Brilliant use of taxpayer funds

McCormick Place hospital’s cost to taxpayers? $1.7 million per patient. How the deal happened.

Mayor Lori Lightfoot’s aides defend her push for little-used coronavirus hospital built by Walsh Construction as important ‘insurance policy’ at a time of ‘immense emergency.’

This deal stinks so bad that the Feds need to take a look at it. They should probably take a look at campaign donations and text messages. 

By Tim Novak and Robert Herguth Aug 14, 2020, 5:30am CDT
(From left) Mayor Lori Lightfoot, Gov. J.B. Pritzker and U.S. Sen. Tammy Duckworth, D-Illinois, touring the $65.9 million emergency coronavirus hospital at McCormick Place on April 17 — the day Pritzker announced the first five patients had been transferred there. Only 33 more would follow. Tyler LaRiviere / Sun-Times

Taxpayers spent nearly $66 million fashioning McCormick Place into an emergency coronavirus hospital with 2,750 beds this past spring amid fears that COVID-19 patients would overwhelm hospitals in the Chicago area.

Those fears turned out to be unfounded. Just 38 patients were transferred to the sprawling convention
center — meaning taxpayers’ cost for the makeshift hospital turned out to be more than $1.7 million per patient, on average.

But top aides to Mayor Lori Lightfoot say her decision to initiate the project with the federal government and the Metropolitan Pier and Exposition Authority was an important “insurance policy” at a time of “immense emergency.”

“It’s something I’m incredibly proud of,” says Samir Mayekar, Lightfoot’s deputy mayor for economic and neighborhood development who says the money was “not spent in vain.”

He also notes that the medical equipment is being stored and can be redeployed if needed.

To complete the McCormick Place project, the authority — a city-state governmental body known as McPier that runs the convention center and owns Navy Pier — tapped Walsh Construction, a politically connected Chicago company that’s built everything from highways to high-rises.

That followed a selection process so frenzied that McPier hired Walsh just hours after receiving proposals from three construction companies, according to interviews and records obtained by the Chicago Sun-Times that show:

McPier solicited proposals from three giants in construction: Walsh, Pepper Construction and Power Construction Company. And it hired Walsh even though Power said it either would forgo any fees or donate them to pandemic relief because it didn’t want to profit from the pandemic. Walsh charged $65.9 million, including more than $5.1 million in fees, records show.

An official with the U.S. Army Corps of Engineers — which hired McPier to build the facility, for which the federal government is covering at least 75 percent of the costs — said in internal emails that Power or Pepper was the best choice. But that decision was left to McPier, which picked Walsh, saying its rates were not “significantly different” than the others and that it “had the most experience . . . working with the [Army Corps] and working on emergency projects.”

Marilyn Gardner, chief executive officer of Navy Pier Inc. Brian Jackson / Sun-Times file
A day before the selection, Marilyn Kelly Gardner, the chief executive officer of Navy Pier Inc. — the private company overseeing the tourist attraction that’s run by political allies of former Mayor Richard M. Daley — emailed Larita Clark, McPier’s chief executive officer, to put in a word for Walsh. Under Daley, whose daughter is a Navy Pier Inc. board member, Walsh got huge city contracts, and members of the Walsh family gave heavily to campaign funds associated with Daley.

Besides McPier’s contract with Walsh to put together the coronavirus hospital at McCormick Place, City Hall gave three contracts for medical supplies and medications for the hospital to a company called Vizient that has billed the city $1.3 million.


RELATED
Who’s getting millions from Chicago City Hall for massive temporary health, shelter system
$2.5M in coronavirus stimulus to Navy Pier Inc., clout-heavy nonprofit run by $500K exec

Those involved in creating the McCormick Place hospital say this was an incredibly unusual situation and that officials acted rapidly to try to fend off disaster.

At the time, New York City hospitals were filling, and there were fears that, if Chicago didn’t act quickly, it would “have looked like New York or worse,” says Dr. Nick Turkal, who was executive director of what was formally called the alternate care facility at McCormick Place — one of four in the Chicago region intended to house noncritical coronavirus patients in an effort to keep beds available in hospitals for people more severely ill with the virus.

