OK, Ms. Jarrett, let’s take a look at these reasons. We’ll start with the last one.  “I don’t need to tell you just what a tough time this is right now.”  Yes, we all know how tough times are right now.  With 9.7% unemployment, 9.4 million bankruptcies in the last year, as well as 2.8 million home foreclosures, it’s hard to forget.  But, you see, you and the White House are currently pushing a narrative of recovery, of the stimulus having been a success, of things being better now.  Supposedly things are better than they were in September 2009 when unemployment was at 9.8% and the stimulus bill had not had the time to save/create the thousands/millions of jobs (by the way, Ms. Jarrett, have y’all at the White House decided how many yet, and whether they were saved or created or both?)/  Of course last September was also when the President ran off (at your urging) on a last-minute trip to the International Olympic Committee meeting in Copenhagen to support his home town of Chicago in its spectacularly unsuccessful bid to host the 2016 Olympic Summer Games.

And things must certainly be better for you and the White House now than they were in December 2009, when unemployment hit 10% and the United States was saved from a terrorist attack not by the effectiveness of our security systems, but by the fortunate ineptitude of the terrorist; that same month of December when Pres. Obama once again traveled the 7,958 mile round-trip to Copenhagen to receive the Nobel Peace Prize.

So, you see, we’re a little confused.  Apparently the current state of the Union (better now than it has been according to you and the White House) is so precarious that the President cannot take the time to make the 4,882 mile round trip to Vancouver, on the same continent, and mere miles from the U.S. border.   How is it, then, that twice in the past six months when the state of the union was even more precarious, was he able to take the time to travel farther, and to a different continent nowhere near the U.S. homeland?  He could take time to travel to Denmark, a not particularly strong or influential ally, but not to Canada, our neighbor, largest trading partner, and biggest supplier of petroleum and crude oil?  He could twice take time to address an international body in Copenhagen, but not to see the international athletes and several of their heads of state gathered in Vancouver?  We don’t quite buy that.

Next.  “He has a pretty full plate right now.” First off, let’s stipulate that every president’s plate is always pretty full.  That said, is it any more full than it was last September or December?  I seem to remember Congress being in session almost the entirety of both those months, yet precisely this week in February 2010, the opening week of the Olympics, Congress is in recess for President’s Day.  Of course, the President can still have a full schedule without Congress being in session.  What then did he do this weekend?  Apparently, he spent it at Camp David and after 12:00 pm on Friday the 12^th had no more public events until Tuesday, February 16.  Hmmm… it doesn’t seem that the President’s plate was all that full.

And finally, “the Vice President really wanted to go and this was important to him.”  The President decided not to go to Vancouver because “the Vice President really wanted to go”?  Could they not both make an appearance, like they recently did at the Georgetown-Duke game?  You’re asking us to believe that Pres. Obama snubbed Canada, their Prime Minister (who had to meet with the veep, instead) and their Olympics, to make Joe Biden happy?  Are you saying that Pres. Obama is not the serious man you all claim that he is?  Not likely.

So what is the real reason, Ms. Jarrett?  An analysis of the trips might shed some light.  The trips to Copenhagen were trips to see left-leaning international bodies, in left-leaning cities, with left-leaning national governments, and the President was expecting to walk away in triumphant glory.  The Nobel Committee fulfilled on all accounts.  The International Olympic Committee basically snubbed the President.  Now we have Vancouver: left-leaning international body, left-leaning city, with oh! a right-leaning national government, and no expected triumph or glory for the President, but, in fact, the reminder of a what had to have been a painful snub.

Hmmm… as always, Ms. Jarrett, reading between the lines of your comments is always very enlightening.

Valerie Jarrett decided that she couldn’t take that.  “It was definitely a cheap shot and completely unwarranted,” she told Politics Daily.  She then went on to define what is warranted:   NYT columnist Paul Krugman, “somebody who is held out as a world expert who actually has taken the time to understand what’s in the bills and who was critical early on (but) is now supportive. That says something to me about people who take the time to be well reasoned. And when you listen to people say on the extremes what’s in the bill and it’s apparent that they have not actually read the bill . . .”

Well, Ms. Jarrett, that leads to a few questions.  First of all, which bill are you talking about?  The House bill, or the Senate bill?  From what I understand they are both over a thousand pages in length.  And every day there seems to be a new draft.  And the draft that might become law, the one that Congressional leadership will come up with trying to reconcile the House and Senate bills, doesn’t even exist yet.  So which one should Americans spend the time that it takes to read a thousand pages reading?

Incidentally, not even our representatives in Congress, whose job it is to legislate, do not even have time to read the legislation (which leaves you wondering what else they are doing with their time). As Rep. Steny Hoyer (D-MD) laughingly told us back in July, “… staff and review boards, they read [the bills] in their entirety. They go over it with members.”

Second, have you ever tried to read a thousand page Congressional bill? Those of us who have can tell you that it only makes sense to someone with encyclopedic knowledge of the U.S. code.   So really, in the end we have to trust what “experts”, Paul Krugman, for example, tell us the bill says, and they, of course, have no ideological bias.

Finally, Ms. Jarret, as Senior Advisor to the President and Director of not one, but two, White House offices, not to mention dinner hostess and vacation buddy to the First Family, you are obviously extremely busy.  Have you read the healthcare bill?

The viperish ogres at People for the (Anti)American Way have picked the wrong target for their latest their fundraising screed. Accustomed to watching their quarry turn tail and run while they greedily fleeced their dwindling gaggle of gullible loons, they decided to turn their guns on the gang at Americans for Limited Government.

In the words of Arno’s Last Action Hero, “Big mistake.”

The PAW crew accused ALG of “McCarthyism;” proving anew that their antiquated copywriters haven’t updated their glossaries since Norman Lear gathered them around his Underwood and taught them to spell “meathead” and “dingbat.” About 90% of Americans today don’t know McCarthy from Fibber McGee. And 90% of those who do know don’t care.

The basis for PAW’s baseless charge was as absurd as the accusation itself: they didn’t think it was nice for ALG to tell the truth about Obama cohort and Chicago moll, Valerie Jarrett. ALG had disclosed that Jarrett – who made a fortune as a Windy City slum lord – was the White House eminence grise behind some of Obama’s most radical appointments.

