The saga of the OPC gets curiouser and curiouser
In a presentation to the Economic Club of Chicago on June 4, President Obama made an impassioned plea for local business leaders to take “ownership” of the OPC to assure its completion and future success. In follow-up to that sales pitch, Valerie Jarrett, president of the Obama Foundation, revealed – without comment – that the bricks-and-mortar construction cost of the OPC would be “a little less” than $700 million instead of the $500 million estimate that had been used since plans were first unveiled in 2017. At the same time, Jarrett noted that the Foundation had raised almost $900 million for the OPC, for construction as well as for programming and an endowment.
Those large numbers, presumably meant to inspire new donations, also inspire closer examination. First of all, while it is reasonable to expect that early estimates would be adjusted upward, how could the construction cost increase by 40% all of a sudden, at this late date? Only three months ago (on March 12), the Obama Foundation certified to the City that the Total Construction Budget for the OPC was $482 million and also certified that the Foundation had cash and commitments in hand totaling $485 million, enough (just barely in our estimation) to cover the construction. This certification is a requirement of the City ordinance approving the construction of the OPC in Jackson Park. Those same figures were repeated to the Sun-Times editorial board on April 1, when the Foundation predicted that ground-breaking would be in September.
Was that an April Fool’s joke? How else can you explain such a huge cost increase so late in the planning for the OPC? What has changed since March 12? Did the architects modify some key design (perhaps doubling the height of the already problematic museum tower)? Did the construction firms realize they had misplaced some decimals in their initial estimates? Did the fiscally-challenged City suddenly determine that, having already committed some $200 million in public funds to subsidizing the OPC, it could not also help with the site remediation for a costly underground garage to be built in the marshy soil of Jackson Park? Whatever the explanation, we think clarification is needed to restore public confidence in the Foundation’s management of the project and in its communications with its donors and with Chicago taxpayers.
Further clarification is also needed regarding the requirement to have actual funds and reliable pledges in-hand before construction begins. The impressive fundraising cited by Jarrett – almost $900 million – is the grand total of all donations to the Foundation since it was established in 2014. Much of that has been spent already or earmarked for non-construction uses – youth programming, leadership mentoring and other worthy Foundation initiatives that have already been launched. In 2019, for instance, the Foundation spent some $40 million on staff and programmatic expenses aside from its preparations for the OPC. Comparing the now outdated March 12 certification and the new cost announcement, it is unclear if the Foundation will have $700 million available for a fall ground-breaking.
Also requiring further explanation is the issue of the endowment. The 2018 ordinance specifies that, before construction begins, “The Foundation shall have established an endowment having as its sole purpose paying, as and when necessary, the costs to operate, enhance and maintain the Presidential Center and the other Project Improvements during the [99-year] term of the Use Agreement.” Yet the Foundation told the Sun-Times board in April only that it had “recently voted to establish an endowment which we will look to fund in the coming months and years.” That statement does not seem consistent with the terms of the ordinance, so it was particularly comforting to hear that Jarrett had at least mentioned the endowment in her remarks to the Economic Club. She should be prepared to offer more information about goals and schedule.
As we have said before, the Obama Presidential Center should be built on the South Side to honor President Obama and his achievements. We hope it will be as successful programmatically and as catalytic economically as promised, though we are skeptical of many of the hyperbolic claims (e.g., 750,000 visitors per year). We continue to oppose the current plan for the OPC in Jackson Park: there are less expensive, less disruptive, more park-friendly and economically impactful designs and sites available. But it seems particularly important in a time of great fiscal strain and of widespread distrust of politicians for putting favoritism ahead of due diligence and good management practices that, regardless of the location, the City and the Obama Foundation adhere to established guidelines rather than adopt rhetoric and practices more suitable for Alice’s Wonderland. Transparency and accountability are necessary.
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As always, we thank you.
Brenda Nelms and Jack Spicer
Co-presidents, Jackson Park Watch