Chicago’s Silent Gamble: The Reserve Fund That Never Was
Obama Foundation’s $470 Million Promise: A $1 Million Reality?
When the Obama Foundation secured approval to build the Obama Presidential Center on 19.3 acres of Chicago’s historic Jackson Park, it made a bold pledge: a $470 million reserve fund to protect taxpayers if the project faltered. That promise now appears to be little more than paper.
According to newly released tax documents, the foundation has deposited just $1 million into the required endowment—and not a penny more in years. Critics warn that this shortfall could expose Chicago residents to hundreds of millions in liability.
The Deal and the Condition
The $470 million endowment was a central condition in the city agreement that transferred control of portions of Jackson Park to the foundation. As construction moves forward, the reserve was meant to serve as a financial backstop to shield taxpayers if the center’s finances went awry.
However, recent filings show that when former President Barack Obama and former First Lady Michelle Obama broke ground on the site in September 2021, the endowment had managed only a single deposit of $1 million—a mere 0.21% of the pledged total. And that number hasn’t budged since. The foundation and city officials have remained largely silent when asked to comment.
Under the deal, the foundation essentially gained control of prime public land for $10 in 2018 via a 99-year lease. Critics view the meager endowment as a sign that local taxpayers could ultimately be left holding the bag.
Rising Costs, Risky Promises
The financial pressure only deepens as the project faces cost overruns and delays. What started as a $330 million venture has ballooned to an estimated $850 million, according to critics. Against that backdrop, the absence of serious endowment funding triggers understandable concern.
Recent financial statements show erratic revenue, shortfalls in fundraising, and unfulfilled donor pledges—an unstable foundation for a large-scale, long-term project.
Illinois GOP Chair Kathy Salvi didn’t mince words, calling the arrangement “an abomination.” She warned that under Democratic leadership, Illinois taxpayers could be saddled with the fallout. “When not going to prison for corruption, Democrats here treat taxpayers like a personal piggy bank,” she said.
Legal Voices Raise the Alarm
Richard Epstein, legal scholar and emeritus professor at the University of Chicago, has long scrutinized the Obama Center plan. Working with the nonprofit Protect Our Parks, he warned that the deal struck with the city was flawed and that the lack of endowment funding today vindicates his position.
An endowment, he explained, should be fully funded from the start so its returns support operations without draining the principal. “They put a million dollars into a $400 million endowment—while calling it ‘endowed’—that’s a legal misstatement,” Epstein told media outlets. “An endowment means you have the money in hand; they don’t. They’ve done nothing since that initial million.”
Epstein fears real-world consequences if the project fails: taxpayers might be forced to pay for traffic infrastructure, environmental remediation, or even the shell of an incomplete structure. “No one really knows who’s on the hook if this collapses,” he said. In his view, the city has quietly ignored the endowment requirement, labeling the foundation “compliant” even though the funding never materialized.
Without that cushion, Epstein warned, the foundation would scramble annually to raise tens of millions to cover operating costs. “They haven’t endowed it, and I’m absolutely certain,” he said. For a project of this magnitude, that kind of uncertainty is dangerous.
What Happens Next?
At this stage, the risk is no longer theoretical. With project costs surging and financial stability in question, Chicagoans and Illinois officials must consider what happens if the foundation fails. Who absorbs the loss? What responsibilities lie with the city vs. the foundation? And how will promises made years ago be enforced now?
So far, neither city leaders nor the foundation have responded publicly to these emerging revelations. But with the fate of Jackson Park, taxpayer exposure, and a controversial presidential center hanging in the balance, this is far from a closed matter.