Chicago Jobs with Justice

Chicago Mayor Richard Daley, who announced plans to retire from his post yesterday, is more unpopular than ever thanks in part to a rushed and shortsighted lease of a key city asset: its parking meter system. With the November elections right around the corner, Gov. Pat Quinn and members of the General Assembly should be careful not to fall into a similar trap.

Next Wednesday, the governor will select the winner of a bidding competition to oversee Illinois' lottery system. This process began last year when the state legislature passed a measure into law allowing the Department of Revenue to conduct the lottery through a management agreement with a private company. While the U.S. Department of Justice has ruled that a state must control all significant business decisions made by a lottery enterprise, Illinois will soon become the first state to outsource fully its lottery management and marketing responsibilities. (It will retain ownership and regulatory oversight.)

There's a broad consensus around Springfield that the Illinois Lottery has the capacity to deliver greater revenue than it currently does. Illinois generates about $2 billion annually thanks to its gaming program. Roughly $650 million of that money eventually flows into the state's education honey pot, equaling almost 10 percent of the state's total contribution to schools. Yet lottery sales have remained flat in recent years, Illinois trails other comparable states in lottery sales per capita, and the system's machinery and customer outreach are outdated. It's an asset that's not being utilized wisely, especially at a time when the state's education budget is under constant duress.

Lots of gaming experts have spent time trying to figure out how to add new players to the mix in the 21st century. Bringing the lottery online and to wireless users is one strategy with plenty of support. (Internet lottery sales are still technically illegal, although some observers expect that to change in the near future.) Tapping into the growth of social media will undoubtedly play a role in any new marketing push, as well. Supporters of the privatization measure say that a comprehensive and forward-thinking business plan could boost profits by $150 million per year.

The General Assembly has concluded that a private company is needed to make those necessary changes. The idea is that a corporate manager will be better positioned to take entrepreneurial risks with state money than bureaucrats. "A private manager," Illinois Lottery Acting Superintendent Jodie Winnett told the Public Gaming Research Institute, "will be expected to bring something to the table in this area of prudent and shrewd risk assessment."

Of course, that risk sharing isn't free. The state will likely pay the management company a sizeable fee for its services along with an additional percentage of any increased lottery profits. Already, the state has shelled out $4 million to the Oliver Wyman Group of New York to help select the private manager. If the state could devise its own lottery reorganization plan in-house, none of those payments would be needed. "The purpose of the lottery is to provide funding for the citizens of Illinois," wrote State Rep. Jack Franks (D-Marengo), "not a corporation handpicked by the Governor."

Speaking of the governor, representatives from his office attended a public hearing in Chicago this morning and listened to the bids submitted by two finalists: Northstar Lottery Group, a joint venture between GTECH Corp., Energy/BBDO, and Scientific Games Inc., and Camelot Illinois. Coalition members from the first bidder have been in business with the state for over two decades, supplying Illinois with lottery equipment, instant tickets, and advertising work.

That relationship is leading good government critics to question the validity of the selection process altogether, which they say has been rushed and shrouded in secrecy. Members of the committee reviewing the bids have remained anonymous, for example. The state hasn't even released information about how many bids were ultimately submitted. And one company whose bid was rejected is protesting the decision, claiming they were given no justification for why its entry was tossed aside. "Does [Gov. Quinn] not understand what appearance of impropriety means?" wrote the Daily Herald editorial board yesterday. "Does he not understand that voters in this state want more transparency than is required?"

If Northstar is eventually awarded the lottery contract, Gov. Quinn and his staff need to be wary about the terms of the inevitably complex deal. When Mayor Daley leased his meters, he relied heavily on investment firm William Blair and Co. to write up the contract. Not surprisingly, Blair officials gave themselves and the other representatives from the companies now controlling the city's 36,000 meters a wonderful deal. Chicagoans lost close to $1 billion in future revenue and control over a useful transit development tool as a result. Daley lost support across the city.

Camelot, for what it's worth, released some details about its bid to the public before the meeting this morning. The company says it would limit the games' reliance on low-income residents and award 20 percent of contracts to firms owned by women, minorities, and the disabled. Yesterday, Camelot also mentioned that it plans to set up a foundation and allocate 10 percent of its profits (up to $35 million over 10 years) to Illinois educational programs and organizations. The Chicago Urban League, Illinois Hispanic Chamber of Commerce, and the Women's Business Development Center have all endorsed the bid. Northstar delivered a similar procurement diversity promise this morning and said it would donate 5 percent of its profits to local non-profit organizations.

