Cabrini-Green residents were promised 2,500 construction jobs. They got 40.

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Section 3 business owner Raymond Richard is among the dozens of Section 3 businesses that didn’t receive new Chicago Housing Authority contracts in 2020. His business is now struggling. Under Section 3 of the Housing and Urban Development Act, agencies such as the CHA must give “to the greatest extent feasible” jobs and contracts to the tenants it serves and other low-income residents. The Better Government Association/CatchLight Local
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Section 3 business owner Raymond Richard is among the dozens of Section 3 businesses that didn’t receive new Chicago Housing Authority contracts in 2020. His business is now struggling. Under Section 3 of the Housing and Urban Development Act, agencies such as the CHA must give “to the greatest extent feasible” jobs and contracts to the tenants it serves and other low-income residents. The Better Government Association/CatchLight Local

Cabrini-Green residents were promised 2,500 construction jobs. They got 40.

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Raymond Richard started his tiny, struggling Chicago construction business on an empty City Hall promise made a quarter century ago.

At the time, Mayor Richard M. Daley was pushing his controversial plan to tear down Cabrini-Green, an embattled Near North Side public housing development. From the rubble would emerge a beautiful, mixed-income community dotted with luxury condos, new schools and upscale stores.

To overcome a backlash from the residents and advocates, Daley promised residents who wanted to return would be welcomed — a pledge mostly unfulfilled. But he also made a less well-known promise: The residents would benefit from the construction boom with contracts and jobs — thousands of jobs.

It was that promise of economic opportunity that drew Raymond Richard home. Now 53, he grew up in the Cabrini row houses and the high-rises Daley demolished. Like so many others, he wanted to believe.

“We wanted to be a part of it, but every time we requested it, they already had somebody,” Richard said about the building contracts. “If you know I am from Cabrini, why not put me in Cabrini?”

“Everybody is selling dreams.”

A Better Government Association investigation — including the examination of hundreds of pages of documents and more than two dozen interviews with former and current residents, advocates and experts — reveals a systemic failure by the city to keep its promises to Richard and hundreds of others who tried and failed to land construction jobs and contracts at the taxpayer-financed buildings sprouting on the Near North Side.

From the public records available, the BGA could find only 40 former Cabrini residents who received the higher-paying, coveted construction jobs on the Near North Side, despite the Daley administration’s promise there would be more than 2,500. Of those 40, only 10 have been hired since 2009.

From 2009 to 2020, an additional nine received laborer jobs elsewhere in the city. And 72 former Cabrini residents got lower-paying jobs — as janitors, groundskeepers, security guards and laundry room attendants — throughout the city, according to CHA records.

Cabrini-Green was once home to more than 3,600 families, but the 91 jobs given to the residents since 2009 amount to less than 2% of the more than 6,000 publicly funded jobs created by the CHA and its contractors across Chicago during that time.

Mayor Lori Lightfoot and her CHA chief, Tracey Scott, declined to be interviewed for this report and provided few answers to detailed questions given to them in writing by the BGA. Instead, Scott said via email through a spokeswoman the questions referred to “decisions that were made many years ago,” and her agency continues to work with businesses owned or operated by public housing or other low-income residents, known as Section 3 businesses.

“The redevelopment of Cabrini-Green has created economic growth and opportunities that have benefited all residents, including families living in subsidized housing,” the emailed statement added.

Janitors, security guards, movers

Under Section 3 of the Housing and Urban Development Act of 1968, the CHA is required to give “to the greatest extent feasible” jobs and contracts to the tenants it serves and other low-income residents. To show compliance, it is required by federal authorities to track its efforts.

But in 2011, a handful of Section 3 business owners from Chicago went to Washington, D.C., armed with complaints of being shut out of the contracting process and asked lawmakers and HUD officials to intervene.