That includes self-avowed Marxist Van Jones; homosexual proselytizer Kevin Jennings (as “safe schools” czar, no less); animal rights extremist Cass Sunstein (who believes cows should be able to sue farmers); and FEC “diversity” czar Mark Lloyd, who sees freedom of speech and the press as a “distraction.” If you can really “tell a person by the company he (or she) keeps,” Ms. Jarrett could give Nurse Rached a run for her money.

Valerie Jarrett, of course, is what she is – and People for the (Anti)American Way ought to learn to live with it. But, then, of course, they wouldn’t be able to raise money on false accusations in Valerie Jarrett’s phony defense. And when an organization has built a lengthy reputation as the leftwing’s leading bodyguard of liars, it’s tough to chuck it all over an inconvenient truth.

So, PAW made the mistake of lying about ALG. Just as it has anyone and everyone who dares to dissent from liberal orthodoxy. Just as it does every time it thinks it can make a quick buck off sliming its enemies and touting a radical agenda.

Not too long ago, PAW raked in a small fortune telling its unknowing members that the evil Republicans then in control of the Senate were plotting to destroy the Constitution by outlawing the filibuster. Nothing could have been further from the truth – the GOP just wanted to limit debate on judicial nominees. But, with PAW, when money talks, truth walks. So, they perpetrated their lie.

More recently, PAW fundraisers decided they could make a carnal buck by accusing Sarah Palin of wanting to turn America into “country where gay and lesbian citizens are discriminated against.” Of course, they didn’t bother disclosing where they got this juicy piece of misinformation – since “made it up” doesn’t sell too well in direct mail copy.

And then, just a few weeks ago, the PAW collection agents sent out an email pitch saying they needed to build up a massive war chest to help take out “census-fearing GOP Rep. Michelle Bachman, who has become her own punch line.”

Now, of course, as most Americans know, the feisty Minnesota Congresswoman doesn’t fear much of anything, including the census. But, she was ready to fight tooth and nail to keep the census from falling into the hands of either the ACORN crime family, or Obama hit man Rahm Emmanuel – both of whom tried to seize control of it over the past six months.

Here’s a tell tale sign of just how fast and loose PAW plays with the facts: the Minnesota Congresswoman spells her first name with one “l” and her last name with two “n’s”. If PAW’s greedy, grasping money-mongers are so eager to get their clammy hands on filthy lucre that they can’t even spell “Michelle Bachman” right, what other facts do you think they might have conveniently glossed over in their hasty pursuit of ill-gotten gains?

So, apparently emboldened by the success to date of their fundraising fact bashing, the organization’s gluttonous nibs decided to go after ALG. And they have pulled back a bloodied PAW.  ALG president Bill Wilson quickly dispatched a letter to PAW’s top dog telling her to put up, or shut up. Show us one false charge we made against Valerie Jarrett, or zip it, Wilson cautioned.

In short: big mistake, PAW. You see, there are some conservative action heroes who don’t take kindly to getting slimed by leftwing money grubbers. So, stand by.

Carter Clews is the Executive Editor of ALG News.

From Jeffrey Young:

Reid, Baucus & Dodd are huddling right now with White House aides Jarrett, Messina & DeParle.

1. Valerie Jarrett’s Grove Parc Fiasco:  The Rich Got Richer: “In 1987, U.S. District Judge Marvin Aspen had appointed Habitat to oversee construction of all public housing in Chicago as part of the historic Gautreaux case, which found that the CHA had failed for decades to integrate housing.  At first, Habitat’s job was to desegregate housing by building “scattered site” units in more affluent white neighborhoods across the city. But the effort had little impact. The company built about 1,800 units, mostly in lower-income Hispanic neighborhoods before the program ended.”
2. Valerie Jarrett’s Underwater Demolition:  Cataloging Failure: Mayor Daley was displeased when Jarrett lost Spiegel, a catalog company which had operated warehouses in Chicago for 88 years. Daley wanted a more aggressive effort from the Department of Planning and Development. The company wanted to relocate its old warehouses. Her department proposed six sites, but Spiegel found all of them to be deficient. The best site was covered with 20 to 30 feet of water. Jarrett promised that the site could be filled-in in time to meet Spiegel’s deadline, but the company did not believe it.
3. Valerie Jarrett and Cecil Butler:  Partners in Slime: Cecil Butler started managing the Lawndale Restoration, a low-income community in 1974. In 1995, Cecil Butler received a $51 million loan, backed by the state, to renovate Lawndale Restoration. In 1999, Valerie Jarrett’s Habitat formed an LLC with Butler’s Boulevard Management. In 2000, Cecil Butler hired the Habitat Company to manage Lawndale Restoration.
4. The Valerie Jarrett Health Care Plan: In 2004, Jarrett’s Habitat Company violated the Family and Medical Leave Act by terminating an ill employee. David Burnett had been employed with Habitat for fourteen years. His boss had no problems with him until late 2003 when Burnett began to have symptoms of prostate cancer.
5. Valerie Jarrett’s Cronies See “Green”: 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.

Even as Burnett went to medical appointment after medical appointment, Habitat showed little concern for his health. Just before Burnett was officially diagnosed with cancer, Habitat terminated him.

In 2006, the Seventh Circuit of the US Court of Appeals ruled that Habitat had broken the law by denying Burnett the medical leave to which he was entitled. At no point along the way to this ruling did Jarrett intervene to try to right the wrong.

(David Burnett v. LFW, Inc. d/b/a The Habitat Company)

According to ACORN, problems at the property included “cracked masonry, defective porches, rodent infestation, leaks, broken doors, missing locks, and standing water.” HUD estimated that repair costs for the nearly 1,000 salvageable units to be $44.9 million, or about $45,000 per unit.

In 2005, Lawndale restoration tenants marched against Cecil Butler demanding the removal of the slumlord.

“Cecil Butler has got to go, we don’t want to see him no mo’!” shouted Anna Morrison a 30-year tenant of the Lawndale Restoration Apartments.

Morrison was one of 100 tenants and members of the Lawndale Neighborhood Organization that Jan. 31 paid a visit to Joseph Galvan, regional director of the Department of Housing and Urban Development. They demanded that HUD immediately take over as property manager of 100 buildings in the Lawndale community.

HUD has told tenants foreclosure proceedings against Butler have started, but his management company, Habitat Boulevard, is still responsible and receiving payments for taking care of the buildings.

. . .

