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An Epic Blunder

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An Epic Blunder

The Obama Presidential Center, if completed, will prove disastrous for Chicago’s South Side. September 13, 2022
Politics and law

Even before he left office in January 2017, President Barack Obama had laid grand plans to build a presidential library on the South Side of Chicago. As early as 2015, the Chicago City Council (and Mayor Rahm Emanuel, Obama’s former chief of staff from 2009 to 2010) announced that “the City defers to the sound judgment of the President and his Foundation as to the ultimate location of the Presidential Library.” Obama ultimately decided to build on 19.3 choice acres in historic Jackson Park, designed in 1871 by great American landscape architect Frederick Law Olmsted. By that time, Obama’s “library” designation had been ditched because federal law imposes strict limitations on the size of presidential libraries. Freed of thosose restrictionss, the Obama Foundation unveiled a new plan with a 235-foot tower, joined by three other buildings. The Foundation claims that its new complex, the Obama Presidential Center (OPC), will generate huge economic returns to the city. But don’t bet on it. The Jackson Park site is landlocked, and the nearby land is fully occupied. If the larger Kenneth C. Griffin Museum of Science and Industry didn’t transform the South Side, neither will the OPC.

Without economic growth, the planned site is destined to cause maximum disruption, expense, and degradation to Jackson Park and its immediate environs. The project will require cutting down perhaps up to 1,000 old-growth trees; Cornell Drive, a six-lane north/south artery, will become a bike path. To expand the already-overtaxed DuSable Lake Shore Drive (U.S. 41) to the east and Stony Island Avenue to the west to offset, but not neutralize, the looming traffic crunch will require major roadwork, costing $172 million in 2018 dollars. A high water table guarantees that dewatering the Center’s deep foundations will be a constant source of trouble, made worse by the OPC’s location near the West Lagoon, which exposes the site to the vagaries of Lake Michigan weather.

Before the work commenced, public estimates put the OPC’s cost at an estimated $350 million in 2018. That figure crept near $500 million by 2020 and $700 million by June 2021, shortly before the city transferred the construction site to the Obama Foundation. Since then, the foundation has not released any new cost estimates, nor has it updated its time of completion. But its 2020 Annual Report estimated that it needed close to $1 billion in new funds to finish construction and cover the costs of maintenance, operation, and improvement of the structure. With little money in the bank, the foundation saw total fundraising shrink from $171 million in 2020 to $159 million in 2021, well below the 2017 high of $232 million. The OPC could end up underwater both physically and financially, which is why the 2021 Annual Report does not mention these touchy funding issues.

Sadly, none of these dire consequences were necessary. The Obamas wanted to build the OPC on the South Side, where multiple sites exist from which the foundation could freely choose. To show how this choice might be made, a local organization, Protect Our Parks (POP), has championed a detailed site plan for one such South Side site, on a dozen acres just west of Washington Park with multiple advantages: the location has access to multiple train and bus lines and the Dan Ryan Expressway, the principal South Side interstate artery. The land is private, so little permitting would have been necessary, and mercifully few trees would have needed to fall. The eminent architect Grahm Balkany has developed a site plan that won the American Institute of Architects’ Illinois Honor Award for Master Planning. Yet the Obamas have never once during subsequent litigation examined this or any other South Side site.

Against this backdrop, POP and several individual citizens—Obama supporters all—started suing in 2018 to stop the takeover of Jackson Park. At every point, the plaintiffs supported construction of the OPC on Chicago’s South Side. Their sole objective was, and is, to block construction of the OPC in Jackson Park by having an appropriate legal review of nearby alternatives. Michael Rachlis and I became lawyers for the plaintiffs a year later, optimistic about our case. In addition, we had three major legal objections—on environmental, public trust, and financial grounds—that should have stopped the OPC construction cold. But flawed rulings have blocked all objections.

The environmental issues stem from the Obama Foundation’s need to meet the strict legal demands of both the National Environmental Policy Act of 1970 (NEPA) and the Transportation Act of 1966 (TA). These statutes introduced a tough regulatory regime for starting new projects or modifying old ones and have been cited repeatedly to block or slow down the construction or modification of major facilities like airports, tunnels, roads, and other projects critical to the nation’s infrastructure. Surely, both government agencies and courts ought to look unfavorably on a massive project that could easily be relocated elsewhere on Chicago’s South Side.

Hence, we sought a preliminary injunction to stop construction until resolution of these urgent legal issues. The statutory framework allows for new construction only if there were “no prudent and feasible alternative” to the proposed site. The law also demands “all possible planning” to minimize the environmental and historic harms. The alternative site near Washington Park presents not just a prudent and feasible alternative but a vastly superior one, without incurring the massive destruction of trees and the disruption of migratory bird routes along Lake Michigan. We thus thought our case offered the key one-two punch needed to secure the preliminary injunction. We were likely to prevail on the merits, because allowing the project to go forward now would cause irreparable environmental and historical damage.