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A worker paints a corner on the third floor of the Elm 551, the latest development part of Parkside of Old Town, a mixed-income complex that’s more than a decade behind schedule. Davon Clark / The Better Government Association/CatchLight Local

As demolition of public housing buildings across Chicago continued and mixed-income communities sprouted at Cabrini and other parts of the city, HUD launched an investigation into the complaints about the CHA.

The investigation found Section 3 businesses were being routinely sidelined by the agency. From 2008 through 2010, the CHA awarded $1.3 billion in contracts — and not a single one went to a Section 3 business, according to the HUD report.

As a result, the CHA entered into a “voluntary compliance agreement” with HUD, which required the CHA to develop set-aside benchmarks for Section 3 businesses and to regularly report on its progress to HUD.

Under that 2011 agreement, the CHA was required to reserve at least 30% of the new jobs it funds for these Section 3 workers, “with a preference for residents at the development where the work is being performed.”

Statistically, the CHA exceeded the 30% jobs goal over the last decade, giving low-income workers 51% of all new jobs — on par with national averages. But a closer look at the jobs reveals the overwhelming majority were the lower-paying, less coveted jobs, the BGA investigation found.

In response to a request for public records under the Freedom of Information Act, the CHA said it could not provide an account of jobs awarded from 2000 through 2008, saying it did not have the records.

By using CHA data from 2009 through 2020 and city records for three years in the earliest stages of the redevelopment plan — 1997 through 1999 — the BGA was able to compile an accounting of jobs awarded in those years.

Righting the wrongs

The CHA’s agreement with HUD also required it to award at least 10% of maintenance, repair and construction contract dollars to Section 3 businesses. It also promised at least 3% of all other contracts would be steered to those businesses.

To accomplish this, the CHA set up a mentoring program in 2016 to help Section 3 business owners navigate the bureaucracy. The program — called Job Order Contracting, or JOC — has been touted by CHA critics as the agency’s best attempt at correcting years of wrongs.

More than 100 pre-qualified companies were signed into one- to two-year contracts fulfilling job orders on a rotation basis. Aside from the contracts, the CHA also offered mentorship, financial and legal assistance and backed Section 3 companies, so they could get private loans.

For a while, it worked.

From 2017 to 2019, the first three full years under the JOC program, CHA payments to Section 3 businesses in the program increased from 13% to 26% of the agency’s total payments to contractors, records show.

By 2020, the Section 3 businesses received $42 million for work awarded by the CHA, about 22% of the agency’s total payments to contractors that year.

Then the CHA altered the rules over the summer of 2020 and everything changed.

Before, the program catered mostly to smaller Section 3 businesses owned by low-income residents. Under Scott, it was expanded to include any business — including larger, more established contractors — as long as they met CHA requirements for hiring low-income workers.

In October of that year, the CHA issued new contracts for businesses to receive job orders on a rotating basis. More than half of the original low-income business in the JOC program didn’t get in. According to the most recent CHA data, 2021 payments through August to those businesses plummeted to $5 million, less than 8% of all contractor payments.

By opening up the JOC program to larger businesses, many of the smaller Section 3 businesses owners couldn’t compete. Under new JOC program rules, only 42 of the 106 companies are owned by low-income residents.

In written responses to questions, agency officials said they remain committed to Section 3 businesses and “recognize the need for individualized support and mentorship to help residents and businesses be successful in achieving sustainable long-term employment outcomes.”

But more than a half-dozen business owners interviewed by the BGA said the recent changes have hit their businesses especially hard. They decry the loss of a mentoring program to help them with bureaucracy and paperwork problems and complain of delays lasting many months.

“They never gave a f*** about us working,” said J.R. Fleming, a Cabrini-Green leader who has been pushing the CHA to fulfill the broken promises for jobs and contracts for the last two decades.

The CHA attributes the drop in payments to Section 3 businesses in 2021 to changes in the JOC. Property managers now handle apartment rehabs, which had been the bulk of the job orders for Section 3 businesses. In previous years, the CHA handled those job orders directly. But even business owners who got into the JOC program under the new rules say they are struggling because they’ve waited more than a year for a job order.

