What started as an intramural spat between members of the NorthCenter Chamber of Commerce exploded this week with allegations by a former president that recent decisions threaten the continuing financial stability of the chamber.
Robert Engel, past president of the chamber and an owner of Angel Sales, met with the chamber board of directors Tuesday in an effort to be slated as chamber president. Members who were present told The Bulldog that Engel talked for twenty minutes about issues he had with the executive director and the business strategy of the board.
At the end of the presentation, board members told The Bulldog they informally rejected Engel’s plea to be slated as president.
Engel then took his accusations public.
Engel Breathes New Life Into the NorthCenter Chamber
Engel, the president of the chamber from 2008-10, was a key person in turning the chamber around. Formed in 1946, the chamber had gradually lost its way and been delisted by the City of Chicago, losing a key revenue stream. And its big summer fund raiser, RibFest, was being managed by another company.
Engel and Executive Director Garrett FitzGerald worked to regain city backing.
It did not hurt the chamber that FitzGerald, a political operative, was close to then Alderman Eugene Schulter. However it was the genius of Engel and FitzGerald to promote neighborhood participation in RibFest through volunteering for the festival that moved the chamber from about $60,000 in gross revenues in 2006 to over a million in gross revenue in 2009.
In the process RibFest became a key fundraiser for neighborhood schools, annually doling out about $30,000 among Coonley, Bell, Concordia, St Benedicts, the Neighborhood Boys and Girls Club and other charities.
All in return for the schools, and other not for profits, sending volunteers to man such stations as the beer tent at the festival.
Engel Moves On
Engel’s term ended in 2010 due to chamber bylaws that restricted the consecutive terms of its officers.
Filing the position was Simon Stein.
Stein set his sites on resolving an issue that worried the board: most of the chamber’s revenues came from RibFest. Poor weather could put the organization into financial turmoil.
Like many chambers in Chicago, the NorthCenter Chamber manages a Special Service Area. A taxing district created in many business districts, the SSA manages litter, removes snow from sidewalks, beautifies the area with garden plots and promotes the area.
The SSA management fee and city grants allow the executive director to work full-time for the chamber.
However city grants have been under attack and many people do not expect them to continue beyond three years.
In 2010 the Office of Inspector General of Chicago, Joseph Ferguson, attacked then mayor Richard M Daley’s use of one-time revenue streams, such as the sale of the parking meters, to fund continuing operations.
Among the proposals by Ferguson was ending the $24,432 annual award to the NorthCenter Chamber and all other chambers. Ferguson forecast annual savings of $4.9 million if the city ended support for commercial area development.
Ferguson was not alone in his attack on the chambers.
The Civic Federation, backed with grants from the Chicago Community Trust, the John D and Catherine T MacArthur Foundation, the Joyce Foundation and the McCormick Foundation, issued a report that forecast savings of $1.9 million every year if support for commercial area development was axed.
Although panned at the time, many of the recommendations of the two reports are now on the table, such as standardizing trash pickup based on geography and not political wards.
Further, each SSA has a limited life. Continuation of the SSA is dependent on approval by real estate owners in the SSA. In the current climate of government reduction, it is not clear what will happen to SSA 38.
New Plan: Use SSA Expertise
The chamber identified its ability to manage and develop SSAs as a key strength. Stein, in an exclusive interview with The Bulldog, said the chamber doesn’t want to manage other city chambers of commerce. However, the chamber has a skill set that will encourage SSA development and good business practice.
“This is a skill set we have,” Stein said. “SSAs have cleaner and more attractive areas for businesses. Look at Irving Park Road here. Further down you see weeds, trash and so on. The SSA makes it a better area.”
Stein’s enthusiasm for SSAs was also related to The Bulldog on background by a ward worker in another ward who asked not to be identified as he was speaking without approval of the alderman. He said that in that ward they are seeking help in establishing SSAs. Telling The Bulldog that the ward and alderman have been working for years to develop an SSA, he noted “the businesses are against it.”
“But, you need someone there all the time to clean litter,” it was explained. In a ward without SSAs the trash returns in a single day.
Another person, a spokesman for the Chicago Department of Economic Development, told The Bulldog there is an application submitted to establish a new SSA in the 33rd Ward. There is no other service provider in the area he noted.
Engel Returns to Oppose Plan
Engel’s charges against the chamber and FitzGerald start with the creation of a new company, the Northwest Community Corp.
“Eyeing an opportunity to expand their political footprint beyond the chamber’s boundaries,” he said in a press release, “the executive committee plotted behind the backs of their own board of directors to set up the new company.”