Not so, it turned out. Both the Department of Transportation and the federal courts performed mental gymnastics to rescue the OPC project. Thus, a joint state-federal report filed in 2020 noted that “the undertaking comprises the construction of the OPC in Jackson Park,” coupled with road closures and other adjustments. But from the outset, the federal and state administrators split this project into two parts. Part one was building the OPC and turning Cornell Drive into a bike path. Part two was the extensive road work on DuSable Lake Shore Drive and Stony Island Avenue. The drafters of both the NEPA and TA knew that future developers would try to sneak under the regulatory radar by insidiously “segmenting” one big project into two. Indeed, a canonical, 50-year-old Supreme Court precedent requires lower courts to use a “thorough, probing, in-depth review” to ensure that an agency gave a “hard look” to alternative sites.

But the segmentation ploy gutted that review by letting the federal government ignore the construction of the OPC, which meant that it never once looked at the nearby Washington Park site. The agencies then completed their dismantling of the statutory scheme by trivializing the claim that cutting down about 1,000 trees would do irreparable harm. The appellate court reasoned that there were plenty of other trees in Jackson Park; and in time, small saplings, between two and four inches in diameter, were supposed to create a one-for-one substitute for each mature tree chopped down. The environmental laws were effectively neutralized.

Next, we hoped to stop construction by invoking the venerable public-trust doctrine applicable to these parklands. Like private trustees, the city commissioners must discharge their duties of loyalty and good management. Giving away a 99-year exclusive “use” agreement (a fancy new label for an ordinary lease), which would transfer 19.3 acres of prime parkland worth about $200 million for $10 in cash, counts as an indefensible raiding of public assets for private gain. A 1970 Illinois case, Paepcke v. The Public Building Commission of Chicago, explicitly held that ordinary citizens could sue to block an illicit transfer of property that by grant was to be “held, managed and controlled . . . as a public park, for the recreation, health and benefit of the public, and free to all persons forever.” Paepcke allowed the City of Chicago to make a four-acre intragovernmental transfer of land from Washington Park to a Chicago school district because it in no way compromised the overall integrity of the park. But in our case, District Judge John R. Blakey astonishingly stretched the narrow grant exception in Paepcke to allow the massive OPC project to bleed Chicago dry.

The third issue with the OPC concerns the actual financing of the transaction. Chicago may have been prepared to offer in-kind subsidies in the form of donated land and extensive roadwork that could easily total $500 million. But the Master Agreement that the city and foundation signed in May 2019 takes a different view of the actual transfer: the foundation had to bear all the financial risks from the construction process. Toward that end, the agreement contained two strict conditions that had to be satisfied before the deal could close. The first was that the foundation had to “receive” sufficient funds to cover the cost of construction, both at the initial certification in March 2021 and then again just before closing in August 2021. At the first date, the Foundation claimed to have raised (unaudited) $485 million toward the cost of a $482 million building. But both the city and the foundation together took the bizarre position that the foundation did not have to dedicate that money to building the OPC; it could instead spend it however it pleased, thereby undercutting any protection to the city. Thereafter, both the city and the foundation had to duplicate that auditing exercise just before closing, when construction costs had jumped to $700 million and new revenues were slumping. That second audit never took place.

Next, in its 2020 Annual Report, the Obama Foundation noted that it had to create an endowment of some $470 million to fund the “opening,” “start-up,” and “programming and operations” of the OPC. The foundation claimed that setting up a new fund, to which it contributed $1 million in June 2021, satisfied that condition because there was still “ample” time to raise the money. But a promise to raise money has never qualified as an endowment. We wrote the city and the foundation two letters explaining why the deal could not close. When they rebuffed these letters, we amended the complaint, asking that the District Court undo the transaction, suing on behalf of the same citizen on whom we had relied in the public-trust claim.

On January 6, 2022, one day after all papers were filed, Judge Blakey issued his final judgment against us, claiming, falsely, that we sued under the contract, whose explicit terms banned any such third-party action. He ruled that we had no standing to sue and that the books therefore had to remain closed. Seven months later, the case languishes. Federal procedural rules allow appeals as of right only if the entire case has been decided, which is not the situation here because the environmental claims have not been fully resolved. Judge Blakey exercised his discretion under the federal rules to prevent a prompt appeal of this separate financial piece. The case could now take years to wind itself through the federal system.

The plaintiffs are determined to pursue all these issues on the appeal, where they are confident in the soundness of their arguments. They still expect to prevail once these procedural knots are untied. In the interim, construction continues, notwithstanding all the environmental, historical, and financial risks. Yet once the OPC project is found to outstrip its legal authority, long-standing authority holds that construction must be stopped, the previous construction undone, reparation of the site undertaken, and money damages paid for the harm that remains. Hence this litigation remains fully timely.

While the trees are still standing, what is needed is more public and media scrutiny of the relevant documents in the public record. Requests under the Freedom of Information Act are also appropriate. Federal, state, and local officials can scrutinize these transactions more closely. But no one thinks that Transportation secretary Pete Buttigieg, Chicago mayor Lori Lightfoot, Illinois governor J.B. Pritzker, or Illinois attorney general Kwame Raoul are up to the challenge. Action must be taken now to overcome the legendary “Chicago Way.”

Photo: A rendering of the proposed Obama Presidential Center, scheduled to be built in Jackson Park, on Chicago’s South Side (Scott Olson/Getty Images)

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