“I have been living in these buildings for over 20 years and they have never done a good job of keeping up the buildings or responding to tenants requests for service,” said Satria Martin, at a recent meeting of the west side tenants.

Though tenants are happy HUD has begun foreclosure proceedings, they were shocked to learn Butler and Habitat are still being kept as the management company. Butler, who hasn’t paid his $400,000 mortgage in five months, was instructed by HUD to use the money to keep up the properties. Tenants have seen no evidence of improvements. With the buildings already in foreclosure, tenants fear Habitat will scrimp on already poor service.

“They never did anything to begin with so you can’t expect them to spend more money now that they know the buildings are in foreclosure,” said Rosalyn McComb, a 10-year tenant of the properties.

The mortgage for the properties is insured by HUD, thus Butler’s company will not be required to pay the note. Tenants are asking HUD to take over as “mortgagee in possession” that would make HUD responsible for bringing in a new management company to maintain the buildings. “In addition to not getting things fixed, I have to sweep and mop the hallway and the staff constantly treats the tenants with no respect,” said McComb.

. . .

Sparked by tenant complaints of problems throughout his buildings the city Department of Buildings inspected all of Butler’s properties finding a huge number of violations.

The situation was highlighted in a Nov. 21 front-page Chicago Tribune article that showed Butler used money from the properties to finance deals in the affluent Gold Coast section of Chicago.

(Online Disclosure January-February 2005)

Jarrett Failed Tenants; Building Collapsed

In 2004, a woman backed her vehicle into one of the buildings, and it partially collapsed. That same year, the city of Chicago requested the federal government take control after inspectors found 1,800 code violations in units that were “dilapidated to the point of being uninhabitable.” These problems included leaky roofs, rats, crumbling walls, exposed wires, and pools of sewage. Over a four year period, the city of Chicago sued Butler and his businesses 50 times for failing to keep Lawndale Restoration up to code. Although an alderman’s brother’s security firm was paid $2.75 million over a four year period to provide security guards, residents still did not feel safe.

Residents have complained for years of poor maintenance and the city reported 1,800 violations in the 100 scattered buildings after doing inspections at the request of the tenants.

. . .

Butler and his company have been under heavy scrutiny since September 2004, when a car backed into a pillar of one of his properties. The car was barely moving but the building partially collapsed.

(Online Disclosure January-February 2005)

According to the Chicago Tribune, Butler “presided over a flow of more than $150 million in government funds through the apartments.” Rent payments alone amounted to over $10 million per year. In 2006, Lawndale Restoration was seized by the federal government.

In 2006, in the final disposition of the dissolved Lawndale Restoration, its properties were sold back to the City of Chicago for $10 (ten).  And, the U.S. Department of Housing & Urban Development (HUD) assumed the $51 million debt at the foreclosure sale. Butler walked away. Twenty-three smaller profit and non-profit developers eventually assumed responsibility for the properties.

(Daily Musings 9/12/08)

Poor Suffered in Squalor; Slumlord and Democrats Cashed In

Butler is a very generous donor to Democrats, including Obama. He continued to give generously even after he fell behind on his HUD-subsidized mortgage for Lawndale Restoration.

One of those [Obama’s] 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.

Butler and [Allison] Davis did not respond to messages. Rezko is in prison; his lawyer did not respond to inquiries.

. . .

Under Mayor Richard M. Daley, who was elected in 1989, the city launched a massive plan to let private companies tear down the projects and build mixed-income communities on the same land.

The city also hired private companies to manage the remaining public housing. And it subsidized private companies to create and manage new affordable housing, some of which was used to accommodate tenants displaced from public housing.

Chicago’s plans drew critics from the start. They asked why the government should pay developers to perform a basic public service – one successfully performed by governments in other cities. And they noted that privately managed projects had a history of deteriorating because guaranteed government rent subsidies left companies with little incentive to spend money on maintenance.

Most of all, they alleged that Chicago was interested primarily in redeveloping projects close to the Loop, the downtown area that was seeing a surge of private development activity, shunting poor families to neighborhoods farther from the city center. Only about one in three residents was able to return to the redeveloped projects.

“They are rapidly displacing poor people, and these companies are profiting from this displacement,” said Matt Ginsberg-Jaeckle of Southside Together Organizing for Power, a community group that seeks to help tenants stay in the same neighborhoods.

“The same exact people who ran these places into the ground,” the private companies paid to build and manage the city’s affordable housing, “now are profiting by redeveloping them.”

Barack Obama was among the many Chicago residents who shared Daley’s conviction that private companies would make better landlords than the Chicago Housing Authority.

He had seen the failure of the public projects in the mid-1980s as a community organizer at Altgeld Gardens, a large public housing complex on the far South Side.

He once told the Chicago Tribune that he had briefly considered becoming a developer of affordable housing. But after graduating from Harvard Law School in 1991, he turned down a job with Tony Rezko’s development company, Rezmar, choosing instead to work at the civil rights law firm Davis, Miner, Barnhill & Galland, then led by Allison Davis.

The firm represented a number of nonprofit companies that were partnering with private developers to build affordable housing with government subsidies.

Obama sometimes worked on their cases. In at least one instance, he represented the nonprofit company that owned Grove Parc, Woodlawn Preservation and Investment Corp., when it was sued by the city for failing to adequately heat one of its apartment complexes.

. . .

In 2001, Obama and a Republican colleague, William Peterson, sponsored a successful bill that increased state subsidies for private developers. The law let developers designated by the state raise up to $26 million a year by selling tax credits to Illinois residents. For each $1 in credits purchased, the buyer was allowed to decrease his taxable income by 50 cents.

Obama also cosponsored the original version of a bill creating an annual fund to subsidize rents for extremely low-income tenants, although it did not pass until 2005, after he had left the state Senate.

. . .

The developers gave Obama their financial support. Jarrett, Davis, and Rezko all served on Obama’s campaign finance committee when he won a seat in the US Senate in 2004.

. . .

. . .

Chicago’s struggles with the deterioration of its subsidized private developments seemed to reach a new height in 2006, when the federal government foreclosed on Lawndale Restoration, the city’s largest subsidized-housing complex. City inspectors found more than 1,800 code violations, including roof leaks, exposed wiring, and pools of sewage.

Lawndale Restoration was a collection of more than 1,200 apartments in 97 buildings spread across 300 blocks of west Chicago. It was owned by a company controlled by Cecil Butler, a former civil rights activist who came to be reviled as a slumlord by a younger generation of activists.

