Legal Fight At City Colleges Thwarts Job Training And Money For Englewood

A rendering of a proposed data container at Kennedy-King College in Englewood. The deal to bring the container and IT training to the college fell apart after a legal dispute with the school couldn’t be resolved. MetroEdge / Provided image
A rendering of a proposed data container at Kennedy-King College in Englewood. The deal to bring the container and IT training to the college fell apart after a legal dispute with the school couldn’t be resolved. MetroEdge / Provided image

Legal Fight At City Colleges Thwarts Job Training And Money For Englewood

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Updated 10:50 a.m. on Nov. 7

A public-private partnership that would have brought revenue and job training to the City Colleges of Chicago’s Kennedy-King campus, a school desperate for enrollment in the underserved Englewood neighborhood, has collapsed.

The proposed partnership between a local startup, MetroEdge, and City Colleges devolved into an unresolvable acrimonious back-and-forth between the community college system’s top lawyer and the company, according to emails provided to WBEZ by MetroEdge. The emails were confirmed through a City Colleges of Chicago public records request. The City Colleges emails were provided to WBEZ shortly after the original version of this story published.

Now, the company has an agreement to purchase a building in Englewood to launch the data security job training and certificate program. And City Colleges refuses to talk about what happened.

“We are terminating our relationship with City Colleges. It has been challenging to say the least,” Craig Huffman, managing partner at MetroEdge, wrote in an email to WBEZ. “My wife resigned from the board of City Colleges for nothing.”

His wife, Rebeca Nieves Huffman, served on the City Colleges board of trustees for less than a year before resigning in late 2018 to avoid a perception of a conflict of interest with the project.

Nieves Huffman did not respond to a request for comment.

A new vision for Kennedy-King

One year ago, MetroEdge, which builds and manages data containers for companies, approached Kennedy-King leadership about putting a data container on campus.

According to MetroEdge’s website, it wants to set up data centers in traditionally underinvested neighborhoods and urban centers, with the goal of bringing new technology and job opportunities to those areas. It’s starting the process to launch a similar program in Atlanta and wants to do the same in Gary, Indiana.

In return for putting a data center at Kennedy-King, MetroEdge would pay the college nearly $250,000 over five years to lease the space and help the community college launch a data center facility management certificate program. Students would be trained for entry-level jobs in the growing field of data security, which is focused on protecting the areas where data is stored.

“Cloud security has been identified as a faster-than-average industry,” Kennedy-King College Vice President Eddie Phillips explained to the City Colleges board of trustees in August. Leaders said they wanted to get ahead of this trend.

MetroEdge also said they wouldn’t initially charge students tuition for the program and would pay for curriculum development. The rent would also provide a new revenue stream to the school. City Colleges of Chicago laid off 29 employees and used money from the sale of its downtown headquarters to balance this year’s budget.

Plus, the proposal could boost enrollment, which has dropped 40% since 2015 to 2,400 students this fall.

Emails obtained by WBEZ show Kennedy-King President Gregory Thomas supported the idea, and a City Colleges team visited a similar program at Ivy Tech Community College in Indiana. In August, Thomas and his team presented a new vision for the Englewood school to the City Colleges board of trustees, which featured more programming in information technology, including the MetroEdge partnership.

Those leaders said they wanted to help students, particularly low-income students of color, enter a field in which they are traditionally underrepresented.

“Careers in information technology matter to Englewood and Kennedy-King College,” Phillips told the board of trustees in August. “As IT continues to evolve and grow at a faster-than-average rate, Kennedy-King has an opportunity to meet growing demand, but to do so with greater attention to address well-known racial and ethnic gaps in the industry.”

Kennedy-King primarily serves low-income students of color, many of whom lack access to technology. More than a third of Kennedy-King students lack a computer or internet access, according to the administrator’s presentation.

Kennedy-King College enrollment has dropped by 40% since 2015. Marc Monaghan / WBEZ
Disagreements over investors

As negotiations continued, emails show a tense relationship developed between the company and City College’s general counsel. The main conflict occurred after MetroEdge signed the agreement and put down the initial $48,000 to lease the space.

