” says Gina Oka, the medical district’s attorney.

The district’s seven-member board — appointed by the governor, mayor and county board president — already has waived a “reverter clause” under a provision of Illinois law that would allow the government agency to take back the property in case the development falls through. That was a condition Cinespace insisted it needs to get financing for the project.

Pissios and the medical district’s executive director and CEO, Dr. Suzet McKinney, are board members of the Independent Film Alliance, which was created in January as the medical district was negotiating a real estate deal with Pissios’s Cinespace Studios.

Another of the alliance’s board members, John Cooke, is also on the medical district’s board.

The film alliance was created by a merger of Pissios’ charity Stage 18 Chicago and the Independent Filmmaker Project Chicago to support independent filmmakers.

McKinney refused to talk with the Sun-Times. But the district says there’s no conflict of interest for her and Cooke to hold the unpaid alliance posts with Pissios while he’s trying to make a deal with the medical district they run.

Pissios and Thomas Breen, his criminal defense attorney, won’t comment on the FBI mole’s latest proposed real estate venture with a government agency.

It’s unclear whether Pissios is still working with federal authorities, who won’t talk about the movie studio mogul’s efforts to expand the film and TV operation that was built with $17.3 million in grants doled out by then-Gov. Pat. Quinn.

In exchange for his cooperation, Pissios was given a “non-prosecution agreement” by the U.S. attorney’s office in March 2017 — a deal that criminal defense lawyers say is highly unusual for a government witness.

Authorities haven’t said whether Pissios has been cooperating with them in building other cases besides Coli’s.

He won’t have to testify against Coli, the Teamsters boss Pissios has praised for helping Cinespace obtain state grants from Quinn. That’s because Coli — who was arrested in the alley behind his Lincoln Park home on April 4, 2017, minutes after he got $25,000 in cash from Pissios — pleaded guilty last July and is now also cooperating with federal authorities.

Pissios’ flurry of real estate deals over the past four years has come after he filed for bankruptcy protection in January 2011. That followed a series of bad real estate deals with former partner Edward Gobbo, whose late uncle William Hanhardt ended up going to prison for running a jewelry theft ring for the mob — while working as the Chicago Police Department’s chief of detectives.

Pissios and Gobbo both went bankrupt, declaring they owed millions of dollars to clout-heavy Washington Federal Bank for Savings for loans they got to build townhomes around the United Center.

The Bridgeport bank is the focus of a criminal investigation since bank president John Gembara was found dead in December 2017 with a rope around his neck in the master bedroom of a customer’s home.

Federal regulators quickly shut down the bank, later declaring it was part of a massive fraud scheme in which it lost more than $80 million on loans that, in many cases, were made with zero collateral — and no expectation they would ever be repaid.

Nearly five years after Pissios went bankrupt, federal investigators discovered Pissios had failed to disclose all of his assets to the bankruptcy judge, leaving out the $100,000 loan he’d gotten from an uncle who wanted Pissios to expand the family’s Toronto movie studio to also include a studio in Chicago.

Federal agents met with Pissios in May 2016, about 14 months after then-Gov. Bruce Rauner forced Cinespace to return a $10 million grant Quinn gave the studio shortly before leaving office. Rauner’s action came after the Chicago Sun-Times reported Cinespace got the grant to buy land around the studio that the owners said wasn’t for sale.

Threatened with bankruptcy fraud and a five-year prison sentence, Pissios agreed to cooperate with the FBI and the U.S. attorney’s office.

At the time, he had more than $1 million in debts, including his gambling debts and the mortgage on his Hawthorn Woods home that he and his wife hadn’t paid in nearly nine years.

The house was sold at a sheriff’s sale two years ago for half the money Pissios and his wife owed. They now live in a Long Grove home financed with a $2.4 million mortgage from Belmont Bank & Trust, which also has lent money to Cinespace. The bank’s chairman is James J. Banks, a zoning attorney who worked for Pissios and Gobbo.

