NBC 5 Investigates

Recent lawsuit sheds light on how Chicago migrant funds are being spent

City’s migrant spending website lacks details of all transactions related to more than $400 million in expenditures. NBC 5 Investigates pressed Mayor Brandon Johnson about this following recent city council meeting

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The latest figures from the City of Chicago’s spending dashboard shows the city has spent more than $400 million over the past two years on migrants – with the bulk of that money going to private companies that helped forge lease agreements or provided staffing for migrants shelters.

Since August of 2022, more than 42,000 migrants have made their way to Chicago.

The lion’s share of the money – nearly $253 million – has gone to one private company, Kansas-based Favorite Healthcare Staffing, which staffs the city-run migrant shelters.

More than $76 million - $30 million of which came directly from Chicago tax dollars - has gone to Louisville, Ky.-based Equitable Social Solutions, according to the city’s cost dashboard.

According to the city, Equitable partnered with another company called, Reloshare, which worked to identify and craft lease agreements with the property owners of the buildings that eventually became migrant shelters.

When NBC 5 Investigates asked months ago for copies of the lease agreements through a Freedom of Information Act request, we were provided just 9 out of 27 lease agreements.

“That’s where a number of these leases are,” Brandie Knazze, the city’s commissioner for the Department of Family and Support Services, told NBC 5 Investigates back in March.

The majority of the agreements, the city officials said, belonged to partnerships forged by Equitable and Reloshare, which city records show Reloshare billed Equitable for its work.

But the city’s website lacks those specific details.

Nowhere on the city’s cost dashboard for migrant spending can you find anything referencing Reloshare or the names of property owners who hold lease agreements related to migrant shelters. The lease agreements themselves are not posted.

Were it not for a recent lawsuit filed in Cook County Circuit Court, the public would have no idea where those public dollars have flowed.

The recent lawsuit – filed in May and first reported by Crain’s Chicago Business – involves a lending agency, KHRE SMA Funding, LLC and two West Loop property owners – A.G. Hollis and Scott Goodman.

The lawsuit, filed by KHRE, alleges that Goodman and Hollis failed to disclose on their loan agreement that their West Loop building on Ogden Ave. was going to be used to house migrants.

Neither Goodman nor Hollis have returned emails from NBC 5 Investigates seeking comment. Their attorneys have also not responded to our attempts to reach them. The court records show they are seeking to have the lawsuit dismissed.

In their motion to dismiss the case, the attorneys for the developers acknowledge that  “…the City agreed to pay Ogden rent of $150,000 per month to house up to 650 migrants at the property. This arrangement seemed like a win-win for Ogden—it turned an otherwise non-performing asset into a performing asset and it helped assist the City of Chicago to alleviate the horrendous shortage of migrant housing in Chicago…”

The lease agreement attached to the lawsuit also states that the two could earn additional payments of up to $400,000 if the number of migrants inside the Ogden shelter exceeded 650.

The latest figures from the city show more than 700 people still live here.

NBC 5 Investigates attempted to ask Mayor Johnson about these new spending revelations following last week’s city council meeting.

When asked if he would be open to providing additional details on the city’s spending website, he said:

“We have given an accurate account of how those dollars have been spent,” Mayor Johnson said.

When pressed that was not the case by NBC 5 Investigative Reporter Bennett Haeberle, Johnson said: “There’s no information that has been kept from you.”

Johnson then re-iterated talking points he’s made before about how he’s re-negotiated contracts with Favorite to save taxpayers millions and that Congress has failed to provide additional financial relief to cities like Chicago.  He also doubled down – incorrectly stating that all spending information is available:

Mayor Johnson: “All that information is available to you sir.”

When pressed once again about the fact that the cost dashboard website still lacks that level of detail, he said: “All of information related to this mission is available.”

Reloshare declined to comment for this story – referring questions back to the mayor’s office. More than 6,000 people still live in the Ogden shelter, according to the city.

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