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Who’s getting millions from Chicago City Hall for massive temporary health, shelter system

Faced with coronavirus emergency, city has budgeted $65 million for emergency deals for a McCormick Place field hospital, homeless shelters, masks, gowns, COVID-19 tests.

Mayor Lori Lightfoot tours one of the patient rooms at the COVID-19 field hospital at McCormick Place on Friday.
Mayor Lori Lightfoot tours one of the patient rooms at the COVID-19 field hospital at McCormick Place on Friday.
Tyler LaRiviere / Sun-Times

Dr. Martin Lucenti once practiced in the emergency room at Northwestern Memorial Hospital, and he has treated soldiers at combat hospitals in Iraq and Afghanistan.

Now, he’s the medical director of Vizient, one of dozens of contractors the city of Chicago is turning to for help in dealing with the coronavirus pandemic. Vizient just landed a city contract for up to $2.5 million to help operate the field hospital at McCormick Place, which began accepting patients Tuesday.

“Basically, we stood up a health care system under the city in very short order with licensure and DEA and all of those things,” Lucenti said. “You can imagine a city trying to get in the business of trying to procure medical equipment and drugs and so forth. There’s just no expertise.”

Dr. Martin Lucenti, medical director of Vizient.
Dr. Martin Lucenti, medical director of Vizient.
Provided

So far, $65 million has been budgeted for the city’s emergency response; $5.6 million has been spent, according to the mayor’s office.

The city’s emergency vendors include a suburban mirror company making masks and a doctor who worked for the Chicago Blackhawks and is supplying coronavirus test kits.

The city’s emergency contracts fall into three categories: support for the hospital at McCormick Place, which could treat up to 3,000 coronavirus patients; personal protective equipment and medical supplies; and shelter and transportation for people affected by the pandemic.

A mayoral spokesman said the city is using existing, competitively bid contracts when possible. Those contracts include the city’s standard requirements for participation of minority-owned and operated and women-owned and operated businesses.

Under Mayor Lori Lightfoot’s emergency order, her chief procurement officer and her commissioner of assets, information and services can OK contracts for up to $1 million without bids or city council approval.

Despite Lightfoot’s promises of transparency, her office initially wasn’t posting any of those contracts online, though a spokesman said Friday the city is working to do so.

Her office wouldn’t make procurement officials available for an interview. And many vendors contacted by the Sun-Times declined to comment, saying the mayor’s office told them to refer questions to City Hall.

Some companies, like Vizient, are working for cities nationwide.

Molly Ehrlich, senior consulting director of Vizient’s supply chain operations services, at the McCormick Place field hospital.
Molly Ehrlich, senior consulting director of Vizient’s supply chain operations services, at the McCormick Place field hospital.
Vizient

On the phone from the Baltimore Convention Center, where his company was helping set up a field hospital, Lucenti said Vizient is a member-owned company serving more than half of the hospitals in the country, including Northwestern, giving it huge leverage in negotiating prices for supplies and drugs.

“You’re essentially getting the best prices,” he said.

His company also is arranging to get equipment and drugs to McCormick Place.

“You would never have any leverage with the distributors and a wholesale as a health system that stood up and will probably be gone in a couple of months,” he said.

Vizient’s deal is for six weeks with an automatic six-week extension. The city can cancel on a week’s notice.

Officials had hoped to open the McCormick Place hospital the first week of April. It actually took its first patients Tuesday.

The Army Corps of Engineers provided “pieces and parts” for the hospital, which are “very hard to align,” Lucenti said.“So they’re expecting municipalities and states to actually, you know, on the fly, create a logistical infrastructure to supply medical equipment and pharmaceuticals. And so, you know, you’re starting from scratch.”

A nurse’s station at the new field hospital at McCormick Place is flanked by patient rooms.
A nurse’s station at the new field hospital at McCormick Place is flanked by patient rooms.
Tyler LaRiviere / Sun-Times

The city also tapped construction companies and a medical staffing firm for the field hospital.

Construction companies getting city contracts: FH Paschen, for $9.9 million, and Leopardo, for $11.6 million, to buy medical equipment and build locker rooms and stations for health care workers to change into protective gear.

Though city officials wouldn’t be interviewed about the emergency deals, a written statement from the mayor’s office said City Hall “utilized a national pricing book to guarantee market-rate value.”

Others hired include:

  • Walgreens, which will get up to $1 million to fill prescriptions at McCormick Place.
  • Midwest Physician Administrative Services will get up to $60 million for doctors, nurses and other medical staff for the field hospital, but the cost of the current phase — opening one of the halls for patients — is estimated at less than $10 million. The company recruits from suburban hospitals that have seen a decline in business or have canceled elective procedures.
  • Matthew Schipper was hired for up to $977,400 to dispatch and coordinate transportation of patients to and from McCormick Place. His company, Event Medical Solutions, provides emergency medical transportation at Soldier Field and at events like Lollapalooza and Riot Fest.
Stanley Rakestraw, founder and chief operating officer of SCR Medical Transportation.
Stanley Rakestraw, founder and chief operating officer of SCR Medical Transportation.
Sun-Times file
  • SCR Medical Transportation Inc. will get up to $500,000 to provide 12 vans and drivers to shuttle homeless people to and from shelters and do COVID-19 “symptom screening” by drivers at the point of pickup.

