In recent weeks the Northcenter business community has been roiled by a series of accusations against the Northcenter Chamber of Commerce and its leadership of poor management. Chamber leadership emphatically deny the charges and say that the accuser’s wife, a member of the board, voted to approve the projects.
The accusations, levied by former Chamber president Rob Engel have created turmoil in the tight-knit organization, where many board members live on the same block or have businesses on the same street.
Two weeks ago, Engel published a guest opinion in the Center Square Journal, suggesting the Chamber is using funds for projects outside the community without the Chamber board’s full approval. Specifically, he is concerned about the formation of the Northwest Community Corporation, a separate company created by the Chamber to generate additional revenue by creating and managing Special Service Areas, or SSAs outside of the Northcenter area. The corporation, conceived by current Chamber president Simon Stein and Executive Director Garrett FitzGerald, was unanimously approved by the Chamber board in August 2011, as indicated in meeting minutes provided by the Chamber. Board member Laura Engel, Rob’s wife, made the motion to approve.
Stein calls the Northwest Community Corporation a way to decrease the Chamber’s dependence on its signature event, Ribfest. “If we get three days of rain, we’re screwed,” he says. The Chamber relies heavily on proceeds from Ribfest to fund philanthropic grants and cover the chamber’s annual operating costs.
“We had this conversation every year,” Engel says of the the subject of the Chamber’s reliance on Ribfest. He charges that additional revenue could be raised through other channels, like increasing the number of Ribfest sponsors. “We don’t have to form another company. It shouldn’t exist. I don’t think it’s right for these guys to go and form a private company on the dime of the chamber.”
On February 14, Chamber records show Engel aired his concerns to Chamber board members at their monthly meeting. Among the issues he recounted to CSJ: lack of a five-year plan, risk of NCC’s assets with no assurance of anything other than meager returns, lack of transparency in formation of the corporation, diversion of funds from philanthropy to the new corporation, and subverting of established policies and procedures.
“He was trying to sway people to his direction,” says board member Ben Kennedy.
Following a rebuttal from Stein and Chamber Executive Director Garrett FitzGerald, who will also oversee the new corporation, the majority of board members threw their support behind NCC’s current leaders.
“I felt that the explanations that were given satisfied me,” says Hope Whitfield, who joined the Chamber board in January. “There was no attempt to shelter or hide information.”
With the board backing Stein, Engel then took his allegations public two days later in the form of a opinion piece in CSJ and a widely distributed email message. “What is my motivation? My one motivation and one motivation only is to stop [the new corporation] before it gets ugly,” says Engel.
The irony is that Stein’s efforts to protect the Chamber from one type of storm has resulted in another kind of tempest altogether.
“It’s a puzzler,” he says of Engel’s reaction to the new corporation. The quarrel against managing SSAs seems specious to him, given that the Chamber has been managing SSA 38 (which covers Northcenter and Lincoln Square) for the past five years,” a period that encompasses Engel’s presidency. “We get more money from the SSA than our membership,” says Stein. “We’ve got a unique skill set, we’re effective at managing SSAs.” According to Stein, plans for the corporation include adding two to three new SSAs to its portfolio, with the additional revenue providing the Chamber some welcome financial breathing room.
Board member Kennedy likens the Northwest Community Corporationto a condo management company. A condo board collects association fees from residents for joint expenses and then hands over a portion of that fee to a management company, which handles things like window washing, carpet cleaning and contracting out for repairs on behalf of owners, who would rather spend their time doing anything but window washing, carpet cleaning and contracting out for repairs. Similarly, SSAs collect a special tax from members for things like snow removal and flower planters and then pay someone to manage those services.
“An SSA would have to pay a management fee to anyone who managed it,” explains Stein. So why not the Northcenter Community Corporation, which, he says, was established as separate entity to minimize, not increase, the risk to the Chamber’s assets. “SSAs get sued sometimes,” he notes. Should somebody slip and fall on a sidewalk the SSA was supposed to shovel, the Chamber won’t be on the hook for damages, according to Stein.
“This is not something that was cooked up in a day,” says Maribel Selva, the Chamber’s president-elect, who also chairs the philanthropy committee. “It was reviewed by attorneys and accountants who review plans for nonprofits. I feel confident that it went through the right channels. It’s a proactive effort on the side of the chamber to keep operating.”
That’s a position shared by Ald. Ameya Pawar (47th), who met with Stein and FitzGerald on the heels of Engel’s opinion piece. “In general, all of our chambers should be moving in this direction,” he says, particularly in light of the city’s decreased funds provided to chambers. “It shows leadership to identify ways the Chamber can ensure sustainability long-term.”
While Kennedy doubts that Engel’s allegations are on the radar of the average Joe, defending the corporation has proven a distraction to the Chamber. “It’s pretty much the only thing we’ve been able to talk about for the last two weeks,” says Kennedy, who adds that he’s had to hold off on scheduling meetings for his real estate and beautification committees.
“I just want to get back to focusing on the mission of the Chamber and the events that bring the community together,” Whitfield says.
Engel seems disinclined to allow that to happen. “I will stop at nothing before I see this other company is gone,” he says. “I am not stopping. Mind you, these guys are friends of mine–I put a lot on the line. I’m sure they’re not [friends] anymore.”