Belleville couple say landlord and county worked to destroy their small party business
The 29-year-old owner of a small beauty spa and party room in unincorporated Belleville is going head-to-head with St. Clair County and the Chicago entrepreneur who is her landlord.
Chanae Powell maintains that county zoning officials and sheriff’s deputies have helped the landlord, Jeff Rehberger Jr., and his representatives try to force her out of her commercial space on South Belt West without proper cause and limited her ability to do business.
“I feel like I was being scammed from the beginning,” said Powell, who opened D3 Princess Beauty Shop in 2021 with her husband Demarquo Sanders. They rent two buildings in Far East Center.
According to Powell, she initially wondered if she was facing racial discrimination as a Black businesswoman. Later, she came to believe the landlord wanted to open a marijuana dispensary in her space.
“That’s absolutely, 100% not true,” said the landlord’s father, Jeff Rehberger Sr., of Highland, who operates a video-gambling lounge in the center as part of his Lacey’s Place chain.
“I think everybody freaked out about this shooting in the parking lot,” he said. “... It was almost like a riot down there, and there must have been kids running around with alcohol and stuff. It’s kind of a bad situation.”
Rehberger Sr. was speaking of a disturbance last year that involved a large gathering of youths and shots fired at two trucks outside D3 while a birthday party was being held inside. County officials began scrutinizing Powell’s operation and cited her for a zoning violation while also admitting they had given her incorrect information when she opened in 2021.
Powell said the landlord’s representatives and county officials have perpetuated the myth that she’s an irresponsible business owner and that the disturbance was her fault.
Rehberger Jr. is the principal in Midwest Real Estate Portfolio One LLC, which owns Far East Center. His other businesses include Lucky Lincoln Gaming, one of the largest video-gambling operators in Illinois; and Cloud9 Cannabis, which is constructing a building in Edwardsville for its second dispensary.
Rehberger Jr. declined to comment for this story through his Belleville attorney, Brian Flynn. Two people identified as the center’s property managers didn’t return phone calls.
“The property’s eviction and zoning proceedings are a matter of public record, and the record speaks for itself,” Flynn wrote in an email.
Flynn was referring to two cases that Powell and Sanders won in St. Clair County Circuit Court last fall. One involved the citation by sheriff’s deputies alleging that the couple had violated a zoning ordinance, and one was an attempt by Midwest Real Estate Portfolio One to evict them.
Actions follow disturbance
Powell and Sanders, who live in Belleville, say that Midwest Real Estate Portfolio One representatives have been changing rules, making false accusations and generally treating them poorly for no good reason ever since the company bought Far East Center 16 months ago.
Fellow tenant Pat Gotto-Sauget, who owns Lucky Jack’s video-gambling lounge in the center, agreed that they had been “picking on” Powell.
“I’ve had so many problems with her,” Rehberger Sr. told sheriff’s deputies during an inspection of D3’s two buildings last year, as shown in surveillance video viewed by the BND.
County records related to the business date back to May 14, 2022, when a large crowd of youths congregated in the center’s parking lot, apparently hoping to see a St. Louis rapper who had been hired to perform at a private birthday party in the D3 party room.
Shots were fired at two trucks parked at Steve Harter Autobody next door, and some of the youths headed down to the Circle K gas station.
“Due to the large unruly crowd and the inability for deputies and officers from the Belleville Police Department to gain control of the situation, emergency assistance was requested (from surrounding communities),” the sheriff’s department report stated.
The city of Belleville refused to provide its police report on the disturbance in response to a Freedom of Information Act request from the BND, giving the reason that it involved juveniles.
A red Chevy truck was hit four times and and a white GMC truck was hit once outside the auto-body shop, according to the sheriff’s department report. Illinois State Police recovered nine 9mm shells.
No injuries were reported. Officers from 10 police departments spent about two hours helping sheriff’s deputies clear the scene.
In court, Powell and Sanders argued that they didn’t break the law or their lease agreement and they had no control over youths gathered in the parking lot. Judges ruled in their favor in September.