Officials settled on McCormick Place as one of the four sites in part because it was empty given that the trade shows and conventions it normally hosts have been canceled because of the pandemic.

The other three facilities were in Blue Island, Melrose Park and Elgin in previously closed hospitals, where the costs of readying them for patients were considerably lower than at McCormick Place — a total of about $50 million for all three, records show.

The Army Corps itself chose the construction companies for the renovations required at the closed hospitals — none of which has treated even one patient.

If the virus ends up raging back, the Blue Island site — the former MetroSouth Medical Center — will be ready, officials say, with the others less likely to come back on line.Finished medical rooms at McCormick Place’s emergency coronavirus hospital as it was opening in April. Tyler LaRiviere / Sun-Times

Walsh’s contract involved building mobile hospital rooms and acquiring or assembling beds, showers, sinks, nursing stations and pharmacies — jobs for which it enlisted a host of suppliers and subcontractors. Company officials didn’t return calls seeking comment about its selection or how much of the money ended up going toward its bottom line.

Pepper officials wouldn’t comment. Robert Gallo, Power’s executive vice president, says he thought the selection process was fair.

Based on records and interviews, here’s how that process evolved from a first contact on a Sunday to the $66 million deal by early the following Sunday:
On March 22, a Sunday, David Bucaro of the Army Corps emailed Maurice Classen, Lightfoot’s chief of staff, about doing a survey of McCormick Place. The following day, those talks continued, now also including Lightfoot aide Mayekar and McPier’s Clark.
Samir Mayekar. Provided
That Tuesday, Mayekar emailed city officials and Clark about Gov. J.B. Pritzker’s letter to the Federal Emergency Management Agency, seeking money to reopen the three hospitals and set up a facility at McCormick Place. Mayekar wrote that the Army Corps “had called us to recommend we nudge the Gov’s team.”
That Friday, Philip Stavrides of the Army Corp’s Chicago office emailed McPier officials a list of a dozen contractors, saying his top two choices were Power and Pepper. Walsh was fourth on his list.
That Saturday, the Army Corps signed a contract for construction of the temporary hospital with McPier officials to then subcontract the work to a construction company. McPier contacted Power, Pepper and Walsh, asking for proposals by 8 a.m. the next day.

“I will be sending out the [request for proposal] today — can you let me know realistically when you’d be able to turn around a response? We might need something as early as tonight/tomorrow morning,” McPier’s procurement director Dao Ngo emailed Pepper Construction at 11:16 a.m. that Saturday.
Hours later, Sean Walsh of Walsh Construction emailed Gardner, asking the Navy Pier Inc. boss for “any help you can give me in navigating the players.” Gardner forwarded the email to Clark.
Shortly after midnight, Power emailed its proposal to Ngo. Pepper and Walsh submitted their proposals shortly before the 8 a.m. Sunday deadline. Walsh’s plan noted that its team included Eric Green, a retired Air Force lieutenant colonel who has worked with the Army Corps on construction projects around the world.
Within hours, Walsh was chosen to build the temporary hospital, similar to one built in New York City at the Javits convention center.
Larita Clark, chief executive officer of the Metropolitan Pier and Exposition Authority. Provided

“MPEA staff reviewed the proposals,” says Clark, whose agency has been reimbursed nearly $700,000 by the Army Corps for its staff time and other costs related to the project. “Walsh was selected as the most qualified firm. There wasn’t a dollar amount involved. We looked at the fact that they had the construction management team.

“The MPEA board ratified the decision after it was made. I personally signed the document.”

Even before construction was finished, the McCormick Place hospital opened in mid-April, with Pritzker announcing April 17 that it had its first five patients.

One week later, the Army Corps reported construction was done.

On May 8, Clark announced that the last patient had been released and that the temporary facility was being dismantled.A patient room at the McCormick Place emergency coronavirus hospital when it opened in April. Tyler LaRiviere / Sun-Times