$600 million – $500 million = $100 million

Last updated on: May 11, 2015 at 8:19 am by Jane the Actuary

$600 million – $500 million = $100 million 2015-05-11T08:19:21-06:00 Jane the Actuary

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Last week, I lamented that there were two unanswered, indeed unasked questions regarding the Obama library: cost to taxpayers and actual content of the library.

Today, the Tribune says, in an article primarily focused on local businesses concerned they could get pushed out as a consequence of future development, that the Obama library would bring “a projected $600 million in economic development to an impoverished neighborhood that has long been overlooked.”

At the same time, the article says, “Over the next four years or so, the Obama library foundation plans to raise some $500 million in private donations for the library project.”

So, $600 million less $500 million must mean that the operating expectation is that state and local governments will spend, between them, $100 million on the library and related development projects, money which, in case you haven’t noticed, neither the state nor the city of Chicago have.

Now, back in 2014, the Democrats proposed spending $100 million on the Obama library (see here and here for my comments at the time), but I thought this was dropped! I thought that when Rauner was elected, that was the end of this folly. But simple math says this isn’t the case, or, if not, someone, somewhere, worked up some back-of-the-envelope numbers that said, collectively, governments would end up kicking in this $100 million one way or another.

And that $500 million? It’s meant to fund the actual construction of the site (with lots of bells and whistles), plus an endowment to partially cover future operating costs (according to the Trib recently, “Under a 2008 amendment, President Barack Obama will be the first president required to have an endowment representing 60 percent of the cost to build his library.”). But that’s not what local politicians expect:

“We would like the foundation to focus some of its (financial) resources on our schools, our parks, and yes, we want a certain dollar amount focused on youth activities. We want to know how many jobs — directly and indirectly — we can expect to turn back into benefits for surrounding communities,” said Cochran, a longtime community activist before joining the City Council.

Apparently, in the minds of local activists, the Obama library foundation, like other foundations they’re accustomed to working with, will be a grant-making institution funding local community initiatives, not an institution whose funds are already spoken for simply to construct the museum itself.

Update: a little more digging turned up this article from NBC, referencing a study done by the University of Chicago, which predicts twice as many visitors, including lots of out-of-town visitors, to the Obama library as to any other presidential library. And here’s a press release from the University of Chicago touting this projection, though the original report doesn’t appear to be available online.

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