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Tamiko Holt, a Section 3 business owner, speaks during a march earlier this year in front of the Chicago Housing Authority’s headquarters at 60 E. Van Buren St. in Chicago. Davon Clark / The Better Government Association/CatchLight Local

Scott, the CHA chief executive, acknowledged the delays during a June CHA board meeting, blaming them on software problems from a computer network change.

“So we have experienced some delays with that,” Scott told the board members in June. “But I’m assured by my staff that within the next week or two, you should start seeing all of that going through.

“And we expect the Section 3 pool contractors to be quite busy through the rest of the year.”

‘Many nights where I’ve cried’

Richard’s company, Brothers Standing Together, was among those that didn’t make it into the new JOC program.

“There have been many nights where I’ve cried,” said Richard.

As a teenager in the 1980s, he said, government neglect at Cabrini-Green was palpable. Manufacturing jobs in the area were drying up, and the Cabrini buildings were falling into disrepair. Richard said he joined a gang at an early age, sold drugs and became addicted. He was in and out of prison, and from 2004 to 2006, he was briefly homeless and sleeping on Lower Wacker Drive.

But by 2009, Richard said he had found a purpose. He worked and volunteered with organizations helping find jobs for people who had been incarcerated. Along the way, he said, he picked up skills he would eventually bring back to Cabrini.

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The redevelopment of Cabrini-Green is more than a decade behind schedule. The Chicago Housing Authority has yet to redevelop a number of sites where Cabrini buildings once stood. Davon Clark / The Better Government Association/CatchLight Local

Richard’s plan was simple. He would be a matchmaker between the unemployed Black men he sought to mentor and the millions of dollars in public money now flowing into his old neighborhood. That’s when he formed Brothers Standing Together.

For a few years, he said, he struggled to convince developers and construction companies to hire the men. Then in 2013, he decided to build his own company and win some of the CHA contracts promised by City Hall so long ago.

The JOC mentoring program helped Richard crack open the door, he said.

In 2017, the CHA began giving his company small job orders to fix and rehab apartments. All told, Richard’s company collected $400,000 over three years from those contracts, records show. He said he welcomed the work, but it was never enough to sustain his fledgling endeavor.

After losing his spot on the JOC program, his company managed to land one small landscaping contract in spring 2021, not nearly enough for his business to survive.

Richard left Chicago and his beloved Cabrini-Green community last spring, hoping to start again with a new fiancee and a new life in Houston.

“I’m not going to go back to the streets,” he said.

Still waiting

Calvin Jackson, owner of Nehemiah Group Construction, made it into the JOC program, but he is one of the business owners who have waited more than a year for a job order.

“A lot of us are falling out of compliance because we don’t have the paperwork right,” he said.

Jackson said he took odd jobs to stay afloat but worried about losing his spot in line for a CHA job order, so he never took on long projects. When he complained, he was assured by a CHA employee the orders were forthcoming.

When a job order finally came, he said he was behind on bills, including workers’ compensation insurance, which the CHA requires. He borrowed money to pay the bill and relied on a network of fellow Section 3 business owners to make his way through all the paperwork the CHA required. He filed it and waited, again, for the final green light. But it didn’t come. He had to borrow money a second time to pay the insurance. But he didn’t get the green light before another insurance expired.

“They waited me out,” Jackson said in early December. “They want me out of the way.”

Business owners such as Jackson said the CHA not only pulled the plug during the COVID-19 crisis but continued to make it difficult for them to stay afloat. So they began an awareness campaign. They bought radio time, ads in neighborhood newspapers, and contacted members of Congress for help. They even hosted rallies downtown.

Tamiko Holt, who attended one of those downtown rallies, is another Section 3 business owner who said she also waited more than a year for a job order.