Even so, county Zoning and Building Director Anne Markezich stuck with her May 2022 determination that the couple could no longer book parties in their party room without obtaining a special-use permit because of the area’s B2 (general business district) zoning. That’s despite the fact employees in her office told them they didn’t need one when they opened.
Rehberger Jr. wouldn’t sign off on the permit, Powell said, which essentially shut down half her business.
“The current business ‘D3 Princess Beauty Shop’ shall continue to (operate) as usual,” Markezich wrote in a letter to Powell on May 20, 2022. “The use of Banquet Hall must cease and (desist) operation immediately.”
Markezich didn’t return multiple calls from the BND for comment.
Powell and Sanders have considered filing a lawsuit of their own, asking the landlord and county to reimburse them for the tens of thousands of dollars they say they’ve spent on renovations and legal fees, as well as lost income due to their inability to book parties.
The couple pay $2,200 a month in rent for the two buildings.
“It’s just not right,” Powell said. “It’s not fair that everybody else can go on with their lives and their jobs, and we’re still suffering.”
A place for pampering
Powell is a prekindergarten teacher at Powell’s Academy, her family’s child-care center in East St. Louis, and a part-time caseworker assistant with Lutheran Children and Family Services in Belleville. She also heads a nonprofit organization called Saving the Next Generation.
Sanders is unit coordinator with the Transitional Center in East St. Louis and a former mail carrier.
The couple opened D3 Princess Beauty Shop for girls in December 2021 after spending two months and an estimated $35,000 to renovate two vacant buildings at Far East Center, which was formerly anchored by a martial-arts studio. “D3” refers to their three daughters, ages 3 to 8.
A large hot-pink room at 811 South Belt West features throne-like chairs for pedicures, as well as make-up, dress-up, painting and manicure stations.
“It’s a spa-like experience where girls can get pampered,” Powell said.
A hallway leads to a more traditional party room at 813 South Belt West. Powell and Sanders said they told the center’s former owner, Rowden Enterprises, their original landlord, that they planned to use the space for girls birthday parties and other functions when they signed the lease in September 2021.
The couple also went to the St. Clair County building and zoning department office to ask about zoning regulations. An employee told them they didn’t need a special-use permit unless they were serving alcohol, gambling or selling food, according to Powell.
Markezich, the zoning and building director, verified this in a June 7, 2022, email to Powell that the BND obtained from the county through a Freedom of Information Act request.
“To be honest, you were told incorrect information when you started D3 and when it came to my attention you had already opened,” Markezich wrote. “I let it go because my office made a mistake.
“I will be the first to admit I made a mistake and take responsibility for it, you should of never been able to open D3. This is what I get for trying to be nice and not shut down D3.”
Powell and Sanders said they would have had no problem getting the former landlord to sign off on a special-use permit in 2021 if they had known it was required since it was the landlord’s property manager who suggested converting the space into a party room in the first place.
Center under Vast umbrella
St. Clair County property records show that Midwest Real Estate Portfolio One bought Far East Center in December 2021.
Rehberger Jr. is a Highland native who now lives in Chicago. He’s CEO of the private-equity firm Vast, according to the Illinois Business Journal, which published a story in 2022 about his plan to develop a chain of gas stations and convenience stores called Lindy’s.
The story listed other companies under the Vast umbrella, including Lucky Lincoln Gaming, Lucky Coin, Highland Crypto Technologies, Midwest Real Estate Investments of Illinois, MRE Community Solar, Cloud9 Cannabis and Aviator Coffee.
Last year, Rehberger Jr. announced plans for a $50 million investment in Highland that would consist of a housing development, a hotel, restaurants and the flagship location of a coffee-shop company that he hoped to expand nationally with franchises.
“I’ve developed deep-rooted personal relationships in (downstate Illinois communities), which inform my understanding of the needs of those who live there and the economic possibilities for growth,” he told the Edwardsville Intelligencer and The Telegraph in Alton.
“Now that I’m fortunate enough to have the opportunity to reinvest in these communities, I want Lucky Lincoln to be a part of that growth … in terms of job creation, charity and economic development.”