The governor must decide which company to use by September 15. With the election just weeks away, it's almost certain his choice will face heavy scrutiny.

Among the flood of politicians mulling a run for mayor of Chicago are U.S. Reps. Danny Davis and Luis Gutierrez. Both are members of the Congressional Progressive Caucus and both are making noise about the next mayor's policy positions. 

This morning, Davis said he thinks there will be a mayoral candidate running on an identifiably progressive platform. But that candidate, whether it's him or not, is going to need a big push from organized supporters. "Whichever candidate it is will not be standing alone, and I don't think candidates emerge alone," Davis told Progress Illinois. "It will be somebody that some groups and people embrace, saying, 'This is our candidate. This our platform.'" The first job for the next mayor, according to Davis, is reconciling the need for services with the city's tremendous fiscal challenges.

Gutierrez, meanwhile, released this statement about his intentions: "Chicago deserves progressive and innovative leadership and a Mayor who is not afraid to make changes and to fight for working families. In the coming days, I will talk with my family and meet with my supporters and make a decision about my future plans."

For now, candidates and potential backers are merely attempting to understand the new political landscape in the city; the specific platforms are yet to come. "There are all kinds of people and all kinds of groups trying to determine what to do and who they are going to support," Davis said. This should start to shake out almost immediately, as the last date to turn in 12,500 signatures from Chicago voters is November 22.

The Chicago City Council today passed a $1 billion bond measure to continue the expansion of O'Hare while the city negotiates with several airlines, who they hope will throw in money for a new terminal.

David Axelrod, senior advisor to President Obama, told Joe Scarborough on MSNBC that White House Chief of Staff Rahm Emanuel "will think it over," in reference to a running for mayor of Chicago. Emanuel is one of many names that have started surfacing as potential candidates following Mayor Daley's retirement announcement yesterday.

UPDATE (2:00 p.m.): Mayor Daley said he won’t endorse anyone in the race to succeed him.

Democratic U.S. Senate nominee Alexi Giannoulias said Tuesday at a meeting with veterans and injured Iraq War vet Tammy Duckworth that the United States should leave Afghanistan "as quickly as possible." Giannoulias added that he would not support a timeline for troop withdrawal.

Mayor Richard Daley isn't the only Illinois official who recently announced his resignation. Last Thursday, Illinois Department of Corrections director Michael Randle said he will step down from his post at the end of the month to pursue a new opportunity in Ohio. While the news was buried before Labor Day and overshadowed this week by the Daley bombshell, it will still have some significance politically this fall. Randle carried the blame for the MGT Push early release controversy, a program for which Gov. Pat Quinn is still receiving heavy criticism.

On the policy side, criminal justice reformers in and out of government are apoplectic over the departure of Randle, who made a big splash early in his tenure by outlining a well-regarded 10-point reform plan for the infamous Tamms Correctional Center. Like the Sun-Times editorial board, they were giddy over the direction in which he was taking the department, calling him in an open letter to Gov. Quinn "the first true reformer the IDOC has had in a generation." "My sources inside DOC say Randle ran the agency in a professional, critical, and progressive way,"  added Northwestern University professor Stephen F. Eisenman. Eisenman and his colleagues are hopeful that Gladyse Taylor, who is taking over for Randle, will not abandon his Tamms' efforts or challenge a meaningful court ruling about the due process rights of Tamms' prisoners that was handed down in July. If she doesn't uphold Randle's commitments, you can bet those advocates will make their concerns known.

When a bank forecloses on a home, the impact is felt by more than the borrower.

Foreclosures radiate outward. Lawns don't get mowed, maintenance is deferred, and empty homes with boarded-up windows are prime targets for vandalism. Property values decline -- each home within 250 feet of a foreclosure loses 1 percent of its value due to the dispossess, according to one study, and the worth of the seized home itself sinks by 27 percent. When a few foreclosures cluster on a single block, entire neighborhoods swing into reverse. Gloria Warner, a member of the community group Action Now, described at a press conference yesterday how foreclosures are socking her community in West Englewood:

Foreclosures have hit Warner's West Englewood neighborhood hard; 243 of them were filed there in the first half of this year, according to the Woodstock Institute. The Neighborhood Stabilization Program (NSP), a federally-funded effort, was designed to help tackle the dramatic rise in foreclosures in distressed neighborhoods here and across the country. NSP granted funds to cities -- Chicago got two grants worth $55 million and $98 million -- to purchase foreclosed homes and hire developers to remake them for sale or rent.

