When the Obama Foundation won approval to build the Obama Presidential Center on 19.3 acres of Chicago’s Jackson Park, it promised a $470 million reserve fund to protect taxpayers if the project failed.
But new tax filings show the foundation has deposited just $1 million into that endowment and has not made additional contributions in years, prompting critics to warn the shortfall could leave Chicagoans liable for hundreds of millions of dollars.
The endowment was a condition of the city agreement that transferred control of the parkland to the foundation as construction of the center proceeded. City officials and foundation representatives did not immediately respond to requests for comment, Fox News reported.
“The foundation ultimately secured the public land for just $10 in 2018 under a 99-year deal,” said the outlet.
When former President Barack Obama and former First Lady Michelle Obama turned the first sod at the site in September 2021, the Obama Foundation had deposited just $1 million — roughly 0.21% of the $470 million reserve it pledged — into the required endowment, and that amount has not increased since, according to recent filings.
With construction proceeding slowly and project costs rising from an initial estimate of $330 million to at least $850 million, critics say the lack of progress on the endowment raises the prospect that Chicago taxpayers could be left responsible if the center’s finances sour, Fox reported.
The foundation’s most recent tax return also shows volatile year-to-year revenue, fundraising shortfalls and unfulfilled donor commitments, underscoring concerns about the project’s financial footing.
Illinois GOP Chair Kathy Salvi called the development an “abomination,” saying Democrats’ deal with the foundation risks exposing local taxpayers to large liabilities.
“It should come as no surprise that the Obama Center is potentially leaving Illinois taxpayers high and dry — it’s an Illinois Democrat tradition,” Salvi told Fox News Digital. “Democrats in this state, when not going to prison for corruption, treat taxpayers like a personal piggy bank giving sweetheart deals to their political benefactors.”
Richard Epstein, a University of Chicago law professor emeritus who also teaches at New York University, has long warned about the endowment and advised the local nonprofit Protect Our Parks in its legal efforts to block construction of the Obama Presidential Center.
Epstein says the foundation’s failure to fund the reserve vindicates his long-standing contention that the city should not have ceded the large swath of Jackson Park to the project, Fox reported.
“They put a million dollars into a $400 million endowment, so it’s endowed. That gets you in jail as a securities matter,” Epstein told Fox News Digital. “An endowment means that you have the money in hand. But they have nothing. They just have the same $1 million that they put in in 2021 as far as I can tell. So, I regard this as something of a public calamity.”
An endowment is a fund designed to generate sufficient interest annually to cover operating expenses without using the principal, thereby eliminating the need for taxpayer assistance.
“Without an endowment, they’ll have to scramble every year to cover $30 million in operating costs,” Epstein said. “The whole point of an endowment is to avoid that volatility. They just haven’t endowed it. Of that I’m 100% sure.”
Epstein argues that if the foundation or center fails, the public could be burdened with costs for traffic rerouting, environmental impacts, or even the expenses of an incomplete building.
“Nobody knows exactly who is responsible for what if the project is abandoned or incomplete,” he told Fox. “There is a risk that the public will then have to bear that loss because the foundation won’t have the money.”
Epstein said the city has effectively looked the other way, labeling the foundation “compliant” on the endowment despite only $1 million ever being deposited — a sign, he argued, that officials never intended to enforce the requirement.