The Blago Trial

It appears that Jarrett tried to get a contract for Allison Davis, Obama’s former boss. In 1996, Habitat was overseeing the redevelopment of Cabrini Green. Habitat seemed to favor a plan from MCL/ASD LLC. This partnership was the creation of Dan McLean of MCL Development Corporation and Allison Davis. Davis went on to become a major fundraiser for Obama.

In January 1996, Joseph Shuldiner of HUD and and Valerie Jarrett, Executive Vice President of the Habitat Company, the city-sanctioned development manager for the CHA, held a press conference.   The press conference noted that proposals were being considered for the redevelopment of the Cabrini-Green homes, and other CHA properties.  HUD would be providing funds from HOPE VI which would be supplemented by other funds from bonds and from city coffers.  The goal, a radically new Cabrini-Green.   According to the Shuldiner, the “screening committee” was composed of “Cabrini Green residents, CHA, City of Chicago, and HUD officials and two (Mayoral) appointed community representatives.”[1] Although, it was clear in the process that Jarrett had much power in the evaluation process.

“The Habitat Company will be engaged in an extensive evaluation of each of the qualifying proposals, ascertaining their financial, technical, physical, social and aesthetic merits….  To arrive at a successful plan, technical excellence must match community need and conversely we need to know that any plan that the community favors will actually be feasible to build.”[2]

After looking at dozens of proposals, Habitat seemed to come down in support of a proposal by architect and developer Dan McLean, developer for Central Station on the South Side, the residential community of Mayor Daley.  McLean is the President of the MCL Development Corporation.  His proposal would raze most of CG’s 3200 units, home to 7,300 of the city’s poorest people.   In its place would be built low-rise rowhouses.   However, it was not clear in the plan what would be done for the low- income residents.

. . .

McLean’s proposal called for $50 million from the city, state and federal government.   Crain’s Chicago Business reported that McLean was prepared to ask the city to set up a Tax Increment Finance District (TIF) to pay for $5.8 million in site improvements.[3] While the CHA in 1996 had committed only 3 buildings to be razed,  McLean’s proposal called for the demolition of 21 of 23 of the high rises, and total redevelopment of the land in question.  The end result, for McLean, would be “an end to the decades-long debacle of economic and racial isolation, crime and bad politics that have made Cabrini-Green synonymous with the worst ills of public housing.”[4]

While the CHA had asked for 493 public-housing replacement units, McLean offered but 450, more than other proposals.  But he included in that figure “90 proposed single-room occupancy dwellings, along with 54 subsidized units” in nearby apartment complexes such as Evergreen Towers and Evergreen Sedgwick.   His proposal in the final phases would build 2,924 units with 888 subsidized units.   McLean proposed a ratio of 80% market rate units, a higher market component than that suggested by other developers.   Former CHA chief Vincent Lane championed a 60% market rate ratio.

McLean’s plan was six times larger and ten times more expensive than other proposals, but he has the advantage of ties with powerful people including Chicago lawyer Allison Davis and Valerie Jarrett, an official with Habitat Co, and former city planning commissioner.[5] Habitat, Co. is overseeing the development project for Cabrini Green.

In the meantime, getting control of the necessary land to build up to 493 public housing units was becoming difficult.  Since hearing about redevelopment talk, developers have been buying up adjacent land.   The result is that “property values are highly inflated, with tiny single-family lots on blighted streets selling for as much as $300,000.”[6] However, the city controls much of the vacant land around Cabrini.   CHA was seeking to add an additional 10 acres of redevelopment land to the 9.3 acres designated for redevelopment.  There are 70 acres total that Cabrini encompasses.   The overall problem is reconciling two different goals for the area.  According to Valerie Jarrett, “the first is to come up with 493 replacement units.  The other is to maximize the market potential of the area in creating a mixed-income community.”[7]

As a response, MCL/ASD LLC, a developer partnership between Dan McLean and attorney Allison Davis, responded with a proposal to add additional acreage to the development plan.  McLean and Davis control the 20 acres of the former site of Oscar Mayer Foods Corp.   McLean offered a $1 billion plan that would call for “eight market-rate units for every two replacement units,” a stronger market component than the CHA wanted.  McLean would raze 21 Cabrini high rises, would build 1170 market rate units and but 450 replacement units.   These interests would have to be negotiated with the city of Chicago for additional land.   Rosanna Marquez, the mayor’s representative on the Cabrini project, would make more land available, but with stipulations.   The Mayor was “more interested in looking at private ownership or management with agreement that part be used for public housing residents–than with …just handing land over to the CHA.”[8] The Mayor’s ambiguous position can be debated as either looking out for the interest of public housing residents, or extending his political base.

. . .

Residents have vowed to block the razing of any more than three high rises for fear of displacement.  They have argued that replacement housing should be built first.  “Residents, long fearful that Cabrini’s redevelopment is code for moving poor blacks off the highly valuable land, have vowed to block any move to demolish more than three high rises.” [9]

(A Future for Cabrini Green? by Clinton Stockwell 4/18/00)

Jarrett’s Company Grasped for Power

In the process of developing Cabrini Green, Habitat also tried to disenfranchise the poor residents of the project. The Chicago Housing Authority had agreed to give the residents a 51% interest in the redevelopment project. Habitat opposed the agreement and fought to reverse it.

At issue is who is going to control the development at Cabrini Green.  Habitat Company has tried to assume control over the process.   At least 40$ million of HOPE VI funds were to be used at Cabrini-Green.  Habitat fought and won a delay in the use of the funds by blocking an agreement that was previously made between the city, the CHA and Cabrini residents.  The agreement would have given Cabrini residents 51% interest in the redevelopment project.

Carol Steele, a member of Cabrini Green’s Local Advisory Council, stated, that “we have been negotiating for a long time.  After we came to an agreement with the city and the Chicago Housing Authority, Habitat stepped in and said they were not involved in the process.”[10] David Levin, chairman of the Habitat Co, state that Habitat was just doing its job as the court appointed receiver and manager of CHA properties.   Levin accused CHA residents of proceeding “unilateral without us….   They wanted control of the management and the decision-making process.  We did not think that was in the interest of the CHA or the city or the residents.”[11] Levin argued that “the very people complaining are the ones holding up development.”[12]

However, the very people that Levin is talking about are the ones who seek guarantees that replacement housing is built.  Their battle cry is “show me first.”   Suspicious that Habitat and the whole plan to “redevelop” Cabrini-Green is really a plot to take the land, and displace the existing residents, Steele and her co-workers, including the Coalition to Protect Public Housing, are forced to block Habitat’s will, particularly since a former agreement made between key stakeholders is now of no effect.

(A Future for Cabrini Green? by Clinton Stockwell 4/18/00)

[2] Ibid.

[3] Ibid.

[4] Wangenstein,” Bold Cabrini Plan Stirs Dreams,” February 12, 1996.

[5] Ibid.

[6] Betsy Wangensteen, “CHA Wants More Land for Cabrini; Big Redo Hinges on Extra Acres,”  Crain’s Chicago Business, March 18, 1996.

[7] Ibid.

[8] Ibid.

[9] Ibid.

[10] Ibid.

[11] Ibid.

[12] Ibid.