But NSP hasn't been able to reach all of the neighborhoods it identified for assistance in Chicago, including West Englewood. Zero properties in the neighborhood had been acquired under NSP, as of July 30, for rehabilitation.

That number comes courtesy of "A Drop in the Bucket: An Analysis of Resources to Address Home Foreclosure in Chicago," (PDF) a new report the Sweet Home Chicago Coalition released Tuesday. The report argues that NSP's resources aren't commensurate with the scale of foreclosures in Chicago. Julie Dworkin, policy director for the Chicago Coalition for the Homeless, made the case at a press conference Tuesday: 

The Sweet Home Chicago Coalition will use such findings to argue for the affordable housing ordinance it has been pushing for in City Council. The group plans to connect the Sweet Home legislation -- which would require the City of Chicago to designate 20 percent of the tax increment financing dollars generated annually in the city's 159 TIF districts for affordable housing projects in those districts -- to the foreclosure crisis.

"A Drop in the Bucket," as Dworkin notes above, finds that NSP has purchased and rehabbed just 83 properties in its designated communities, 1 percent of the total number of foreclosures completed in the entirety of the city last year. The maximum number of foreclosed properties within any given NSP community is 11. Ald. Walter Burnett (27th Ward), the Sweet Home bill's lead sponsor, said only three buildings in his ward have been designated for acquisition under NSP -- and none have been redeveloped yet. With unused TIF money sitting in city coffers, "Why do we have to wait on the federal government?" Burnett asked at Tuesday's press conference.

The report points out that 32 percent of all foreclosures in NSP's targeted communities last year were located within TIF districts, 1,497 homes in all. The Sweet Home bill would send TIF dollars to purchase and rehab exactly those kinds of properties. And "A Drop in the Bucket" points out that foreclosures are hitting neighborhoods that aren't eligible for NSP dollars but do have millions in TIF dollars at their disposal as well. (The lack of federal help for neighborhoods hit by foreclosures is an issue the Tribune examined this summer.) The upper-income Near South Side, for example, has seen hundreds of foreclosure filings that fell within the area's TIF, which contained more than $149 million as of the end of last year.

At a press conference on Tuesday, members of the Sweet Home coalition demanded Ald. Ray Suarez (31st Ward), chair of the city council's housing committee, and Ald. Ed Burke (14th Ward), the powerful head of the finance committee, convene another hearing on the legislation and called on the Daley Administration to lend its support to the bill. The proposed ordinance is stalled right now, despite the fact that a majority of the city council has signed on as co-sponsors.

The Sweet Home bill's future is murky, however, given Daley's surprise announcement yesterday that he won't seek another term, uncertainty about how TIF dollars may be used in the next city budget, and the possibility that the funds could be sent back to various taxing bodies in Cook County. But Burnett and Dworkin both indicated they are open to compromise on the final contours of the legislation. "A Drop in the Bucket" should help them make their case.

Alexi Giannoulias, the Democratic nominee for Illinois' U.S. Senate seat, released his latest ad for the fall campaign today. "The Choice - Ethics," as the ad is titled, is simple and to the point, featuring President Barack Obama extolling Giannoulias' commitment to ethical government. The video is below:

Obama has taken a hit in recent national polling numbers. But the president has been able to hang on to majority support among voters in Illinois, with 51 percent approving of his job performance according to a recent Tribune poll. The ad clearly seeks to remind voters that supporting Giannoulias means supporting Obama, Illinois' home state president. 

Throughout her first term in office, State Sen. Toi Hutchinson (D-Olympia Fields) has been candid about the need for a sustainable budget solution in Springfield. That's a trait that isn't too common in the state capitol. This fall, she's facing a tough campaign against Adam Baumgartner, the director of the Peotone Chamber of Commerce. Below is her first television ad, which is titled "A New Voice."