Lucky Lincoln Gaming operates more than 1,200 video-gambling machines in 169 locations. It earned $48.7 million in 2019, the year before the COVID-19 pandemic hit, according to an investigative report by WBEZ radio, the National Public Radio affiliate in Chicago.
A 2020 investigation focused on how Fortunate Son Partners, another one of Rehberger’s limited-liability companies, was able to compete for state marijuana-dispensary licenses, despite years of attempts by state regulators to revoke his video-gambling operator’s license.
Complaints for disciplinary action filed by the Illinois Gaming Board against Lucky Lincoln Gaming in 2017 and 2019 are now in the administrative-review process, according to Joe Miller, the agency’s director of policy.
“Gambling regulators say Rehberger’s Lucky Lincoln Gaming violated state law, doing business in a way ‘that would discredit or tend to discredit the Illinois gaming industry or the state of Illinois,’” WBEZ reported. “(Regulators) also allege Rehberger engaged in ‘witness harassment’ to try to get a former sales representative to change his testimony against him in an Illinois Gaming Board investigation.”
Disputes examined in court
Several disputes between Powell and Sanders, Midwest Real Estate Portfolio One and St. Clair County came to light during court hearings held in September 2022 to consider the citation for a zoning-ordinance violation and an eviction notice for D3 Princess Beauty Shop.
Some disputes revolved around the “Sweet 16” birthday party held on May 14, 2022. It included a show by Sexyy Red, a St. Louis rapper known for her sexually-explicit lyrics and provocative performances.
Red was hired by customers who rented the space and planned the party, which was a private event, according to Powell.
St. Clair County sheriff’s deputies were dispatched to Far East Center at 10:20 p.m. to investigate a caller’s report of shots fired and a large crowd outside, according to a written report submitted by Deputy Richard Dale.
“Upon arrival, I observed between 200 and 300 individuals inside of the building at 813 South Belt West which was being used for a party,” he wrote. “The host of the party Nykia Miller said someone had fired shots in the neighboring lot which was located at 829 South Belt West.
“As Deputies were clearing the area outside there was a report of shots being fired inside of the building which was later determine to be false.”
Steve Harter Autobody is at 829 South Belt West. The owner couldn’t be reached for comment.
Miller, the birthday girl’s aunt, testified in court that only about 75 people attended the party and that a private security guard stationed at the door refused entry to anyone not on a list of invited guests.
“I guess some people found out there was going to be a celebrity there, and that’s why all the kids started coming, but we told them, ‘You can’t come in,’ and they left with no problem,” said Miller, of Belleville, noting some youths had apparently taken buses from St. Louis.
“The police were even helping us do that. It’s like we were all working together. Nothing happened on our premises. Everything went good, and the police were very nice.”
Major Brad Clossen, sheriff’s department spokesman, said this month that deputies believe about 300 people were in the vicinity that night and more than 75 entered the building, but the situation was chaotic and fluid, making crowd estimates challenging.
Powell and Sanders said they questioned Dale’s indoor estimate, even though their space can legally accommodate 300 people, because Markevich and the landlord used it to make them seem irresponsible.
“I am sure you are aware of the incident on Saturday, May 14, 2022, at said property, between 200 and 300 individuals inside of the building according to the Sheriff’s Department Incident Report,” Markezich emailed on May 23, 2022, to Laura Berry, one of Far East Center’s property managers.
“The tenant has created a banquet hall in the back portion of the structure and sub-leases it out. We believe that the event in the banquet hall was the cause of the incident but it is still being investigated.”
As for Rehberger Sr.’s comment about underage drinking, Miller told the BND that no drinking or smoking was allowed at the birthday party, and if it had been, police would likely have shut it down. The sheriff’s department report didn’t mention alcohol.
Inspection and eviction
In another dispute, Powell and Sanders questioned why they weren’t notified on May 19, 2022, when Rehberger Sr. unlocked the door to D3 Princess Beauty Shop and let Markezich and two St. Clair County sheriff’s deputies enter the building to conduct an inspection.
The couple saw the group in their lobby via a live feed that came over Powell’s cellphone as part of their security system. They drove down to see what was going on.
