Concern is continuing to grow that U.S. taxpayers might be left picking up the tab if the Obama Presidential Center hits financial trouble, as the foundation behind it has yet to come up with the promised $470 million safety net to protect against the need for a public bailout. A recent investigation conducted by Fox News Digital discovered that multiple contractors and subcontractors have claimed financial losses ranging from hundreds of thousands of dollars to millions on the project.
Some have even said that they are still locked in payment disputes with the Obama Foundation and are looking down the barrel of complete and total ruin days before the facility’s grand opening. The Obama Foundation made an agreement with the city, pledging to create the fund, which is called an endowment, as part of its 99-year deal to take over control of the publicly owned 19.3-acre section of Jackson Park for a one-time fee of $10.
It was previously reported that the foundation had only deposited a million dollars into the reserve fund back in 2021 and that the remaining balance has been mostly unchanged according to its most recent publicly available filings. Concerns over the financial state of the center are nothing new, having raged on for years, especially since construction delays and costs spiked from the original estimated cost of $330 million to $850 million.
According to a report from Fox News, Illinois Republican Party Chairman Robert Grogan said, “One of their core promises was they were supposed to create an endowment as basically an insurance policy so the taxpayers wouldn’t get stuck with the bill. They promised hundreds of millions of dollars for it. It’s still sitting at the $1 million mark [where it stood] when they opened it up. So I don’t believe that they’ve kept that promise.”
The disputes with contractors have renewed concerns over the endowment as critics make the case that the fund was supposed to serve as a backstop if the project came under financial distress. The Obama Foundation disagrees with the notion that taxpayers might end up footing the bill, saying the project is funded purely through private contributions.
Grogan also revealed that contractors and subcontractors are still stuck in payment battles, which makes the mostly unfunded reserve even more of an issue. “The fact that they have created this probably unsustainable edifice to an ego and then, eventually, if it goes under, who’s going to be caught with the bill time and time again? It’s the taxpayers of the city, citizens of Chicago and the state of Illinois,” he said.
New York University law professor Richard Epstein has spent many years challenging the project in court, saying that the reserve fund was intended to protect against this very type of uncertainty. “The whole point of an endowment is to fund future expenses,” he told Fox, going on to add that the endowment is a backup plan if future fundraising for the center falls through.
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“If the endowment hasn’t been filled, the building [could] fall into neglect, it then becomes a safety risk, and it turns out that nobody’s going to pay the bill,” Epstein explained. “The city therefore is going to have to assume additional obligations to make sure that thing is kept in place.” Adamson Plumbing President Mike Owen provided the news outlet with spreadsheets that show his firm is $4 million in the red due to unpaid work.
Owen stated that unnecessary rework, along with delays and more than 100 change-order requests left his company absorbing millions of dollars in additional costs. Omar Shareef, the president of the African-American Contractors Association, told Fox outside the center that several black-owned contractors are also now facing financial hardship because of the project. The Obama Foundation, however, told Fox that it is in complete compliance with its agreement with the city.
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