Lawndale Restoration was created in the early 1980s, when the federal government helped Butler take control of a group of old buildings, including lending $22 million to his company to redevelop the buildings and agreeing to subsidize tenant rents. In 1995, Butler’s company got a $51 million loan from the state to fund additional renovations at Lawndale Restoration. In 2000 Butler’s company brought in Habitat Co. to help manage the complex.

Nonetheless, the buildings deteriorated badly. The problems came to public attention in a dramatic way in 2004, after a sport utility vehicle driven by a suburban woman trying to buy drugs struck one of the buildings, causing it to collapse. City inspectors arrived in the ensuing glare, finding a long list of code violations, leading city officials to urge the federal government to seize the complex.

In the midst of the uproar, a small group of Lawndale residents gathered to rally against the Democratic candidate for the US Senate, Barack Obama.

Obama’s Republican opponent, Alan Keyes, trailed badly in the polls and was not seen as a serious challenger. But the organizers had a simple message: Cecil Butler had donated $3,000 to Obama’s campaign. Habitat had close ties to Obama. And Obama had remained silent about Lawndale’s plight.

Paul Johnson, who helped to organize the protest, said Obama must have known about the problems.

“How didn’t he know?” said Johnson. “Of course he knew. He just didn’t care.”

Butler did not return messages but in the past has said the government did not give him enough money to maintain the project. Habitat emphasized in a statement that its role at Lawndale was restricted to tasks that included financial oversight and management.

In 2006, following the foreclosure, the federal government sold the buildings to the city for $10. The city has since parceled out the buildings among two dozen developers, who are rebuilding Lawndale for the fourth time with yet another round of government loans and subsidies.

Even as Lawndale Restoration and Rezmar’s buildings were foreclosed upon, and Grove Parc and other subsidized developments fell deeper into disrepair, Obama has remained a steadfast supporter of subsidizing private development.

And although he has distanced himself from Rezko, Obama has remained close to others in the development community. Jarrett participates in the campaign’s senior staff meetings. And Obama chose another close friend, Martin Nesbitt, as his campaign treasurer. Nesbitt is chairman of the Chicago Housing Authority, one of the key overseers of the shift toward private management and development.

. . .

Some people in Chicago’s poorest neighborhoods are torn between a natural inclination to support Obama and a concern about his relationships with the developers they hold responsible for Chicago’s affordable housing failures. Some housing advocates worry that Obama has not learned from those failures.

“I’m not against Barack Obama,” said Willie J.R. Fleming, an organizer with the Coalition to Protect Public Housing and a former public housing resident. “What I am against is some of the people around him.”

Jamie Kalven, a longtime Chicago housing activist, put it this way: “I hope there is not much predictive value in his history and in his involvement with that community.”

(The Boston Globe 6/27/08)

LAWNDALE IS NOT supposed to be Alan Keyes Country. According to a recent Tribune/WGN TV poll, Keyes is getting just 3 percent of Illinois’ African-American vote in his Senate race against Barack Obama. But last Friday afternoon a crowd milled around the mother-and-child statue at the corner of Kedzie and Douglas, waving Keyes placards and getting ready to board a charter bus with the candidate’s name on the side.

The bus was scheduled to take them to Lawndale Manor, the crumbling low-income housing project overseen by Cecil Butler, a contributor to Obama’s campaign. . . .

Keyes was invited to Lawndale by members of V.O.T.E. 4 Hip Holitics, an inner-city political action group founded by ex-cons who are fed up with the Democratic Party. (V.O.T.E. stands for Voice of the Ex-Offender.) For the last 40 years, they say, blacks have been voting almost unanimously for the Democrats, yet Lawndale is still a slum: the houses are collapsing, the streets are unsafe, and the young men are going to prison in greater numbers than ever.

. . .

Many of the Keyes supporters were incensed about Lawndale Restoration, which operates 1,200 units of federally subsidized housing, including Lawndale Manor. One of the buildings collapsed when a car backed into it last month. After that incident city inspectors swept through, declaring more than 100 of the units uninhabitable. Cecil Butler, the project’s general partner, was given a $51 million state-backed loan to refurbish low-income housing in Lawndale. Since 1997 he has taken in $84 million in rent, mostly through federal subsidies. Over the past four years the city has sued Butler and his various entities 50 times for not keeping Lawndale Restoration properties up to code. Butler has, however, given $4,000 to Obama’s campaigns over the past five years. Some of the crowd wondered if that puts Obama in Butler’s pocket. “It’s like being paid under the table,” said neighborhood resident Lawona Fitzpatrick, who held a Keyes sign.

(Chicago Reader 10/29/04)

The federal government is poised to foreclose on [Cecil] Butler’s patchwork of 1,200 apartments known as Lawndale Restoration.

This fall inspectors found more than 1,800 code violations in the broken-down buildings, from leaking roofs to sewage in the basements, dangling wires to rickety porches.

Now the wealthy landlord, Butler is the target of community outrage. A new generation of activists points to the tenements as evidence that Butler traded on [M.L.] King’s legacy for personal gain.

He has presided over a flow of more than $150 million in government funds through the apartments. Some of those millions have gone to companies Butler controls.

Money has flowed in other directions, as well. One group of Lawndale investors leveraged the apartments to buy Gold Coast condos. The ChevronTexaco oil company used the tenements as a tax shelter to write off profits. Lawyers, accountants and brokers profited from government refinancing deals. A suburban insurance dealer admitted bilking the apartments by inflating premiums.

“I know that lots of rich people benefit … which is basically the way the economy works,” said Butler, 66. “In order to trickle down a little drop of the benefit, in order to secure affordable housing, you have to see what will make people with their money come in here and make an investment.”

By his own assessment, Butler has been overwhelmed by the sheer complexities of trying to rebuild a neighborhood in ruins. He says he’s evolved from idealist to pragmatist, while achieving modest gains such as a new shopping center and senior citizen complexes. A fresh injection of government money, he contends, could also save Lawndale Restoration.

Hampered by the spiraling costs of repairs, utilities and insurance, Butler is almost three months behind on his government-backed mortgage. The U.S. Department of Housing and Urban Development has rebuffed his plea for a massive refinancing. Foreclosure would leave taxpayers on the hook for the $47 million balance of a 1995 loan.