As part of the agreement, MetroEdge was required to send a list of its investors to City Colleges to review for possible conflicts of interest. After MetroEdge sent the list of investors, City Colleges also asked for copies of each investor’s agreement with MetroEdge.

MetroEdge didn’t believe they needed to provide that information per the license agreement, which specifically states that MetroEdge provide an investor list. Company leaders say they were concerned about providing documents with private investor information, including bank account and social security numbers. It did not want to provide those details to a public entity subject to open records requests.

MetroEdge said they couldn’t get General Counsel Karla Mitchell Gowen to explain why the additional information was needed.

“You are correct that we did not bother adding specifics regarding what we would need to get comfortable with your investors and to ensure we are upholding our duties as a public institution. We did not need to do so,” Gowen wrote in an email.

She told them to redact the documents.

“Armed with a Sharpie marker, you should be able to easily redact the discussed information in a matter of hours,” Gowen wrote.

MetroEdge offered to send a blank copy of the agreement form all investors had signed, but Gowen insisted she needed the completed documents.

“I remain disappointed with your adversarial tone and what I perceive as your consistent attempts to undermine our efforts to bring a data center to the students of Kennedy-King College and the residents of Englewood,” Huffman wrote in an email to Gowen in September.

A legal expert who reviewed the license agreement said requests like these are common in public-private partnerships, but are usually resolvable with in-person meetings. Sometimes a third party will even review the documents for the public entity to ensure there are no conflicts of interest.

But MetroEdge said no one at City Colleges would meet with them to work through this issue.

Huffman said, and emails show, that requests for in-person meetings were rebuked or ignored.

“There’s been this feeling or stance that we’re doing something wrong, like we’re installing a sweatshop on the campus,” said Jeremy Diamond, COO of MetroEdge. “In fact, it’s the opposite and we’re willing to pay for the whole thing: training, professors, curriculum. Really just to provide a social and economic impact.”

Gowen refused multiple requests for an interview. So did City Colleges Chancellor Juan Salgado and board of trustees chair Walter E. Massey.

City Colleges spokeswoman Katheryn Hayes sent a generic statement in response to the interview requests. It did not answer WBEZ’s questions.

“It’s in Karla’s hands”

When MetroEdge couldn’t get City Colleges leadership to respond to its requests to meet, Huffman reached out to Chairman Massey for a meeting. But a board secretary pointed him back to the general counsel, noting, “it would be appreciated if you would refrain [from] contacting trustees at their personal email accounts.”

According to a text message provided to WBEZ by Huffman, when he reached out to the chancellor via text message to meet, Salgado responded, “It’s in Karla’s hands.”

In late September, Huffman made a plea to the general counsel via email.

“I have spoken to my investors and they remained concerned with the risks of sharing their confidential information,” Huffman said, “I am truly caught in a difficult position and my intent is not to ignore or be disrespectful to your request … Please be advised if we can schedule a meeting to discuss a path forward so the data center can be launched this year.”

Gowen said she would be “happy to take a call regarding the matter.”

Huffman said he called her but she never responded or followed up.

Soon after, MetroEdge gave up and Gowen sent a letter starting the process to terminate the agreement. City Colleges eventually returned the $48,000. All told, the termination cost City Colleges $250,000 over five years and a certificate and job training program in data security for its students.

Despite that, the company still has a relationship with Kennedy-King College President Gregory Thomas. He did not respond to questions from WBEZ, but recently joined MetroEdge’s advisory board.

Diamond with MetroEdge said he still can’t believe City Colleges didn’t work harder to make the data center a reality.

“There’s so much divide economically in some of our cities and specifically in Chicago,” Diamond said. “If it’s folks that are involved with these communities that are holding up people like me, from the North Side, wanting to do good … it’s disturbing.”

Kate McGee covers education for WBEZ. Follow her on Twitter at @WBEZeducation and @McGeeReports.