Dec 18, 2023 - News

City still using costly Kansas staffing firm for migrant shelters

hotel

The Super 8 in Rogers Park is one of more than a dozen migrant shelters run by an out-of-town firm. Photo: Monica Eng/Axios

Despite promises to hire local companies to staff and cater Chicago's migrant shelters by the first week in December, the city is still paying Kansas-based Favorite Healthcare to run all 27 of them.

Why it matters: Favorite and its parent company, the U.K.-based Acacium Group, have faced criticism here and abroad for charging taxpayers what some Chicago alders have described as "exorbitant" fees.

What's happening: The city is still operating under a controversial contract that it quietly reupped in October, and a number of officials are becoming impatient that more hasn't been done by now.

  • "We want to be able to hire from the communities in the city so the investment is going back into Chicago just as the mayor has wanted to do," immigration committee chair Ald. Andre Vasquez tells Axios. "So it's crucial that we wean ourselves off of Favorite."

Catch up quick: Under the city's initial $57 million deal with Favorite, signed in 2022 by then-Mayor Lori Lightfoot, housing and travel costs for Favorite's non-local staff drove some of the high rates, officials have said.

Zoom in: The most recent invoices the city shared with Axios show Favorite billing Chicago $50 per hour for trash runners and $180 an hour for site managers.

  • To staff Chicago Lake Shore Hotel with 18 workers for a single day in September, Favorite charged the city $22,832.

The city has since negotiated pay rates down slightly (to $40-$156/hour) and pushed Favorite to hire more locals.

  • As of last week, about 24.5% of the shelter staffers were Chicagoans, city officials tell Axios.

What they're saying: Vasquez wants more transparency from the company.

  • "We want accountability," the alder tells Axios. "We want to know how much the company is keeping versus giving the worker, who they're hiring, how they're hiring and who gets promoted, especially if we're putting this many dollars in."

The other side: Favorite's communications consultant Joanna Klonsky, a former top adviser to Lightfoot, tells Axios that Favorite is contractually forbidden from commenting on its city work.

  • Asked how much Favorite typically keeps from the hourly wages it charges clients, Klonsky did not respond.

What's next: Axios asked Mayor Brandon Johnson last week when his administration would announce local vendors to replace Favorite. His answer: "soon."

The big picture: The city is facing scrutiny for other migrant-related contracts with private companies.

This month Block Club reported that Chicago is paying influential developers and city contractors high rents to host migrant shelters in West Loop buildings.

avatar

Get more local stories in your inbox with Axios Chicago.

🌱

Support local journalism by becoming a member.

Learn more

More Chicago stories

No stories could be found

Chicagopostcard

Get a free daily digest of the most important news in your backyard with Axios Chicago.

🌱

Support local journalism by becoming a member.

Learn more