The apartments are likely to be auctioned off. By Butler’s estimation, the sale would bring in less than $20 million–a tiny fraction of the tax dollars pumped into the project over the years.

Hope in short supply

From North Lawndale, the Sears Tower pokes up from the eastern horizon, a reminder that the Loop’s wealth is just 10 minutes away. Yet only a few pockets of new construction suggest any hope of revival in the neighborhood. A smattering of garbage-strewn lots and boarded buildings along Roosevelt Road are remnants of the destruction of 1968.

The worn graystones and courtyard apartment buildings of Lawndale Restoration stretch for blocks along Douglas Boulevard, Independence Boulevard and other streets. Single mothers shuttle kids from the apartments to school past open drug deals. They steer children clear of dark stairwells that, according to residents, are alcoves for prostitution.

“My kids never come out the front door without me,” said Tonia Harris, a resident of 3655 W. Flournoy St., where the entry features a bullet hole, a broken lock and a dismantled buzzer system.

On 18th and 19th Streets, where one Butler building partially collapsed in September, residents said complaints about rats, bad plumbing, crumbling walls and faulty wiring have long been ignored.

“We’re sitting on a death trap,” said Belinda Brickhouse, explaining how sparks recently flew out of the switch when her daughter Chessidy, 18, flipped on a kitchen light. Brickhouse is one of dozens of Lawndale Restoration tenants who have called for Butler’s ouster during tense meetings with local officials.

Near dusk on a November afternoon, Carol Matthews, 43, got ready to plug a flimsy extension cord into an outside outlet on her building at 705 S. Lawndale Ave. For the sixth night in a row, she had electricity in only one room of a unit she shares with her mother, daughter and granddaughter, she said. Repeated calls to the maintenance office didn’t fix the problem, she said.

“We just sit in the dark,” Matthews said. “All they do is take my name and say, `OK.’”

Such conditions are a long way from Butler’s out-of-the-ashes idealism of 1968.

. . .
Neighborhood frustration grew as Butler’s shopping center took 25 years to build and the community lost control of another source of economic power, Community Bank of Lawndale.

Butler and others organized the bank in the 1970s as a black-owned financial institution. It was sold last year to a company owned by Asian-Americans as regulators threatened to seize it because of bookkeeping problems and inadequate funds. Butler relinquished day-to-day control as the bank’s president 19 years ago, amid similar questions from regulators.

“They felt I didn’t need to be running the real estate company and the bank so I stepped down,” Butler said. His real estate company had gotten loans from the bank “to pay gas bills and other things” at his apartments.

“It has always been a struggle,” he said with a lawyer’s crisp pronunciation spiced with a soft drawl from his native Tennessee.

Others who shared Butler’s community vision are disappointed.

“We all had great hopes, but it just didn’t pan out,” said Willie Mae Bowling, a former board member of the Lawndale People’s Planning and Action Conference.

Seeing an opportunity

The bank and commercial properties were overshadowed by the massive task of housing 1,200 low-income families.

Butler became a landlord in 1974 when the federal government asked his community group to take over hundreds of apartments that had gone into default. Butler said he saw it as an opportunity to improve tenants’ quality of life and bolster prospects for his planned shopping center.

The buildings led Butler to master the complex financing rules of subsidized housing. He scored his first coup in 1979 when HUD backed a $22 million mortgage to rehab the apartments. Butler then recruited a network of more than a dozen investors who used the apartments to gain tax credits. For example, one partnership provided $485,000 in cash in exchange for nearly $2 million in tax write-offs.

Still Butler struggled to maintain the properties, where most rent revenues came in the form of federal Section 8 subsidies.

In 1995, Butler got another shot in the arm–a $51 million state bond sale that was the largest rehab deal in the history of the Illinois Housing Development Authority. Politicians and investment bankers proclaimed the deal would help preserve affordable housing in Lawndale for decades.

“I knew [the $51 million] was not enough money to do what was needed,” Butler said. “But I knew it was better than not getting anything at all.”

Only about one-third of the money actually went to building repairs, according to state records reviewed by the Tribune. Some $14.7 million went to cover attorneys, accountants, underwriters, reserves and other closing costs. The rest paid off previous debt on the buildings.

The state bond sale also fueled an investment by ChevronTexaco. The oil company received $27 million in government-authorized tax write-offs in exchange for $20.6 million in cash.

About $9.5 million of the cash the oil company invested went to a real estate company Butler owns “as a fee for its services and reimbursement of expenses,” according to state records. Butler and his accountant said he poured most of that money back into the apartments and senior housing developments in Lawndale.

An additional $5.9 million of the ChevronTexaco funds bought out previous tax shelter investors in the apartments.

Despite more than $10 million in annual federal rent payments, Lawndale Restoration showed a loss last year of $1.75 million before depreciation, according to financial statements.

But various people have made considerable sums from the buildings.

For example, a company called Tactical Security has been paid $2.75 million in the last four years to provide roving guards for the apartments. The company is owned by Tom Chandler, brother of Lawndale Ald. Michael Chandler (24th).

Another businessman, Inverness insurance broker Ralph Aulenta, got money for nothing. He admitted in a criminal trial earlier this year to bilking the Lawndale apartments out of $1.7 million by inflating insurance premiums for more than a decade. Butler is suing to retrieve the funds. Aulenta is serving a 20-month prison sentence for an unrelated insurance scam in Rosemont.

Butler-controlled corporations have also received between $300,000 and $650,000 in annual fees to manage the apartments in recent years, according to state records. And Butler, who lives downtown, gets a $50,000 annual salary from his Lawndale community group.

He has spent more than $100,000 on political contributions in recent years to candidates ranging from U.S. Sen.-elect Barack Obama to longtime congressmen Bobby Rush and Danny Davis, Mayor Richard M. Daley and former Republican Gov. George Ryan. He said he gives as much as $70,000 a year to charity.

Butler estimated his net worth at $3 million.

“As hard as I worked for 30 years, I can’t believe you’d say that’s wealthy,” he said. “The vast majority of money I’ve earned has been reinvested in projects in this community.”

. . .

Among those projects is a gated community called Albany Park Townhouses at Albany and Ogden Avenues, just a few blocks from the despair of Lawndale Restoration.