“We have been building; we have been teaching; we have been creating businesses; we have opened up the space at CHA for contracting for Black people,” Holt shouted into a bullhorn in the spring outside the CHA offices downtown. “And we will be damned if we let them take us five steps back, and we only move two steps forward.”

At a CHA board meeting in November, Holt said the CHA had allowed its developers and contractors to block Black Chicagoans from jobs and contracts. “Shame on you,” she said.

A success story

One former Cabrini-Green resident has made a success story out of CHA contracts.

Cornelius Griggs, owner of GMA Construction Group, is the first Black-owned Section 3 business to be hired as the general contractor to build replacement housing for former Cabrini-Green residents.

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Cornelius Griggs, the president of GMA Construction, is the first former Cabrini-Green resident hired as the general contractor to build Cabrini replacement homes. Davon Clark / The Better Government Association/CatchLight Local

In February, with snow still on the ground, Griggs joined city, state and CHA officials in a ceremony to announce Schiller Place, a 48-unit complex on North Halsted and West Schiller streets, the former site of a YMCA.

As a high school student living in Cabrini-Green, Griggs remembers people around him trying to understand the magnitude of the orders to vacate their homes and the ramifications for the neighborhood.

Not until he said he visited the area after a stint in the U.S. Army did he realize how complete the transformation would be.

“That’s when you realize, ‘Oh, my God, they are taking over this area,’” he said. He said it didn’t take long to recognize the Daley administration’s broken promises.

“What really happened was the status quo happened –– the developers came in, and the developers hired their friends, who had construction companies,” Griggs said. “And in the process, people got left out of hundreds and millions of dollars worth of construction work.”

“It’s unfortunate, but that’s something that happens constantly across our city.”

He went back to school, earned a master’s degree with a concentration in construction management, and in 2015, he quit his construction job to devote himself to his company.

With the help from the JOC program, he said, his company increased to 89 employees, with an annual revenue of more than $100 million.

“I am intentional about making sure that I hire people of color on our projects,” Griggs said in a recent interview with the BGA. He said he credited the JOC program with helping him get his start. Although records show he has developed some political experience, as well.

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Cornelious Griggs’ GMA Construction is building Schiller Place, a 48-unit complex at North Halsted and West Schiller streets, the former site of a YMCA. Davon Clark / The Better Government Association/CatchLight Local

He formed a political action committee, Leaders for Tomorrow, pouring in nearly $20,000, records show. Separately, Griggs and his company have contributed more than $100,000 to candidates. The contributions from himself, the PAC and his company have gone mostly to Black politicians, such as Ald. Walter Burnett, 27th, whose ward includes Cabrini-Green.

In addition to Grigg’s contributions, the BGA found Cabrini developers gave more than $1.3 million to political campaigns, including Daley and his successors, Rahm Emanuel and Lightfoot.

Private developers and unions

Part of the problem causing a lack of Section 3 jobs and contracts centered on a well-known pattern of construction-trade unions historically rejecting Black workers.

The CHA acknowledged this problem in several reports to the federal government. It reported instances of stewards turning away low-income workers from job sites for not being union members. In 2013 and 2014, the agency said its contractors were having difficulties subcontracting with Section 3 businesses because of their labor agreements with unions.

In 2017, in part to address the problem, the agency signed a “project labor agreement” with trade unions, guaranteeing the use of union labor at CHA projects. The agreement came with promises of jobs and training for residents of subsidized housing whether or not they were a member of trades unions.

To Holt — who grew up in public housing, including Cabrini-Green — the problems Section 3 businesses are experiencing are a product of Daley’s privatization of public housing. The CHA bids out construction projects to private developers, which in turn hire general contractors. And in Chicago, those general contractors have agreements with unions that keep out nonunion businesses.

“It makes it impossible for low-income Section 3 businesses to get work because the majority are not union,” Holt said. “They need to stop with the games already. I have a child that I’m trying to put through college.”