Stein bristled at the charge. His voice trembling, Stein noted his years of working with Engel but then denied the key charge of lack of transparency.
“The whole board voted on this, including Laura Engel” Richard Engel’s wife, he said. “It hasn’t operated in secret.”
“Does it make sense (for the chamber) to manage an SSA outside of NorthCenter? No! That’s why there is a new corporation to manage this,” Stein said.
Engel, who did not return multiple messages, made other charges as well. Saying the new company puts the charitable role of the chamber at risk, he said the new corporation will use a paid board of directors and staff. Engel said the Northwest Community Corp received “a blank check” to start.
“The new corporation is owned by the chamber,” Stein said in reply. Stein noted that chamber members volunteer to work on the board of directors.
“We are currently out of pocket a small amount,” Stein said identifying about $2,500 of start-up costs. “We won’t spend more without community support in target areas. The chamber assets are being protected by the creation of a separate company.”
“The idea of a secret cabal is simply not true. And I’m very upset,” Stein said. “It is legal. It is appropriate. And it is ethical.”
Engel’s Charges Against the Chamber, Responses
Engel: The NorthCenter Chamber of Commerce Executive Committee bypassed its own bylaws to fund the North West Community Organization at an October meeting.
Chamber: At an August meeting, the chamber Board of Directors approved a start-up loan for the formation of the North West Community Organization.
>>>
Engel: The Executive Committee plotted behind the backs of the Board of Directors to set up the North West Community Organization. The new NWCO would have a paid board of directors and paid staff. The intent is to profit from the taxpayers.
City: New group will receive normal management fees, probably enough to pay insurance benefits of full-time employees.
Chamber: The chamber has been transparent. It met with Engels a number of times to review records. The chamber owns the new corporation. It will help defray expenses for the chambers full-time staff. The North West Community Organization was organized as the Northwest Community Corporation.
>>>
Engel: The new corporation has landed its first deal in the 33rd Ward.
City: There is an application pending in the 33rd Ward by the new corporation.
>>>
Engel: The CEO of the new corporation is Garrett FitzGerald. FitzGerald is a political insider.
: The profile of Garrett FitzGerald on LinkedIn shows he is the CEO of the new corporation. He has worked in the past for former Ald. Eugene Schulter, on the Cook County Board of Commissioners and for the Chicago City Council.
Bulldog: He was among the people passing petitions to put Eugene Schulter on the ballot as alderman in the previous aldermanic election.
>>>
Engel: There is a risk that a failure by the new corporation could lead to no charitable giving this year. The chamber gave the new corporation a ‘blank check.’
Stein: The chamber has put only $2,500 at risk. Business is about managing risk. One weekend of poor weather could put the chamber in financial danger.
Chamber: Although the new corporation is seeking a $50,000 line of credit that is being backed by the chamber, the chamber has not yet put up the certificates of deposit necessary for that line of credit.
>>>
Engel: The new corporation does not have the oversight of the chamber. The community is not gaining from the grant process of review.
Stein: Everything is transparent. The Board of Directors approved everything.
Bulldog: SSAs have a board of supervisors who meet, generally every month. Those meetings are open to the public and operate under the Open Meetings Act.
>>>
Engel: The new corporation is using privatization to profit from the taxpayers.
Stein: We can argue more broadly about the usefulness of SSAs. But if Mell wants (an SSA) in his ward, someone is going to manage it and I’d like it to be us.
>>>
Engel: FitzGerald is making $90K per year plus benefits.
Stein: FitzGerald’s compensation was approved by the Board of Directors.
FitzGerald: I took a pay cut to join the chamber. I took another when funding was slashed. I’ve often sacrificed my family’s financial security for the chamber. This pay increase is very recent.
>>>
Other: Chamber by-laws are being changed without approval of the members.
Chamber: The Bulldog located the changes being discussed and is presenting them below.
>>>
Other: The activities of the chamber are not relevant to me.
Bulldog: Beside for backing the schools and major and minor community events, all of which supports the life style and probably the real estate value of the community, we completely agree. (Snark Alert)
- Engels Press Release
- NorthCenter Chamber Response
- Changes to NorthCenter Chamber of Commerce By-laws
Illinois Secretary of State screenshot of the registration for the Northwest Community Corporation.
The Welles Park Bulldog has participated in a number of activities as a member of the NorthCenter Chamber including being a sponsor of the Bells of Ravenswood and of the current running For the Love of Art Show.
Related posts:
- Stein elected prez of NC Chamber
- Area still affected by snowfall; parking tight, impassable sidewalks
- Lincoln Sq Chamber awarded 3-Star accredited
- Widely criticized city budget moves forward; the silence of officials