Chicago Public Schools Board President Michael Scott is Butler’s partner in the development, where condos fetch more than $300,000. Owners have front-window views of the drooping willows and winding paths of Douglas Park. In the rear, frosted block glass windows let in plenty of light but obscure the view of North Lawndale’s decay.

Butler said it is government bureaucrats who have turned their backs on the neighborhood. He said HUD officials have declined for 18 months his urgent requests for a refinancing. He said it would be a “tragedy” if each unit didn’t receive about $60,000 for a gut rehab.

. . .

HUD has assumed responsibility for Butler’s mortgage. The fate of the buildings is likely to remain uncertain for at least several months.

CORRECTION:

Additional material published Jan. 30, 2005:

CORRECTIONS AND CLARIFICATIONS.

The Nov. 21, 2004, article headlined “Poor live in housing nightmare while investors reap benefits” may have given the impression that Cecil C. Butler is sole owner of 1,200 apartments in Lawndale. In fact, the legal owner of the apartments is the Lawndale Restoration Limited Partnership. Butler is the president of the general partner responsible for the management of the partnership’s affairs. Butler has served as signatory for partnerships, management agreements and financings for the apartments dating to the 1970s.

The article incorrectly said that Butler departed as president of Community Bank of Lawndale in 1985 amid bookkeeping problems. Butler left to avoid conflict of interest questions from regulators after the bank issued loans to Lawndale Restoration Properties.

The article was imprecise when it stated that investors “leveraged” the Lawndale apartments to buy Gold Coast condominiums. No debt was incurred on the Lawndale apartments to complete the Gold Coast purchase. Investors exchanged tax benefits from the Lawndale apartments to the Gold Coast condos.

Also, a headline in the article incorrectly stated that $150 million in federal funds was meant to repair the apartments. In fact, the funds were mostly rent payments meant to cover mortgage payments, operating costs and routine maintenance. Other federally insured loan funds were used for repairs.

Cecil Butler said he was overwhelmed with trying to rebuild an area in ruins.

Carol Matthews says she and her family have gone without electricity in most of their apartment for six nights. Calls to the maintenance office didn’t help, she says.

Jacquera Harris, 3, daughter of West Side resident Tonia Harris, drinks from a bathroom sink that has become detached from the wall of their apartment. Upset over the condition of their units, dozens of tenants who live in buildings managed by Cecil Butler have called for his ouster.

Lawndale buildings in disrepair
In 1995, the Illinois Housing Development Authority sold a record $51 million in bonds to fix low-income apartments in the North Lawndale area. Less than one-third of the funds actually went to repair the buildings. Nine years later, the bond mortgage is in default, and 1,200 apartments that the money was meant to save are filled with hundreds of code violations.

CECIL BUTLER’S PROPERTIES

CODE VIOLATIONS
Building inspection records for 93 parcels managed by Cecil Butler show more than 1,800 code violations, including roach and rat infestation and electrical problems. The federal government likely will foreclose and sell the buildings at auction.

SNAPSHOT OF VIOLATIONS ON DOUGLAS BOULEVARD
Many of the Butler-managed buildings clustered along Douglas Boulevard had at least 20 code violations.

WHERE THE FUNDS CAME FROM
Bond proceeds: $51 million
Equity/down payment: $5 million

WHERE THE FUNDS WENT
Apartment rehabilitation: $16 million
Payoff of past debt: $25 million
Financing costs: $15 million*
*Includes closing costs, broker fees and reserves

3118 DOUGLAS BLVD.
In September, city inspectors found 44 code violations at this address, among the largest number of violations in all of Butler’s buildings. A sampling:
- Broken windows and torn or missing screens
- Broken hardware on front interior door
- Front hall ceilings and walls damaged
- Roach and rat infestation
- Rotted or missing tiles on floors
- Bad odor in vestibule and stairwell
Sources: Illinois Department of Housing and Development, City of Chicago, ESRI, GDT
Chicago Tribune / Haeyoun Park and Chris Soprych

(Chicago Tribune 11/21/04)

As a result, more than one thousand people lost their jobs, and Chicago lost hundreds of millions of dollars. Jarrett was far from apologetic. She claimed her department “moved heaven and earth to exceed [Spiegel's] expectations. We didn’t drop the ball. I will sleep well.”

Spiegel Inc. doesn’t know where it wants to relocate its South Side distribution center, but it knows it won’t be in Chicago.

And that decision, called “gut-wrenching and emotional” by the catalog/retailing company, will rob the city’s economy of up to $510 million annually and put 2,000 jobs in jeopardy.

. . .

The economic impact of Spiegel’s exodus would be at least $410 million and could hit as high as $510 million, said Sam Mitchell, president of the Chicagoland Chamber of Commerce.

. . .

Valerie Jarrett, the city’s commissioner of planning and development, said her staff “worked very hard” to put together a package that could keep Spiegel here. “Since our proposals met and even exceeded their criteria, we don’t understand why they are leaving the city.”

However, sources close to Daley say he was disappointed that the Planning Department’s efforts weren’t more aggressive. The city knew last week Spiegel was lost, they say.

It’s another black eye for Daley, who has been forced to abandon his plan for a Lake Calumet airport and has seen his dream of a casino complex become mired in controversy.

(Chicago Sun-Times 9/10/92)

Thirty feet of water kept Spiegel Inc. from replanting its roots in Chicago.

That’s the depth of water that would need to be filled with dirt if Spiegel relocated its Bridgeport distribution facilities to a site near Lake Calumet.

“If you go out there right now, where the building was to be situated, I’d hope you were a very good swimmer because you’d be in 20 to 30 feet of water,” Michael Moran, Spiegel vice president and general counsel, said Thursday.

And that was the best of six proposals the city of Chicago pitched to Spiegel in order to keep the distribution center and 2,000 jobs within Chicago.

But Spiegel declined the site, which came with a lucrative package of incentives. The Downers Grove-based company Wednesday announced it would relocate its distribution hub to one of four communities – Plainfield, Downstate Champaign and Decatur, or Columbus, Ohio.

When Spiegel began studying its existing facilities on 35th and 39th streets, it told the city what it would need in a new site and asked for suggestions. Five parcels were offered, none of which met the company’s criteria.

Either the sites didn’t have the 150 to 200 acres of land Spiegel required, or the land was poorly configured, Moran said. “We felt they’d come up short. We asked the city to come back again,” Moran said.