Stanley Rakestraw, SCR’s founder and chief operating officer, was appointed to the Metra board by Cook County Board President Toni Preckwinkle, who has gotten more than $15,000 in campaign contributions from him and his wife. Rakestraw resigned from the board in 2013 when he moved from the suburbs to the city.

In 2014, the company settled a lawsuit filed by the family of a woman killed in a crash while being transported by an SCR driver. In 2016, SCR settled another lawsuit, this one accusing it of failing to comply with the city’s Minimum Wage Act.

City officials wouldn’t answer questions about SCR but said the new emergency contractors were selected “only after a thorough vetting.”

Rakestraw couldn’t be reached.

Since the COVID-19 crisis began, the city has distributed more than 2 million pieces of personal protective equipment from the city’s stockpile, vendors and the federal government, which City Hall expects will reimburse most of the emergency expenditures.

A worker at The Howard Elliott Collection creates personal protective equipment.
A worker at The Howard Elliott Collection creates personal protective equipment.
The Howard Elliott Collection

Among the PPE providers is The Howard Elliott Collection, an Addison producer of mirrors, furniture and pillows, hired to provide up to 300,000 emergency face shields and 1 million masks to supplement the city’s supplies at a cost of up to $1,379,000 total. That was through two separate contracts awarded on the same day, each for under the city’s $1 million spending threshold.

According to the mayor’s office, that’s because those items are being made at different factories and delivered on different schedules.

“We have supplies. We have the skills. So why not shift our efforts to making some kind of protection for the people who need it most?” company president Brian Berk says on Howard Elliott’s website.

Berk, who declined an interview request, saying he was told to refer questions to City Hall, refers on the website to “running into the bureaucracy of the government” when he first tried to provide masks to first responders. “Obviously I’m not FDA approved. We’ve tried reaching out to the FDA.”

Dr. Ari Levy.
Dr. Ari Levy.
Sun-Times file
  • Dr. Ari Levy, a former member of the medical team for the Blackhawks, also has an emergency contract with the city for PPE, for as much as $440,000. He’s supplying up to 11,000 COVID-19 rapid test kits that the Department of Public Health will use to “assess high-risk populations,” according to the mayor’s office.

“I’m a doctor here in Chicago, asking how to be helpful in a time of emergency,” Levy said. “Just trying to help the Department of Public Health solve a need. PPE and testing was a need.”

  • The Family Independence Initiative is among organizations hired as “pass-throughs” to provide government assistance to needy people. The city’s Department of Housing provided the group $2 million to provide people with onetime grants to pay their mortgages. The fund is awarding grants of $1,000 each to 2,000 people. Ebony Scott of the Family Independence Initiative said 349 families have gotten the grants so far.
  • Other key contractors include hotels the city is paying to house people who have been exposed to the virus or are mildly ill, including homeless people, or who are first responders and health care providers.

Hotel Julian, Hotel Essex, LondonHouse, Godfrey Hotel and Hotel 166 have agreed to house a combined 1,133 people for rates of $129 to $175 a night. Oxford Capital Group manages Hotel 166 and owns the Julian, Essex, LondonHouse and Godfrey.

Hotel Essex, 800 S. Michigan Ave.
Hotel Essex, 800 S. Michigan Ave.
Tyler LaRiviere / Sun-Times

Oxford Capital Group president and chief executive officer John W. Rutledge referred questions to City Hall but said, “We wanted to do our part to provide a sanctuary.”

Most hotels in Chicago are closed because of the governor’s and mayor’s stay-at-home orders.

  • Other well-known organizations providing shelter include the YMCA and the Salvation Army, whose facilities will house up to 687 homeless people for a combined total of up to $1.9 million for the first month.
  • A Safe Haven, a West Side agency that serves the homeless, agreed to open a 100-bed facility for the homeless for $562,000 a month. Neli Vazquez Rowland, its founder and president, is well connected politically.
Neli Vazquez Rowland, president of A Safe Haven, with President Donald Trump in April 2019.
Neli Vazquez Rowland, president of A Safe Haven, with President Donald Trump in April 2019.
C-SPAN

Last year, the mayor was the official starter at Montrose Beach for the Safe Haven 5k to end homelessness for veterans. At an event in Washington last year, President Donald Trump singled out Vazquez Rowland and her organization for praise. In 2017, she briefly campaigned in an unsuccessful bid for retiring U.S. Rep. Luis Gutierrez’s seat.

She didn’t respond to efforts to reach her.