An ambitious plan to turn an old industrial plant in Dolton into an entertainment center, bringing jobs and commerce to the neglected south suburbs, has collapsed into a bitter fight involving corruption charges aimed at the town's mayor, William Shaw.

Shaw and the developer are having a scrape over scrap -- who gets to pocket money from selling the scrap metal created by demolition at the property. But their dispute also involves financial control of the project, with the developer charging that Shaw is retaliating against him for not hiring the mayor's friends and family members.

"It's just extortion, period," said developer John Deneen, president of Emerald Property Group, which co-owns the property with the Village of Dolton. The site covers about 22 acres northeast of 142nd Street and Cottage Grove.

Deneen said the village is engaged in "theft," removing and selling what he said is $500,000 worth of scrap from the site. He said Dolton has barred him from the parcel. His lawyer, John Sullivan, said Shaw has threatened to arrest Deneen if he's found anywhere in the village

"It's the land the law forgot," Deneen said.

Shaw and Deneen struck their deal in mid-2005, and during a ceremonial groundbreaking boasted of plans for a water park, hotel, restaurants and theaters at the location, which is near the Dolton Avenue interchange on the Bishop Ford Expy.

Deneen said the partnership fell apart over the next several months over his refusal to hire Shaw cronies. Among the alleged demands he detailed: Hire son Victor Shaw at $150,000 a year; hire Village of Dolton public relations person Sean Howard at $150,000 a year; pay brother Robert Shaw, a former Chicago alderman, a $100,000 consulting fee.

In a suit filed against the village, Deneen said that since March, William Shaw has unlawfully refused to issue permits allowing complete demolition on the property. That forced a standoff in which all work stopped until last month, when Sullivan said a contractor resumed demolition and removal of the scrap.

Sullivan said he doesn't know who authorized the contractor, Midwest REM Enterprises, to gain access to the property and he has issued subpoenas to Dolton officials for that information. The partnership agreement with Dolton clearly states that Deneen is in charge of the site, he said.

Midwest REM did not return calls.

Village attorneys also could not be reached despite several calls. Dolton's economic development director, Bert Herzog, would not discuss the status of the property, but said in a brief interview that Deneen has been removed from the project for nonperformance.

Herzog said the village is talking with another potential developer that he would not name.

Any new partner would need to buy out Deneen's share of the partnership that owns the property. Deneen said no one has approached him with an offer.

Shaw, a former state senator, has had a controversial tenure in Dolton. But Deneen also has detractors because he has announced large-scale projects while having no history of finishing any. Besides the Dolton site, he also is trying to redevelop the old Dixie Square Mall in Harvey.

Several people said Shaw has tried to bring a hotelier, Satish "Sunny" Gabhawala, into the deal. Gabhawala owns the Chicago Park Hotel in Harvey and in January filed paperwork with the state of Illinois to form a company called Chicago Waterpark and Resort LLC, a possible indicator of plans for Dolton.

"I know Dolton wanted to do something with him, but I don't believe he had the wherewithal," Deneen said. Gabhawala, who did not respond to phone messages, is said to be a friend of Victor Shaw.

In a biography Gabhawala posted online as an officer of the Asian American Hotel Owners Association, he describes himself as "very active in local politics."

Deneen originally hired United Demolition Inc. to take down the aluminum plant with a contract that promised United 100 percent of the scrap metal proceeds.

United Demolition has filed a lien on the property because it alleges it was not paid for work and isn't getting its access to the scrap. The company's president, William Marino, agreed with Deneen's description of Dolton duplicity and threats.

"The mayor had his son in a position to manage the site. We were demolishing the facility and they stopped us," Marino said. He said Dolton police threatened his crews with arrest.

"They send the police out there like they're their own private Gestapo," Marino said. Would he work in Dolton again? "Not with the Shaws in charge,'' he replied.

As for Deneen, he said his only alternative might be to file a foreclosure suit on the property, hoping a judge will order a sale that will satisfy liens and repay his expenses.

Source: Chicago Sun Times