Harold Washington Cultural Center under audit by city

If an audit of the Harold Washington Cultural Center by the city’s budget department does not pass the test, the center’s managing organization may have to repay a federal loan it received, risk losing ownership to the city or face foreclosure.

If an audit of the Harold Washington Cultural Center by the city’s budget department does not pass the test, the center’s managing organization may have to repay a federal loan it received, risk losing ownership to the city or face foreclosure.

The HWCC sits on the southeast corner of 47th Street and King Drive and is managed by Tobacco Road Inc. It opened Aug. 17, 2004 and Jimalita Tillman, one of former Ald. Dorothy Tillman’s (3rd) three daughters, is the executive director of the non-profit organization.

The cultural center, named after the late Mayor Harold Washington, is a $19.5 million, 40,000-squarefoot building that boasts a broadcast and digital media resource center, and radio facilities.

The city invested $6.8 million in general obligation bond funding and has overseen $1 million in federal empowerment zone grant funding to build the HWCC, said a spokesperson for the city’s Office of Budget Management.

The empowerment grant, to be used for neighborhood revitalization, is the subject of the audit. While the grant expired four years ago, TRI is obligated to make the financial records available until the end of 2009, said Wendy Abrams, spokesperson for the department.

The city chose to wait until the cultural center had two full years of operation and programming prior to beginning an audit of its fiscal and program management, said Abrams.

Tobacco Road’s financial reports obtained by the Defender show that the organization struggled financially in its first year.

Between its opening day and June 30, 2005 — TRI’s first year of operation — the organization’s federal tax returns for that year show revenues of $678,688. Its expenses totaled over $1.2 million.

That shortfall forced the organization to refinance one of its three mortgages to raise an additional $881,958 for operating and construction costs.

Fiscal records for its second year were unavailable.

The city informed TRI last September that it was subject to an internal audit, a standard practice because of the city’s reporting requirements to the Department of Housing and Urban Development and the Department of Health and Human Services, two federal agencies, regarding the $1 million federal grant.

“The audit will evaluate whether Tobacco Road Inc. is meeting the terms of their redevelopment, mortgage and funding agreements, and any other legal obligations,” Abrams told the Defender.

It’s been nearly a year, and the budget department has not received all of the required documentation from the organization.

“While the city has received some documentation from TRI, we are currently working with the organization to determine when it can proceed with the next steps in the audit,” said Abrams.

The next step would be a site visit to the cultural center to review records and interview personnel to see if the terms of the grant have been met, Abrams said.

HWCC’s executive director said she welcomes the audit.

“Tobacco Road Incorporated, a 501 (c)-3 non-profit organization, finances and programs have been audited by every governmental agency who has ever provided funding for the Harold Washington Cultural Center. Every audit has found that TRI was in compliance with its grant agreements. Each audit found that TRI had spent its funds and administered its programs properly and effectively. The planning and construction of the center was monitored by the City Department of Planning and the City Empowerment Zone, as well as by our lender.

“Not a penny could be spent without multiple layers of review, which without exception, found the center to be in compliance with every one of the City’s rules. We gladly welcome yet another audit, and, as in the past, will answer all of the City’s questions. The Harold Washington Cultural Center is a privately owned and operated educational institute that is governed by a board of directors comprised of community representatives, business persons and artists,” Jimalita Tillman said in a statement.

To stay in line with the grant’s requirements, the HWCC must hold a minimum of three educational or cultural activities for schools each quarter and at least 126 activities, events or performances each year.

During the academic year, school buses are lined up in front of the building waiting for students who visited the cultural center to view plays or participate in other education- related events.

The weekly half-hour local educational quiz show "Know Your Heritage" is taped at the HWCC and many Chicago Public Schools graduations are held there.

“We hope to have the audit completed this summer,” Abrams said.

“In the event TRI is not meeting any of those terms, just as with similar agreements, the city could have the ability to seek recourse, including, but not limited to, repayment of grant funds, foreclosure and/or ownership of the property,” she added.

Kathy Chaney can be reached at kchaney@chicagodefender.com.

Photo by Worsom Robinson/Chicago Defender

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