Chicago's grand experiment. What went wrong? Maybe someone should ask Barack Obama. He's intimately familiar with most of the players. Public housing limbo. All emphasis mine:
Chicago's grand experiment to transform public housing is lagging nearly a decade after Mayor Richard Daley's administration turned to private developers to shape the future of housing for the city's poor.
Conceived amid a rising housing market, the city's Plan for Transformation used hundreds of millions in taxpayer dollars and virtual giveaways of public land to reverse decades of neglect that confined the city's poorest residents to racially segregated ghettos.
Demolition of Chicago's reviled high-rises became a national symbol of change and hope, but little attention has been focused on what happened next as rhetoric collided with realities.
A Tribune investigation found that almost nine years into what was billed as a 10-year program, the city has completed only 30 percent of the plan's most ambitious element tearing down entire housing projects and replacing them with new neighborhoods where poor, working-class and wealthier families would live side by side.
The problems with Chicago's public housing have been well documented. What seems to be missing in all the excellent reporting is accountability. I guess that's because there is none. While so many of Chicago's poor have been displaced, more than a few Chicago insiders are making out quite well. On taxpayer money. Consider Allison S. Davis, Barack Obama's former boss:
As the largest redevelopment of public housing ever undertaken in the country, Chicago's effort mirrors the ambition of other Daley efforts to reshape the city. It also parallels major Daley endeavors in featuring a roster of high-profile allies and friends.
At what once was Stateway Gardens, part of the most infamous wall of public housing in the world, construction is being overseen by a team that includes Allison Davis, a powerful developer with close ties to City Hall. The new Park Boulevard on South State Street sits not far from U.S. Cellular Field, home of the White Sox, on what has become prime real estate. It also stands as the most dramatic example of troubles with the city's strategy.
As of the end of March, Davis' team had managed to complete just 53 of the 439 public housing units planned the lowest number of any CHA development. Another member of the development team has filed for bankruptcy in the wake of the national housing slump.
Although there is a bright spot:
Amid all this, one aspect seems to be prospering: On the site's northeast corner, a Starbucks, Jimmy John's and FedEx Kinko's have moved into one of Park Boulevard's new storefronts.
Guess who controls that property?
Those who control the commercial strip would be familiar to anyone wise to the ways of Chicago: Davis himself and Robert Vanecko, a nephew of the mayor.
How very cozy. The mayor's nephew.
In 1993 Obama was hired as an associate attorney with Davis' Chicago law firm, Davis Miner Barnhill & Galland. That same year, Obama began serving on the board of the Woods Fund of Chicago. In 1996 Davis quit the law firm to become a developer but his former law firm represented him. When Davis needed a little money, he knew where to turn:
Seven years ago, Sen. Barack Obama was on the board of a Chicago charity when his former boss, Allison S. Davis, came looking for money.
At the time, Davis was a developer represented by the law firm where Obama worked, as well as a small contributor to Obama's political campaign funds. He wanted the charity to help fund his plans to build housing for low-income Chicagoans.
Obama agreed. He voted with other directors of the Woods Fund of Chicago to invest $1 million with Neighborhood Rejuvenation Partners L.P., a $17 million partnership that Davis still operates.
As an Illinois state Senator Obama also proved helpful to Davis and his business partner Tony Rezko:
...1998, then-state Sen. Obama wrote to state and city officials urging them to provide funding for New Kenwood LLC, a company formed by Rezko and Allison Davis. Obama wrote the letters, first reported by the Chicago Sun-Times, on Illinois Senate stationery, saying: "This project will provide much needed housing for 4th Ward citizens".
Davis and Rezko made out pretty well on that deal:
The deal included $855,000 in development fees for Rezko and his partner, Allison S. Davis, Obama's former boss, according to records from the project, which was four blocks outside Obama's state Senate district.
Public housing is supposed to benefit low-income families. In Obama's Chicago it's the "insiders" who benefit at the expense of low-income families:
Mixing apartments for the poor with upscale homes was supposed to do more than create diverse neighborhoods. Those expensive homes, city officials argued, also would help pay for the public housing.
Stateway's developers have agreed to use a share of what they earn from home sales for upkeep of the public units. That amount was expected to total about $2 million for the first on-site construction phase, covering 311 public and private dwellings, according to a court filing by Habitat.
But developers are getting something as well: millions of dollars worth of public subsidies to build condos and town homes.
The CHA practically gave away 7 acres at Stateway, paid to clean up the property and picked up the tab to tear down the old high-rises. The city paid millions more for new roads, water pipes and sewers.
Developers say the cheap land - $1 per year for 99 years - and other benefits are needed so they can compete with projects that don't include public housing. Building costs are high at the new communities because of government construction requirements for subsidized properties. The public units also are expensive to build because, from the outside, they're supposed to look the same as the private homes.
Commercial space presented another way for developers at Stateway to make money.
The development team, including Allison Davis, leased that land from the CHA for 99 years in exchange for a one-time payment of about $200,000. It then built the storefronts that were later sold to a firm controlled by Davis and Vanecko, the mayor's nephew, which used money from city employee pension funds to purchase the space for $4.2 million.
The pension funds, in turn, are paying Davis and Vanecko fees to manage their investment in the property.
What say you, Mr. Obama? From the Boston Globe article:
As a state senator, the presumptive Democratic presidential nominee coauthored an Illinois law creating a new pool of tax credits for developers. As a US senator, he pressed for increased federal subsidies. And as a presidential candidate, he has campaigned on a promise to create an Affordable Housing Trust Fund that could give developers an estimated $500 million a year.
But a Globe review found that thousands of apartments across Chicago that had been built with local, state, and federal subsidies - including several hundred in Obama's former district - deteriorated so completely that they were no longer habitable.
Grove Parc and several other prominent failures were developed and managed by Obama's close friends and political supporters. Those people profited from the subsidies even as many of Obama's constituents suffered. Tenants lost their homes; surrounding neighborhoods were blighted.
Among those tied to Obama politically, personally, or professionally are:
Valerie Jarrett, a senior adviser to Obama's presidential campaign and a member of his finance committee. Jarrett is the chief executive of Habitat Co., which managed Grove Parc Plaza from 2001 until this winter and co-managed an even larger subsidized complex in Chicago that was seized by the federal government in 2006, after city inspectors found widespread problems.
Allison Davis, a major fund-raiser for Obama's US Senate campaign and a former lead partner at Obama's former law firm. Davis, a developer, was involved in the creation of Grove Parc and has used government subsidies to rehabilitate more than 1,500 units in Chicago, including a North Side building cited by city inspectors last year after chronic plumbing failures resulted in raw sewage spilling into several apartments.
Campaign finance records show that six prominent developers - including Jarrett, Davis, and Rezko - collectively contributed more than $175,000 to Obama's campaigns over the last decade and raised hundreds of thousands more from other donors. Rezko alone raised at least $200,000, by Obama's own accounting.
One of those contributors, Cecil Butler, controlled Lawndale Restoration, the largest subsidized complex in Chicago, which was seized by the government in 2006 after city inspectors found more than 1,800 code violations.
Is this what Obama means when he says he helped lift neighborhoods stung by job loss?