The city then submitted a site adjacent to land Mayor Daley originally sought to use for a third regional airport. The proposal was the city’s strongest offer, and involved the city improving the land, and hauling in tons of landfill, before Spiegel started construction.

Ultimately, Spiegel decided it couldn’t pin its future on promises of speedy work made by the city that Spiegel found hard to believe. Spiegel wants to break ground on a new distribution center in November and relocate its South Side operation there in 1994.

Thursday, the city said the Lake Calumet property was always on the table and the final proposal for that land surpassed all of Spiegel’s requirements. Furthermore, the city had every confidence it could meet the timetable, said Valerie Jarrett, the city’s commissioner on planning and development.

“We moved heaven and earth to exceed their expectations,” Jarrett said. “We didn’t drop the ball. I will sleep well.”

(Chicago Sun-Times 9/11/92)

In an editorial, the Chicago Sun-Times criticized her comments and the offer of “swampland” to Spiegel.

How can Mayor Daley’s commissioner of planning and development say she’s sleeping well at night when the best relocation option Chicago offered to keep Spiegel here was filled with up to 30 feet of water?

The retailer said last week it will be moving from Chicago, after calling Bridgeport home for 125 years. It was a “gut-wrenching and emotional” decision, the company said.

Unfortunately, some 2,000 current employees will suffer the consequences of a move Spiegel now has narrowed down to Plainfield, Champaign, Decatur or Columbus, Ohio.

Planning Commissioner Valerie Jarrett, meanwhile, claims her department “moved heaven and earth to exceed (Spiegel’s) expectations. We didn’t drop the ball. I will sleep well.”

Moving heaven and earth amounted to offering the retailer six possible sites for its new distribution facility. The best of those, Spiegel said, was near Lake Calumet.

“If you go out there right now, where the building was to be situated, I’d hope you were a very good swimmer because you’d be in 20 to 30 feet of water,” said Michael Moran, Spiegel vice president and general counsel.

While a sure thing – existing city jobs – slips away, Daley gambles the city’s economic future on his mega-projects, first the Lake Calumet airport and now the casino complex.

He maintains manufacturing is “gone” from the city despite an Economic Development Commission report last year that indicated the city could retain or create 150,000 jobs if it could somehow accommodate the pent-up demand for more space by the industrial firms already located here.

Offering them swampland is no way to achieve that goal.

(Chicago Sun-Times 9/17/92)

Jarrett Failed; Black Workers Suffered

BOB EDWARDS, Host: This is Morning Edition. I’m Bob Edwards. For 88 years, all of the goods ordered through Spiegel Catalog have been shipped from a warehouse complex on the south side of Chicago. Spiegel’s decision to move the warehouse operation to Ohio means 2,000 people will lose their jobs. Many of them have worked for Spiegel for decades. NPR’s Edward Lifson reports.

EDWARD LIFSON, Reporter: All the way down from 35th to 39th Street, amid the heavy manufacturing soot that made Chicago grow, Spiegel’s name is cast in concrete on these 10- and 12-story brown brick, industrial, Victorian warehouses. These are the buildings known from TV game shows of the fifties, sixties and seventies, as in `Contestants on this program receive a certificate from the Spiegel Catalog, Chicago 60609.’ Each year, the company ships over a billion dollars worth of clothing, home furnishings and electronics from here.

The workers are nearly all African-American, from the impoverished south and west sides. Fifty-year-old Jonathan Edmunds [sp] waits for his car pool after work. He’s been a master receiver at Spiegel for 17 years. He makes $13 an hour. Though he’s going to lose his job soon, Edmunds says this Christmas was no worse or better than any of the others at Spiegel.

JONATHAN EDMUNDS, Master Receiver, Spiegel: No, but they gave away turkeys [laughs]. First year since I’ve been here, you know. It never happened before. I mean, give ‘em a turkey, they’d be happy.

LIFSON: Perhaps because the workers have known for two years that the site was going to close, or perhaps because the reality won’t set in until the last paycheck comes early next year, employees here just seem resigned.

Greg Harris [sp] is in his thirties, has six kids and is a Spiegel merchandise handler.

GREG HARRIS, Merchandise Handler, Spiegel: I hope they stay, but they not, so I got to start all over. It’s life. I was on public aid when I got this job – Project Chance. And they was telling me that I had to work for my check and my food stamps, and then they told be about Spiegel, so I came down here, you know, and I tried it. And I got hired. And I’ve been here ever since – four years.

LIFSON: As a company, Spiegel is doing well. Net earnings were nearly $50 million last year. Profits have grown steadily since the German mail order giant Otto Versand [sp] bought Spiegel in 1982. At the elegant new headquarters the company built in a far west suburb of Chicago, one county removed from the city, corporate spokeswoman Debbie Coopman [sp] displays a photo of the new Spiegel warehouse in Groveport, Ohio.

. . .

Vim Veeveld [sp] researches urban economic development at the University of Illinois at Chicago. He says that the Spiegel workers will probably end up taking two or three short-term low-paying jobs before they even begin to approach earning what they’re making now. From his office on the 27th floor of University Hall, Veeveld surveys the untamable chaos of the city.

(NPR Morning Edition 12/26/94)

Over a Thousand Chicago Jobs Lost

In the summer of 1992, the catalog clothing company Spiegel rejected the City of Chicago’s final offer of incentives to keep the national warehousing and distribution center in Chicago and decided to leave for Columbus, Ohio, taking more than one thousand jobs with it. Public criticism was swift and strong – why did the city not offer more? Was its package too little, too late?

(Government Finance Review 10/1/95)

“In 1987, U.S. District Judge Marvin Aspen had appointed Habitat to oversee construction of all public housing in Chicago as part of the historic Gautreaux case, which found that the CHA had failed for decades to integrate housing.  At first, Habitat’s job was to desegregate housing by building “scattered site” units in more affluent white neighborhoods across the city. But the effort had little impact. The company built about 1,800 units, mostly in lower-income Hispanic neighborhoods before the program ended.”

They were eventually able to convince Judge Aspen to allow development where “CHA and Habitat could show that the neighborhood would become ‘revitalized’ through large public and private investments that would lead to racial integration.” This came as a result of CHA’s and Habitat’s desire to tear down the Henry Horner Homes, across the street from the United Center, where the 1996 Democratic Convention was to be held.  It led to the implementation of the “Plan for Transformation” that would replace existing public housing with developments that included public housing, affordable housing and market housing.  This began in 2000.  As of July of last year “under the Plan for Transformation, the city ha[d] lost more than 13,000 housing units for the poor at a time when low-income families face one of the worse housing crises in recent history.

