Heartland Alliance, a historic Chicago-based social service organization, has hit a bleak milestone, shuttering its affordable housing division and laying off 65 employees amid severe cash flow challenges. Ed Stellon, the organization's chief external affairs officer, expressed the devastating impact of the layoffs, stating that while they've had to say goodbye to 65 of their colleagues, the organization's aim has been to secure the continuation of their global services over everything else. Stellon's comments were reported by the Chicago Sun-Times.
The decision to shut down came after months of financial strain, which saw the transfer of Heartland's roughly 1,200 affordable housing units in Chicago and elsewhere to receivers as the nonprofit sought potential buyers for the properties. Managing a severe cash flow issue admitted by Stellon, the organization is vigilant to prevent financial trouble from infecting its broad range of other services. Meanwhile, the laid-off workers, mostly administrative and support staff, appear, according to some, to have been left somewhat in the dark as critical decisions about their futures were made by a select few within the organization.
Former employees allege a violation of Illinois' WARN Act, a law mandating 60 days advance notice for layoffs or closures in larger organizations. In late September, Heartland reported 48 temporary layoffs, with an additional 40 furloughs reported in October by the nonprofit's health unit. According to Chicago Sun-Times interviews, the furloughed employees, including individuals like Olivia Moorer and Liz Proscia, found themselves struggling to navigate life without their steady paychecks amidst sudden organizational changes.
Heartland's financial hurdles took a turn for the worse after the COVID-19 pandemic strained resources and limited rent collection options. While efforts to sell the housing division existed, they ultimately didn't go through, and receivership became the last resort. The court approved the city of Chicago's motion to appoint a receiver for Heartland Housing’s 14 affordable housing properties, entrusting them to The Habitat Company. The city cited unpaid bills and building code violations as reasons for the intervention. The effects spilled over, with signs of trouble such as removed security and accumulated garbage visible to residents long before the receivership. Glenda Monet, a resident of one of the affected buildings, voiced frustrations as trash collection and communication systems faltered, leaving tenants feeling neglected and, in some instances, like sitting ducks without adequate security, as reported by Block Club Chicago.
The fallout from Heartland's financial predicament also casts uncertainty over a key redevelopment project in the city’s INVEST South/West program. Despite breaking ground on the transformation of the Laramie State Bank in Austin with hefty city funding, concerns about Heartland Housing's financial status have prompted revisions to the project's partnership structure. Officials from the city's Department of Planning and Development have assured that necessary adjustments are being made to ensure the Laramie Bank project's progression, indicating a resolved development arrangement is on the horizon for a summer City Council introduction.
