Obama Presidential Center subcontractors claim millions still unpaid

CHICAGO — The Obama Presidential Center was billed as a lasting legacy to former President Barack Obama, and its construction was touted as an ambitious model built with aggressive goals for minority-owned and local businesses.

But now, some of the very subcontractors who helped build the 19.3-acre campus on Chicago’s South Side say they are facing financial ruin as they race to recover millions of dollars they claim remain unpaid ahead of the center’s grand opening Friday. Overall construction costs were reported to be $830 million in 2021, and have likely climbed past the $1 billion mark.

A Fox News Digital investigation identified multiple construction firms claiming losses ranging from hundreds of thousands of dollars to tens of millions. The allegations cut against one of the Center’s defining goals: helping minority-owned businesses and local contractors grow through one of Chicago’s highest-profile construction projects. Several of the complaints reviewed by Fox News Digital come from firms that were supposed to benefit from that mission.

Among them is Adamson Plumbing, whose owner Mike Owen says is nearly $4 million in the red after years of work on the project.

“That is a hole that no subcontractor, small business can survive,” Owen said.

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Subcontractor owners interviewed by Fox News Digital described what they characterized as a chaotic work environment marked by repeated design changes, rework, scheduling disruptions, extensive oversight and years-long compensation disputes that still remain unresolved.

Several also described what they viewed as a wall of silence surrounding the project, with some declining to speak publicly or requesting anonymity because of confidentiality agreements or fears of professional retaliation.

The allegations emerge days after a Fox News Digital investigation reported that the Obama Foundation’s reserve fund — originally promoted as a $470 million financial safeguard intended to help protect taxpayers if the project encountered financial trouble — remains funded at roughly $1 million.

Nearly $4 million in the red

Standing outside the center on a gloomy Friday afternoon, Owen flipped through spreadsheets and financial records that he said documented millions of dollars in losses tied to the project.

Owen said the project stretched on for years longer than anticipated, forcing his company to absorb millions of dollars in labor and overhead costs as work demands changed and expanded.

He said the losses have drained the company’s reserves, created uncertainty for employees and could ultimately force layoffs. Owen also said the years-long effort to recover what he believes is money owed has taken a significant toll on his mental health.

“I haven’t had eight hours or six hours sleep in over a year,” Owen said. “I’m cooked emotionally. I feel like an aluminum can that’s been thrown in front of a steamroller. We’re crushed. And I have to fight for my company and for my people.”

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As the center prepares for a star-studded pre-opening celebration on Thursday featuring performers including Bruce Springsteen, Stevie Wonder and John Legend, Owen said it has been difficult to watch the buildup and soft-opening events take shape over the past few weeks while his company struggles financially.

“It was kind of hard seeing some local and national celebrities high-fiving and back-slapping here about the work that’s been done,” Owen said. “The backdrop of a coming celebration is kind of hard to swallow for me and for some of my peers at the moment.”

Owen, whose company is not minority-owned, said he decided to speak publicly only after months of failed efforts to recover losses he attributes to the project.

“As for me and my company, I’m at the end of my rope and I see no other choice than to have to tell my story,” Owen said. “This is not to embarrass anybody, but this is just to make sure that the truth gets told out here of what has happened to the companies that poured their heart and soul into getting this job complete and operational.”

He said unnecessary rework, delays and more than 100 change-order requests left his company absorbing millions of dollars in additional costs.

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The Obama Foundation, Obama’s private nonprofit organization that oversees the construction, told Fox News Digital that it paid Lakeside Alliance as the project’s construction manager and that Lakeside was responsible for hiring, managing and paying subcontractors working on the center.

The Obama Foundation also said it has no outstanding disputed charges with Lakeside Alliance — a joint venture involving multiple construction companies — and no contractural relationship with Lakeside’s subcontractors.

Lakeside Alliance said projects of this scale are inherently complex and that outstanding project matters often continue long after construction ends. The alliance said approximately 475 contractors worked on the project, generating significant opportunities for local tradespeople and businesses, and that it remains committed to working through outstanding matters to successfully close out the project.

Neither Lakeside Alliance nor the Obama Foundation directly disputed allegations from some subcontractors that they incurred losses while working on the project.

Fears of speaking out

Advocates for Black subcontractor firms say those companies have been muzzled by a non-disclosure agreement and a reluctance to speak publicly because of the prestige surrounding the project in Obama’s adopted hometown, a Democratic stronghold, as well as concerns that speaking out could jeopardize payments.

