Cash-strapped Chicago State University spent more than $300,000 in school funds on a potential satellite campus on the city’s West Side, contradicting previous statements about a project years in the making that may never come to fruition.
In all, about $700,000 — including funds from a state grant — has been spent on the project, according to university financial records obtained by the Tribune after filing a lawsuit against the campus for violating public records laws.
The latest revelations come after university leaders spent years quietly pursuing a second campus in the Homan Square neighborhood, a plan that began after state lawmakers approved a $40 million capital grant in 2009 and provided $1 million for start-up costs in 2011.
While the university paid many of its contractors with grant dollars, it used school money to hire lawyers, an architectural firm and a project manager to oversee the work, records show. The spending came as the university was swiftly losing enrollment, facing a multimillion-dollar judgment in a high-profile whistleblower lawsuit and under scrutiny for administrative salaries and financial mismanagement.
Chicago State’s new leadership team recently acknowledged to the Tribune that former school officials needlessly and improperly spent institutional funds on the project, and blamed a former project manager for the “oversight.” Now, two years after the grant was frozen and the work mostly stopped, school leaders say the West Side campus is indefinitely shelved.
“The Board of Trustees and the university’s leadership teams’ first priority is to stabilize the enrollment and finances of the historic South Side campus,” spokeswoman Sabrina Land wrote in a statement. “Thus, the university is not pursuing a Westside Campus at this time.”
A Tribune story in February revealed that at least $370,000 had been spent on the West Side campus, and that officials had committed to contracts worth $660,000. The story also revealed that the university had pledged to buy property at 3240 and 3333 W. Arthington St. with little to no public disclosure.
But at the time, the university refused to provide records detailing how much it paid its contractors and what work was done, and the Tribune filed a lawsuit in late February.
The university since has turned over hundreds of pages of records in connection to the lawsuit and through subsequent Freedom of Information Act requests. The suit is pending.
Documents show the university used $374,000 in grant money for, among other things, a $269,000 feasibility study, $12,000 for an architect and $19,000 on marketing materials. A non-refundable deposit on the land deal cost $25,000.
About $600 in grant money was spent on working lunches, an expense that school officials now say was improper.
School leaders also authorized spending almost $324,000 in university funds on the effort, including almost $37,000 in legal fees and $20,000 for site selection costs. The university paid a project manager $267,000 for about three years of work, according to payroll records.
But when asked in a November interview whether any university money was directed to the West Side campus, Chicago State general counsel Patrick Cage denied it.
“The money that we tapped into was advance money that we received from the legislature and nothing more,” Cage said.
Asked why Cage provided inaccurate information, Land said he “misspoke.” Cage, as of May, no longer works at Chicago State and did not respond to messages seeking additional comment.
Funding for a second campus got underway in July 2011 when university leaders signed a grant agreement with the state’s Capital Development Board. The contract stipulated the school would get $1 million initially, and then three more installments of $1 million, as needed, after the university submitted documentation of its spending and progress with the project.
The first $1 million arrived in August 2011, according to a university bank statement.
The following year, the university hired Bruce Washington, a political insider with a history of government jobs with Chicago, Cook County and the state, to oversee the work.
Washington, who lives in the South Austin neighborhood, said he heard about the project manager position through industry and community contacts, and submitted his resume touting his background in capital planning.
“I’m very familiar with the West Side. I have the pulse of the community here and I knew what we’d be looking for,” Washington said. “I’ve been managing projects all of my career. I just thought it would be a good fit for me and I thought it would be a good fit for them.”
The chief of police and university services, then Ronnie Watson, approved Washington’s hiring in October 2012, records show. University officials said they did not know whether other candidates were considered.
Payroll records show Washington was paid $85,000 a year between October 2012 and June 2015, when his contract expired. He then was given a one-day contract on October 30, 2015 that paid him more than $18,000, records show.
University officials said the final payment compensated Washington for work he did after his contract ended.
Nearly all the spending the university did to launch the project occurred after Washington was hired.
University officials considered four locations in three neighborhoods for the second campus. Once university leaders settled on the Homan Square site, they paid $25,000 to the seller, the first part of a $300,000 deposit for the land.
Then-university President Wayne Watson signed the purchase agreement in September 2014, according to a copy of the contract produced by the university.
“We would have pursued this contract much differently with accountability and transparency,” Interim President Rachel W. Lindsey said.
It does not appear that any of the spending went before the board for review or a public vote, according to board meeting minutes. Washington, in addition to being project manager, also served as “fiscal officer” for the work and approved all the spending, university officials said.
Planning hit a road block when it came time to map out the most ambitious stages of the work, Washington said.
Once a property agreement was in place, university leaders prepared to hire an architect to design the building and grounds, complete the $5.25 million purchase of the property and start looking for construction firms. To do all that, Washington said, the university would need about $9 million, more funding than what had been released by the state.
Washington said the state legislature never acted on the university’s request in 2014 to release additional money from the $39 million remaining on the original grant.
In July 2015, Gov. Bruce Rauner suspended non-transportation capital projects and grants as part of wide-ranging budget cuts, pushing back against a Democratic-endorsed spending plan that was more than $3 billion short. That touched off an unprecedented stalemate that has resulted in 23 months with no budget from Springfield.
With funding frozen, work ground to a halt.
“We still held out hope that the project itself would be reactivated, but if you don’t have the money, you can’t do a whole lot,” Washington said.
About $626,000 of the state grant remains in university accounts, according to school documents, and cannot be used for any other purpose.
The unfulfilled promise of funding from Springfield for new higher education facilities is not unique to Chicago State.
Northern Illinois University, for example, is still waiting on $71 million pledged for a new education building. Illinois State University never received a $54 million allocation for a new visual arts center. A $72 million performing arts center at Western Illinois University stalled after the university spent millions on design fees. Dozens of smaller projects and funds promised for various campus renovations also remain on hold.
Still, Chicago State leaders have not stopped formally requesting the money they were promised, and then some.
As part its wish list for the fiscal year that starts in July, Chicago State asked for $61.3 million for the West Side campus: The original pledge of $40 million, plus another $21.3 million to fund expansion plans after the original buildings reach capacity.
University officials acknowledge there is little chance of getting state money for a pricey expansion, but said they continue to believe there remains a need for a four-year university on the West Side. While it’s not an active project, officials said they would again “consider a Westside campus expansion at a later time that’s financially feasible for the university.”
University trustee Nicholas Gowen was more fatalistic about the project’s future, saying that if the state provides funds for Chicago State, the money should instead help address a swelling backlog of capital and maintenance work at 95th Street and King Drive.
“We want the $60 million,” Gowen said. “We don’t want the campus.”
Chicago Tribune’s Peter Matuszak contributed.
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June 1, 2017 at 11:33PM