When the Obama Foundation secured a deal in 2018 to build its presidential center on a 19.3-acre section of Jackson Park, it pledged to create a $470 million reserve fund to protect taxpayers should the project face financial challenges. This endowment, intended to cover operating costs without tapping the principal, became the foundation’s legal requirement under the agreement with the city of Chicago. However, recent tax filings reveal that only $1 million has been deposited into the fund, raising eyebrows about the center’s financial commitment.
Under the originally agreed-upon terms, the Obama Foundation was to assume control of the park for a period of 99 years in exchange for a nominal fee of $10. The foundation has spent approximately $600 million on construction, with the total projected cost now exceeding $850 million. The failure to adequately fund the reserve fund has drawn sharp criticism, with some arguing that the promise of a taxpayer safety net is an empty one and that Chicagoans could be left holding the financial bag if things go awry.
The Obama Foundation has maintained that the project is fully funded and set to open in the spring of 2026. However, legal and financial experts remain skeptical about the true state of the center’s finances. Richard Epstein, a University of Chicago law professor, has emphasized the importance of an endowment, stating that only with a substantial fund can the project avoid potential financial instability. Epstein pointed out that the foundation has not only failed to fund the endowment as promised but has also entered into a $250 million revolving credit line that remains unpaid, further increasing the financial risk and legal liability of the project.
The center’s financial troubles have also intensified due to a lack of stable revenue streams. While the foundation has secured pledges for future donations, these are conditional on certain benchmarks being met – a fact that has left critics questioning the sustainability of the project’s funding model. Additionally, the project’s financial commitments have been met with resistance from some political figures, who have called the deal an ‘abomination’ and criticized the Obama Center for potentially exposing Chicago taxpayers to significant financial exposure.
Despite the financial and legal concerns, the Obama Foundation and its allies continue to defend the project, citing its intended role as a civic hub and its educational and cultural contributions. Nevertheless, the ongoing debate highlights the larger concerns about public trust in large-scale public projects and the need for transparency in managing public resources. As the foundation moves forward with construction, the full extent of the project’s financial risks will remain a subject of scrutiny and controversy.