News broke today that a loophole in a federal program intended to create jobs and revitalize poor areas has been allowing companies like Goldman Sachs Group Inc., U.S. Bancorp, JPMorgan Chase and Prudential to claim subsidies for big projects, costing taxpayers over 10.1 billion dollars, according to David Dietz with Bloomberg Markets Magazine. Signed into law by Bill Clinton in 2000, the New Markets program gives firms a tax credit of 39 cents to the dollar, available only to projects in areas ("census tracks") that have a a 20 percent rate of poverty or a "population earning 20 percent less than the median family income of the surrounding metropolitan area," according the 2000 census, says Dietz. Unfortunately, Dietz writes that the system has proved susceptible to gaming, as the "program's standards open up some of the nation's wealthiest areas to development....Taxpayers have subsidized projects in tracts with median family incomes as high as $200,000, records show."
What projects, exactly? Dietz focuses on the two-year renovation of the Blackstone hotel in downtown Chicago, an opulent Beaux Arts building that has seen its fair of high times since it was built in 1910. Apparently the project was subsidized by the program, with Prudential Financial Inc. receiving over "$15.6 million in tax credits," for its help funding the project. Since we're technically investors, as taxpayers, in this beauty, we decided to check it out. Here are some of the features of the opulent Blackstone you and we are paying for. Don't expect a free night's stay.
- Glamorous Guests "The Blackstone Renaissance, a downtown Chicago luxury hotel....has been a favorite of movie stars, sports legends, royalty and presidents since 1910," says the hotel's homepage. Since 1910! Clearly the type of low-income project that the federal program's creators had in mind.
- Old Mansion "Designed by renowned architects Marshall and Fox in 1908, the hotel stands on the original mansion grounds of Mr. Timothy Blackstone, president of the Chicago and Alton Railroad," says the first frame in the hotel's official slideshow. An original mansion in a poverty-stricken part of town, we promise!
- The Original Smoke-Filled Room, Folks, says the hotel. "For a unique experience, stay in this historic one-of-a-kind suite, the site of Warren G. Harding's 1920 Republian nomination for Presidency. Restored and refurbished to its original elegance, our Vice Presidential Suite is accommodating for the most elite of guests. The term smoke-filled room has become part of political lexicon in the United States." Yes, the room that inspired almost a century's worth of metaphors to describe underhanded political dealing could be yours, smoke and shady brokering not included.
- 'Breakfast Is on Us at Renaissance Blackstone Chicago Hotel,' says one of the hotel's specials. Yes, breakfast is on....it's on all of us.
- Gangster-Themed Packages: So Many Decisions! It's "Good to Be a Gangster" is another one of the many fabulous packages offered by the hotel. "Legend has it that at the Renaissance Blackstone Chicago Hotel in 1931, Charles Lucky Luciano gathered a group of gangsters for the first ever Crime Convention to splitup power among mob bosses," the website says. The beginning of a proud legacy of swindling that continues to this day!
- Party Spaces Don't forget about the, "11,000 square feet of lavishly preserved event space carry on the tradition of opulent affairs, at our Chicago luxury hotel." Perfect for all of your lavishly opulent luxury rich-people parties.
- The Pride and Joy of Chicago! "The who's who of Chicago's elite held special events in this historic ballroom since 1910," the website says. Luckily, knowing Chicago, allegations of tax-payer fraud probably won't have these folks rolling over in their graves.
- What Windows! "Truly an architectural gem, the historic English Room features 17th century walnut paneling, slate and Colorado white stone flooring, a beautifully carved ceiling, original stained-glass windows from 1910." The walls feature original leather from the soles of American worker's shoes, as well.
- Historic! "President Nixon used the facilities for press conferences and official entertaining....The notorious Al Capone was often a customer in the hotel barbershop," chirps Carly Zinderman on Justluxe.com. "The movie The Untouchables played up the famous gangster's connection to the historic hotel by filming the banquet scene where Al Capone gets violent towards a guest with a baseball bat." You too could be the next Nixon or Capone if you stay at the hotel, and have your chance to get violent towards a guest as well.
- Shoeshine Services are one of the many services offered by the hotel--they get scuffed when you're walking on the backs of others.