After years of neglect and abandonment, many residents doubt that Jarrett and CHA officials have their interests at heart. ‘They was going to do what they was going to do,’ said Carmen Hart, who moved to Stateway Gardens [public housing] in 1960 and has been waiting three years to go back.” Only about one in three residents was able to return to redeveloped projects.

Meanwhile, “Habitat has earned $6.8 million in fees and $10.8 million in administrative expenses since the plan started in 2000, according to the U.S. Department of Housing and Urban Development. The company also earns millions as a property manager for the CHA,” while Jarrett has lived very comfortably at her lakefront apartment, while pulling in a six-figure base salary plus hundreds of thousands of dollars in compensation for serving on boards.

Jarrett Allowed Grove Parc to Become Uninhabitable

One of the most glaring of the examples of neglect was Grove Parc Plaza.  It was managed by the Habitat Company and is located in the district that Obama represented for 8 years in the Illinois legislature.  “About 99 of the units are vacant, many rendered uninhabitable by unfixed problems, such as collapsed roofs and fire damage. Mice scamper through the halls. Battered mailboxes hang open. Sewage backs up into kitchen sinks.”  Residents have been complaining for years to little avail.  “As late as 2003, a routine federal inspection still gave conditions at Grove Parc a score of 82 on a 100-point scale.”  By 2005 that had dropped to 56.  Finally in 2006 Grove Parc received 11 out of 100.  Jarrett’s only comment about this gross mismanagement under her leadership was about how hard it is to manage something you don’t own.

The squat brick buildings of Grove Parc Plaza, in a dense neighborhood that Barack Obama represented for eight years as a state senator, hold 504 apartments subsidized by the federal government for people who can’t afford to live anywhere else.

But it’s not safe to live here.

About 99 of the units are vacant, many rendered uninhabitable by unfixed problems, such as collapsed roofs and fire damage. Mice scamper through the halls. Battered mailboxes hang open. Sewage backs up into kitchen sinks. In 2006, federal inspectors graded the condition of the complex an 11 on a 100-point scale – a score so bad the buildings now face demolition.

Grove Parc has become a symbol for some in Chicago of the broader failures of giving public subsidies to private companies to build and manage affordable housing – an approach strongly backed by Obama as the best replacement for public housing.

. . .

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.

Some of the residents of Grove Parc say they are angry that Obama did not notice their plight. The development straddles the boundary of Obama’s state Senate district. Many of the tenants have been his constituents for more than a decade.

“No one should have to live like this, and no one did anything about it,” said Cynthia Ashley, who has lived at Grove Parc since 1994.

. . .

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.

- Antoin “Tony” Rezko, perhaps the most important fund-raiser for Obama’s early political campaigns and a friend who helped the Obamas buy a home in 2005. Rezko’s company used subsidies to rehabilitate more than 1,000 apartments, mostly in and around Obama’s district, then refused to manage the units, leaving the buildings to decay to the point where many no longer were habitable.

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.

. . .

Jarrett, a powerful figure in the Chicago development community, agreed to be interviewed but declined to answer questions about Grove Parc, citing what she called a continuing duty to Habitat’s former business partners. She did, however, defend Obama’s position that public-private partnerships are superior to public housing.

“Government is just not as good at owning and managing as the private sector because the incentives are not there,” said Jarrett, whose company manages more than 23,000 apartments. “I would argue that someone living in a poor neighborhood that isn’t 100 percent public housing is by definition better off.”

. . .

One of the earliest public-private partnerships of the type supported by Daley and Obama took place in the Woodlawn neighborhood, a checkerboard of battered apartment buildings and vacant lots just south of the University of Chicago.

Grove Parc Plaza opened there in 1990 as a redevelopment of an older housing complex. The buildings had a new owner and a major renovation funded by the federal government. Even the name Grove Parc Plaza was new.

The owner, a local nonprofit company called Woodlawn Preservation and Investment Corp., was led by two of the neighborhood’s most powerful ministers, Arthur Brazier and Leon Finney. Obama had relationships with both men. In 1999, he donated $500 of his campaign funds to another of their community groups, The Woodlawn Organization.

Woodlawn Preservation hired a private management firm, William Moorehead and Associates, to oversee the complex. In 2001, the company lost that contract and a contract to manage several public housing projects for allegedly failing to do its job. The company’s head, William Moorehead, was subsequently convicted of embezzling almost $1 million in management fees.

Woodlawn Preservation hired a new property manager, Habitat Co. At the time, the company was headed by its founder, Daniel Levin, also a major contributor to Obama’s campaigns. Valerie Jarrett was executive vice president.

Residents say the complex deteriorated under Moorehead’s management and continued to decline after Habitat took over. A maintenance worker at the complex says money often wasn’t even available for steel wool to plug rat holes. But as late as 2003, a routine federal inspection still gave conditions at Grove Parc a score of 82 on a 100-point scale.

When inspectors returned in 2005, they found conditions were significantly worse. Inspectors gave the complex a score of 56 and warned that improvements were necessary. They returned the following year and found things had reached a new low. Grove Parc got a score of 11 and a final warning. Three months later, inspectors found there had been insufficient improvements and moved to seize the complex from Woodlawn Preservation.

After negotiations with tenants, the government agreed to allow a new company, Preservation of Affordable Housing, a Boston-based firm, to replace Habitat as the manager of Grove Parc. The company is negotiating to buy the development, which would then be demolished and replaced with new housing.

Officials at Woodlawn Preservation say the government didn’t give them enough money to properly maintain Grove Parc. Habitat’s Jarrett declined to comment on Grove Parc in particular but said it is hard to manage something you don’t own.

But other Chicago developers and housing activists say federal subsidies can be adequate if managed properly. They say Grove Parc stands apart for how badly it fell into disrepair.

Preservation of Affordable Housing has assumed responsibility for numerous subsidized complexes across the country.

“Grove Parc is quite an exception to what we’ve normally done because it’s in such bad shape,” said the nonprofit’s chief executive, Amy Anthony. “These complexes are often tired, they’re always denser than today’s philosophy, but they’re not usually anywhere near as deteriorated.”

(The Boston Globe 6/27/08)