“They are scared to death about talking about it,” Omar Shareef, the president of the African American Contractors Association, told Fox News Digital outside the center on a recent Saturday. The group advocates for Black-owned construction businesses and was founded by Shareef in 1989.

“I’ve never seen this happen since I’ve been in business,” Shareef said. “The building does look nice, but the fact doesn’t matter that they’re not paying our damn contractors.”

Fox News Digital independently interviewed several contractors who described similar concerns.

Shareef said several Black subcontractor owners began privately approaching him about six months ago, claiming significant losses tied directly to the project. The concerns are particularly notable, he said, because the project was publicly promoted as an opportunity for minority-owned businesses and local workers.

“The promise was that this project was going to uplift minority contractors and uplift the community,” Shareef said. “What sense is celebrating Juneteenth if our Black contractors are not getting their money?”

“Some of the people have put their mortgages up, they’re going to lose their bonding… they are going to lose their relationship with their supplier as well as their banker.”

Shareef said that being in the red not only puts them at financial risk, but it also makes it harder for them to secure future projects. Shareef said his group plans on staging a protest outside the center on Thursday at 10 a.m. CT.

“That’s a bad signal to put out the fact that seven to eight to maybe 10 of our contractors in our community are going to be eliminated from doing business because of the debt that they incurred on this particular project,” he said. “If they would have known it was a Trojan horse or a Pandora’s box, I don’t know if they would have raced as much as they did to be a part of it.”

Fox News Digital has not independently corroborated the claim that these subcontractors will be forced out of business as a result of their work on the Obama Presidential Center project.

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Local companies on the brink

One minority-owned subcontractor owner told Fox News Digital his company was up to $2.5 million in the red but declined to speak publicly, citing non-disclosure agreements and ongoing efforts to resolve disputes. The owner said the contract for the job was originally expected to last 24 months but ultimately stretched to about five years.

Fox News Digital was unable to independently verify the company’s claimed losses. Shareef said the owner told him the same story but the owner wouldn’t provide Shareef with documents due to the NDA.

The largest publicly known dispute tied to the project involved II in One Concrete, a Black-owned firm that was part of the Concrete Collective — a joint venture that also included Trice Construction and W.E. O’Neil Construction — that was responsible for major structural concrete work across the campus.

The Concrete Collective filed claims exceeding $40 million, alleging it incurred substantial additional costs while working on the Center. The dispute later became entangled with a widely publicized racial racial discrimination lawsuit that brought national attention to diversity, equity and inclusion issues surrounding the project.

McGee alleged the project’s structural engineer unfairly blamed his company for delays and cost overruns and that the criticism contributed to the rejection of Concrete Collective’s compensation claims.

Defendants denied wrongdoing and disputed the allegations, arguing that portions of the concrete work had to be repaired or replaced because of cracking and other deficiencies. The owner of II in One Concrete declined to comment for this story. The case docket reflects that the case remains pending.

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Court records also show that at least two minority-owned subcontractors that worked on the project later sought Chapter 11 bankruptcy protection, according to documents viewed by Fox News Digital. The filings do not establish that the Obama Presidential Center caused those financial difficulties.

Glass Management Services, which supplied glass for the project, filed for Chapter 11 protection in 2024 and later told the bankruptcy court it was preparing litigation related to the Obama Presidential Center that it said could yield millions of dollars in damages. Fox News Digital is not aware that such litigation has been filed and the allegations have not been tested in court. Its owner declined to speak.

Vision Painting & Decorating Services, another subcontractor that worked on the project, also filed for Chapter 11 protection in 2024 while listing the Obama Presidential Center contract in its bankruptcy schedules. Court filings reviewed by Fox News Digital do not state whether the company viewed the project as contributing to its financial difficulties. Fox News Digital was unable to get in touch with its owner.

Another subcontractor owner who worked on the project, told Fox News Digital that the job caused significant financial strain on his company too and he described the experience as a “nightmare” and one of the most difficult projects he had encountered.

He filed a mechanic’s lien for around $145,000, documents show, which was eventually paid to him, but he said his company was still down $200,000 for the project. A mechanic’s lien is a legal tool that companies file when they say they are owed money for construction work they completed.

