Fewkes Tower was built by the CTU in 1963-64 with the idea of providing affordable housing and services for retired teachers. Ownership of Fewkes Tower was placed with the Chicago Teachers Union Tower Corporation, created in 1965 as a §501(c)(2) not-for-profit organization. The property was operated as a not-for-profit with the idea that profits eventually would be transferred to a foundation. None of the income from the property or profits was paid to the CTU. The union created CTU Foundation Inc. in 1969 as a §501 (c)(4) public charity for the purpose of helping to pay medical costs of retired and disabled teachers and for other charitable purposes related to children of teachers and needy Chicago Public School students. Profits from Fewkes Tower were eventually to be paid to the Foundation.
The Tower Corp. had obtained a mortgage from HUD, which required the Tower Corp. to provide affordable housing to retirees but also required the Tower Corp. to retain all income for payment of the mortgage, and not to pay any net profits to any charitable foundation until the mortgage was paid off. It was paid off in 2003.
Possibly because of the location of Fewkes Tower, from the beginning and for the next 40 years, very few retired teachers chose to move to Fewkes Tower. Those who did were provided with a 20% rent subsidy. As of 2014, only seven of the 224 apartments in Fewkes Tower were occupied by retired CPS teachers.
In reviewing the use of this asset created by the CTU, the officers of the union, who also served as directors of the Tower Corp. and Foundation, determined that the original purposes of the Fewkes Tower project were not being served and that the assets represented by the building could better be used for broader charitable and educational purposes. Ownership and assets of the Tower Corporation were transferred to the Foundation in 2014. Fewkes Tower was put up for sale and marketed by a real estate firm to approximately 10 responsible buyers. Proposals were reviewed from the three highest bidders, none of whom had any connection with the union’s officers or members, and the building was sold to the highest bidder. All of the proceeds of the sale were deposited with the Foundation.
The Foundation received $8.1 million from the Tower Corp. in FY 2014 and, in its first activities in making charitable donations, granted approximately $1,014,000 to 22 charitable and educational organizations in amounts ranging from $30,000 to $100,000, the latter to a scholarship program offered to Chicago public school students. The Foundation is supporting the Infinite Scholars Program which has provided some $19 million in scholarships to CPS students over the past two years. Scholarship fairs were conducted at 11 CPS high schools last year. The Foundation is also providing support for teacher certification programs and vision care programs for Chicago public school students. The Foundation also will be providing the 20% rent subsidy to the seven retired teachers still living in Fewkes Tower for as long as they continue to make that their principal residence.
Teachers union selling Gold Coast apartment tower (Crain’s Chicago Business)