Chicago Subcontractor Shuts Down After Obama Center Dispute

Weeks after the grand opening of the Obama Presidential Center in Chicago, a subcontractor that earlier claimed it was owed nearly $4 million has ceased operations, resulting in the layoffs of 25 union workers.

Mike Owen, who owns Adamson Plumbing Contractors based in Chicago, shared with reporters that the company couldn’t keep up with the financial strain. They had to abandon six other construction projects and were edging closer to bankruptcy. Owen described the closure as a tough yet necessary choice to help the business survive.

“Letting go of nearly 30 people is not something anyone in our field wants to do,” he said. “It’s incredibly difficult, especially when you know the job could be done well and profitably. But we felt immense pressure,” he added, reflecting on the tough circumstances.

Financial Struggles for Subcontractors Post-Construction

Adamson worked at the center under the name Marsh Adamson and later filed a $1.72 million mechanic’s lien against the facility amid a growing payment dispute turned legal battle.

This story is just part of a bigger picture where several subcontractors have reported severe financial difficulties after their involvement in building the center, which was marketed as an opportunity for smaller and minority-owned enterprises.

An earlier investigation highlighted that many subcontractors, including Black-owned businesses, were racking up debts or absorbing losses that ranged from hundreds of thousands to millions of dollars. The most significant dispute comes from Concrete Collective, which is pursuing an additional $40 million in payments.

The Final Straw

Leading up to the center’s opening, Owen admitted the project had cost his firm $3.9 million due to various issues like delays and unexpected changes. He had spent months negotiating with Lakeside Alliance, the project’s manager, but when those talks fell flat, he felt compelled to go public.

At the time of the center’s opening ceremony, Owen reached a breaking point. He stated that an agreement had been made for Adamson to send two plumbers for urgent tasks on campus at a higher rate. In return, he was to receive a portion of the overdue payment around the time of the center’s launch.

Yet, Owen noted that he had not received the payments promptly, which eventually led the company to shut down operations on June 25. “We negotiated in good faith, but it felt like I had to hit the brakes,” he remarked, emphasizing the devastating impact on his business.

Owen shared that despite receiving $100,000 in promised payments and around $35,000 through change orders from Lakeside, it only lessened the company’s debt to a single supplier, leaving operations halted. “It’s almost as if the timing was off; it felt like it was too late,” he remarked on the situation.

Now, Owen is working from home, having vacated the premises, while he decides what the future holds for his company amidst this dispute.

Beginning of a Legal Battle

The struggle over the nearly $4 million owed escalated when Marsh Adamson filed a mechanic’s lien for unpaid plumbing work. This lien, although significantly lower than the total claimed loss, was deemed to cover only the most straightforward amounts due.

Owen clarified that the lien does not preclude his efforts to pursue the full figure that he believes is fair. “We will hold the ownership accountable,” he insisted, admitting that initiating legal proceedings isn’t something he relishes but feels necessary.

Lakeside Alliance, which managed the construction and included a coalition of four Black-owned construction firms, indicated that they oversee many contractors involved in the center’s development. They stated that they remain committed to resolving outstanding issues related to the project.

The Obama Foundation, responsible for overseeing construction, affirmed that Lakeside managed financial matters. Although they didn’t address Owen’s claims directly, they emphasized their commitment to timely payments.

However, the project has faced criticism regarding rising costs, which jumped sharply from initial estimates. The projected budget soared from $350 million to over $1 billion. Additionally, just $1 million has been set aside in a promised reserve fund intended to safeguard Chicago taxpayers.

A Strained and Frustrating Experience

Owen expressed feeling drained both financially and emotionally due to the situation. He reflected on the opening ceremony featuring top performances that starkly contrasted with the struggles of the workers behind the center’s construction. “The celebration felt overshadowed by our fight,” he noted.

He also expressed frustration towards local officials, particularly questioning why Illinois Governor J.B. Pritzker hasn’t made any public remarks regarding the layoffs and disputes. Owen is not attributing direct blame to former President Obama but believes it is vital for the foundation to acknowledge concerns raised by subcontractors.

“It’s apparent to me that there’s a lack of care from the ownership side,” he conveyed, sharing the hope that disputes would resolve post-construction—something that hasn’t come to fruition. “We thought it would all work out. Until it didn’t,” he concluded.