“Literally, I’ve been doing this for 35 years, and it was the worst-run job I’ve ever been on,” the subcontractor owner said.

He described repeated delays, extensive oversight and what he considered unnecessary construction requirements that forced contractors to spend additional time and money completing work.

“The stuff that they made everybody do was so over-the-top ridiculous,” the owner said.

That view was echoed by Owen, who said his company was forced to redo portions of the Center’s stormwater system at a cost of nearly $900,000, expenses he believes should have been reimbursed. Owen said the work was unnecessary and pointed to correspondence reviewed by Fox News Digital in which Chicago’s chief plumbing inspector later wrote that Adamson’s original method complied with city code requirements.

Owen also provided records showing his firm submitted more than 100 change-order requests — requests for additional compensation for work performed beyond the original scope of the project — during construction. He said the unusually high number reflected constant revisions, rework and delays.

Owen said the company has been trying to recover money it says it is owed from parties involved and has not filed a lawsuit. Fox News Digital reviewed correspondence showing that Adamson’s attorney wrote to project representatives regarding the dispute.

Meanwhile, two additional companies filed mechanics’ liens for around $400,000 and $75,000 respectively. Fox News Digital was unable to contact company officials and it is not known if the liens have been paid.

Promise vs. reality

The concerns are particularly notable because the Obama Presidential Center was built around one of the most ambitious efforts to increase participation by minority-owned businesses and workers from historically underserved communities.

The Obama Foundation committed to awarding 50% of subcontracting packages to diverse vendors — nearly double Chicago’s goals for minority- and women-owned businesses — while requiring 35% of workforce hours to come from targeted South and West Side communities. Foundation officials said the effort was intended to serve as a model for future development projects and help create a pipeline of workers and contractors for projects across Chicago.

The Obama Foundation estimated the Center would generate as many as 5,000 direct, indirect and induced jobs during and after construction.

To deliver the project, the foundation hired Lakeside Alliance — a consortium led by Turner Construction and four Black-owned firms: UJAMAA Construction, Powers & Sons Construction, Brown & Momen and Safeway Construction. The partnership was frequently highlighted by the Foundation as evidence of the project’s commitment to minority-owned businesses and local economic opportunity.

Beneath that alliance sat dozens of subcontractors responsible for carrying out the actual work, from plumbing and HVAC systems to painting, insulation, glass installation and concrete construction. Many of the complaints reviewed by Fox News Digital came from firms operating at that subcontractor level.

The foundation said many subcontractors used the project to grow their businesses and noted that it implemented accelerated payment schedules, advance payments and a 15-day payment cycle to help support smaller firms. The foundation also said it worked with Lakeside Alliance to identify subcontractors in need of financial assistance and, when appropriate, provide additional support.

A landmark project

Whatever the outcome of those disputes, the center itself is nearing completion and preparing to open its doors to the public.

For many Chicago residents, the project remains a source of pride and a long-awaited investment in the city’s South Side. For some of the subcontractors who helped build it, however, the approaching opening date represents a shrinking window to resolve payment disputes they say have lingered for years.

The subcontractor tension was largely absent from the excitement surrounding the center over a recent weekend, when local residents touring the campus told Fox News Digital they were impressed by the sprawling development and its 220-foot-tall granite-clad museum tower.

Many posed with a statue of the former president and first lady and stopped to read slogans displayed on the perimeter fence, including “Bring Change Home” and “A Home For Action.” Several described the project as a fitting tribute to Obama, who first rose to prominence as a community organizer before becoming the nation’s first Black president.

The center sits in historic Jackson Park, one of Chicago’s most iconic public parks. The Obama Foundation secured the site through a 99-year lease with the city for a one-time fee of just $10.

Once open, the campus will serve as the headquarters of the Obama Foundation and host leadership programs, community initiatives and public events.

It will feature a branch of the Chicago Public Library, a digitized presidential library — though it will not be a traditional presidential library with physical papers — an auditorium, an indoor sports facility, a playground and expansive green outdoor spaces.

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Despite the financial losses, Owen said he still takes pride in the finished product.

“I’ve heard the criticisms of the design out here and maybe from an outsider’s perspective, it might not be your cup of tea, but I can tell you the interior of this presidential center is quite beautiful and it’s something to be proud of,” Owen said.

“And we are still proud to have been part of this job. We just wish it would have gone a different way financially.”