‘An all-white boys club’

Meanwhile, the city and CHA earlier this year moved to allocate the latest taxpayer installment on $2 billion in public money to continue redeveloping the site of the Cabrini-Green towers and surrounding area, a decadeslong transformation that has turned the once-predominantly Black neighborhood into an upscale, mostly white neighborhood.

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Construction at the intersection of North Clybourn Avenue and North Larrabee Street in April. Davon Clark / The Better Government Association/CatchLight Local

The idea was controversial from the start, prompting lawsuits by residents and raucous protests over the loss of their community. Amid the controversy, Daley hired a couple of city workers in 1997 to start a program matching Cabrini-Green residents with jobs — the Community Area Resident Economic Center. Gaylon Roberson was one of two job counselors working out of a construction trailer on a vacant lot in the neighborhood.

“The construction people did not want to hire the residents,” Roberson said. “It was an all-white boys club.”

Roberson’s job was to persuade developers and builders to hire more residents. She said the public pressure prompted private companies making millions from the redevelopment to create a few positions for them.

“But that was not a large hiring pool at all,” she said.

Records from the time show the center placed 521 people in jobs from 1997 through 1999, mostly service jobs, fast-food restaurants, retail and grocery stores. Though the jobs were not construction jobs he promised, Daley often touted the center’s success at campaign stops.

Even that effort was short-lived. The Daley administration abruptly closed the center in 2001, telling the Chicago Reader the center’s trailer headquarters was on a vacant lot earmarked for a new development.

“This was always a transitional area, a transitional trailer. We had to get out of there,” a midlevel city official told the Chicago Reader, which headlined its story “The Push Before the Shove?”

Skeptics were everywhere.

“This is only a trailer,” an employment counselor at the center told the Chicago Reader. “They can move a trailer anywhere. They don’t even have to keep us in a trailer. … There’s lots of places we could go.”

‘A black mark for me’

Developers interviewed by the BGA said they tried hiring workers from the community, but they, too, found it to be a struggle.

“It’s always been a problem because the unions have always been not prone to hire minorities, nor were they prone to put minorities into their apprentice programs,” said Dan McLean, a developer who built homes on land around the Cabrini footprint. “So you had a very difficult time finding enough minority contractors to fulfill your requirements.”

Peter Holsten, president of Holsten Real Estate Development Corp., the sole developer on the Cabrini footprint, said he also struggled to ensure his projects met benchmarks to hire former Cabrini residents.

Holsten’s company — which has won more than $300 million in public funds to redevelop the land — said he hired resident-owned businesses in the 1990s on a project near Cabrini.

More recently, records show, Holsten paid into a CHA fund established to help low-income tenants, rather than hire them. At other times, the CHA waived the hiring requirements altogether.

In the most recent phase of Parkside of Old Town, the project he has been developing since the mid-2000s, records show Holsten awarded $1.4 million in subcontracts collectively to three businesses owned by low-income Chicagoans. That amounted to less than 2% of the $75 million in taxpayer dollars spent on that phase of the mixed-income housing project.

Holsten said one of those three Section 3 subcontracts went to a firm owned by a Cabrini resident who was hired to do security. In an interview with the BGA, Holsten said he trusted his general contractor when he said he hired residents.

“I’ll blame myself that I didn’t push him hard enough,” Holsten said. “He kept telling me that he had it under control, and he really didn’t.

“That is a black mark for me, so I don’t like that.”

BGA

WBEZ’s Natalie Moore, BGA reporter Kiannah Sepeda-Miller and BGA interns Siri Chilukuri and Natalie Eilbert contributed to this report. This story was a collaboration with CatchLight and the Institute for Nonprofit News as part of the CatchLight Local Visual Storytelling Initiative. All contemporary photographs by CatchLight Local Fellow Davon Clark.

This story was produced by the Better Government Association, a nonprofit news organization based in Chicago.