Read this Jan. 12, 2020, Sun-Times report.
Read this Jan. 12, 2020, Sun-Times report.

The land dealings

Here’s a look at Cinespace’s real estate dealings with government agencies since Pissios began cooperating with federal investigators:

  • Oct. 13, 2016 — Pissios paid Mayor Rahm Emanuel’s administration $34,500 for land that Mayor Richard M. Daley’s administration previously sold to the Latino Chicago Theater for a project that fizzled. The property in the 2600 block of West Ogden Avenue has since become part of Cinespace’s redevelopment with the Chicago Housing Authority.
  • Feb. 23, 2017 — Pissios paid the Emanuel administration $18,000 for a parking lot at 1319 S. Western Ave., just south of a former tire store he bought in 2014 for $550,000. The store and parking lot are leased to The Herbal Care Center, a cannabis dispensary owned by Perry Mandera, who’ll pay Pissios $2.2 million in rent under the 10-year lease.
  • March 22, 2017 — Cinespace, Habitat Co. and Mount Sinai Hospital submitted a proposal to the CHA to redevelop 11 acres, including land the housing agency owns. They estimated their plan would bring the three partners more than $4 million in fees. The CHA chose the Pissios group three months later, expecting construction to begin in two years, but that’s yet to happen.

Nine days after this, the U.S. attorney’s office signed the non-prosecution deal with Pissios, who made his final extortion payment to Coli four days later.

Former longtime Chicago Teamsters union boss John T. Coli Sr.’s guilty plea last summer to extorting $325,000 from Cinespace meant that Alexander Pissios wouldn’t have to testify for the prosecution at his trial.Ashlee Rezin Garcia / Sun-Times
Former longtime Chicago Teamsters union boss John T. Coli Sr.’s guilty plea last summer to extorting $325,000 from Cinespace meant that Alexander Pissios wouldn’t have to testify for the prosecution at his trial.
  • May 29, 2018 — Pissios and his partners paid $2.8 million for the Crown Steel property at 3355 W. 31st St., planning to turn it into a movie studio.

For that project, Pissios has said he also needs the nearby Washburne Trade School property at 31st Street and Kedzie Avenue. But St. Anthony Hospital already was in talks with city officials, ever since Mayor Richard M. Daley was in office and offered to sell the property for $1 so the hospital could be rebuilt as part of a larger project that also would have “a range of retail, wellness, education, arts and recreation.” Pissios’ plan later seemed to gain footing with Emanuel in office, but neither project was approved.

According to Lightfoot’s planning and development department: “Negotiations with St. Anthony’s are ongoing. The Lightfoot administration has directed several city departments to ensure the site’s redevelopment will achieve inclusive economic development and growth that benefits community residents and businesses.”

  • Sept. 17, 2019 — Cinespace approached the Illinois Medical District about buying or leasing 9.25 acres, much of it vacant land, for another studio. According to the district’s former attorney Mark Jamil, who now represents Cinespace, the proposed studio wasn’t economically feasible unless the board waived the clause in state law prohibiting the district from taking the property back if the project isn’t completed. The board waived the clause in December and told its staff to try to negotiate a deal with Pissios.

If the board does sell to Cinespace, the district would need permission from Pritzker. The governor’s office hasn’t responded to requests for comment on Pissios’ plan.

RELATED COVERAGE

Click to read this Nov. 3, 2019, Sun-Times report.
Click to read this Nov. 3, 2019, Sun-Times report.
Click to read this July 15, 2018, Sun-Times report.
Click to read this July 15, 2018, Sun-Times report.
Threatened with prosecution for bankruptcy fraud, Alex Pissios became an undercover government witness, the Sun-Times revealed.
Threatened with prosecution for bankruptcy fraud, Alex Pissios became an undercover government witness, the Sun-Times revealed.

Latest Category Posts