In the surveillance video, Sgt. James Hendricks is heard asking Rehberger Sr. if the tenants knew county officials were coming that day, and Rehberger Sr. answered, “Yeah.”
“That was a lie,” Powell said.
Rehberger Sr. told the BND he “happened to be there” when Markezich arrived, and she instructed him to open D3’s door so she and the two sheriff’s deputies could check for zoning violations.
According to Sanders, sheriff’s deputies gave him a different explanation.
“They told me that they were there to check cameras to see if they could find any footage of the shooters (on May 14),” he said. “And then we watched the video and found out they were there to look at the party room.”
Clossen, the sheriff’s department spokesman, said Illinois law doesn’t require tenants to give permission for inspectors to enter rented commercial spaces, and it’s not unusual for building and zoning officials to ask sheriff’s deputies to accompany them on inspections.
“Our zoning does that because they are unarmed, and some of the places they go, there could be problems,” Clossen said. “They’re going there because there are issues (with possible violations).”
Clossen said zoning citations are normally issued by building and zoning officials. In this case, it was Hendricks who cited Powell for “operating a business without proper licensing.”
A bench trial was held on Sept. 13, 2022, in St. Clair County Circuit Court. Associate Judge Tameeka Purchase found Powell not guilty after hearing testimony by Powell, Sanders, Miller and sheriff’s deputies and learning that a building and zoning employee had told the couple that they didn’t need a special-use permit for the business.
In June 2022, Midwest Real Estate Portfolio One filed an eviction complaint in court, charging that Powell and Sanders had violated their lease but refused to vacate the property.
“Said defendants have allowed activities on the premises that: a) are dangerous to life and limbs; b) have injured the reputation of the building; c) are in violation of the B-2 General Business District of the St. Clair County Code; d) are illegal and immoral in purpose; e) are noisome, noxious, noisy or offensive; f) interfere with the other Lessees and those having business with them.”
Associate Judge Kevin Hoerner dismissed the case on Sept. 7, 2022, after the couple’s attorney, Amy Bailey, argued that the landlord had issued a five-day eviction notice that was improper under the terms of their lease.
Bailey also argued that Powell and Sanders couldn’t be issued a 10-day notice because they hadn’t violated the lease.
Another tenant out, too
Gotto-Sauget, the owner of Lucky Jack’s gambling lounge, said she understands that landlords can rent to whomever they want. She noted that Midwest Real Estate Portfolio One is refusing to renew her own lease, which expires in August, so she plans to move this summer.
But Gotto-Sauget said she doesn’t understand why St. Clair County seems to be working against Powell, describing her as a hard-working and conscientious businesswoman who came up with a creative idea, did her research and made a big investment.
“She’s trying to make a living over there,” Gotto-Sauget said. “I think it’s a really cool business myself. It’s a cool use of that building.
“I have no earthly idea what’s going on with zoning. How do they approve somebody one minute and let them operate a business and go through everything they have to go through, all the drawings and everything else, and then turn around two years later and tell them they’re not zoned for that?”
Gotto-Sauget said Rehberger Sr. told her that his son could open a marijuana dispensary at the center if he saw fit and suggested that she start using video-gambling machines owned by Lucky Lincoln Gaming, Rehberger Jr.’s company, at Lucky Jack’s.
Gotto-Sauget said she already had a contract with another machine operator and didn’t want to be involved with Lucky Lincoln Gaming, given its legal problems with the Illinois Gaming Board.
“(The Rehbergers) are the worst thing that ever happened to the gambling industry,” she said.
D3 Princess Beauty Shop’s lease expires in September with an option to renew for one year, but that’s not going to happen under Rehberger Jr.’s ownership, according to Powell and Sanders. They say they’re not sure how to proceed after losing so much of their investment.
Powell said she knows that they were young, inexperienced and perhaps naive when they first opened the business, but she believes they got caught up in a system that didn’t do them justice.
“We followed every rule and instruction given to us in the many conversations we had prior to us opening,” Powell said. “All of that led to us being hoodwinked by the people we thought we were partnering with to make a positive impact on the youth and the community.”
