Sept. 21 (Bloomberg) -- In the heart of Chicago’s Loop, the John C. Kluczynski Federal Building served as President-elect Barack Obama’s transition office. Today his former White House- in-waiting is testament to the slow pace of the $787 billion stimulus plan.

The skyscraper’s status as a Ludwig Mies van der Rohe building in the president’s adopted hometown hasn’t moved it to the head of the line. Seven months after the stimulus package was passed, little of the more than $100 million designated to renovate the 43-story structure has been spent.

“That’s too long -- the economy is hurting now,” said Karen Barnes, 46, who was laid off this month as a health-care auditor and was helping set up the Berghoff Oktoberfest in the Kluczynski plaza for $10 an hour. “People need jobs.”

The building, completed in 1975 and managed by the General Services Administration, is significant in a city renowned for architecture because it’s a prime example of Mies van der Rohe’s mid-century modernist style. While the tower has amenities such as rapid elevators and motion sensors for restroom lighting, the renovation will boost its efficiency.

“The idea is to upgrade the stock of buildings in our inventory to better energy performance,” said David Wilkinson, a spokesman for the agency.

The GSA has awarded $10.7 million for design work and construction management services on the building, the agency said in an e-mailed statement. Wilkinson said he doesn’t know when the renovation and the jobs that go with the rest of the $102.8 million project will start.

Slow Going

“We are very conscious of the fact that things are not moving as quickly as people would like them to,” said Wilkinson, whose office is in the building. Even after contracts are awarded, hiring will take time because workers must go through background checks, he said.

Such delays in spending stimulus funds are resonating at union halls around Chicago.

“We’ve got up to 30 percent of our members unemployed in some of our locals,” said Tom Villanova, president of the Chicago & Cook County Building & Construction Trades Council. “This is the worst it has ever been. We wish it could be sped up with money on the street.”

Across the country, only transportation projects have lived up to the stimulus package’s promise, said Stephen Sandherr, chief executive officer of the Associated General Contractors of America, a trade association based in Arlington, Virginia.

“The expectation was that these projects were going to hit the ground in short order,” Sandherr said. “For various, sundry reasons, they haven’t.”

Three-Month Delay

Michael Welch, president of BRB Contractors Inc. in Topeka, Kansas, said his company was delayed about three months on upgrades to a wastewater treatment plant that was converted to a stimulus project.

“We are sitting out here in mid-America and waiting for projects and laying people off,” he said. “It’s just business as usual with the federal agencies.”

The Kluczynski building was chosen to receive stimulus funds because it met two primary goals: It could put money “back into the economy quickly” and could become a “high- performance green building,” the GSA said in an e-mailed statement.

“We are very grateful to the GSA that it recognizes it as having historic value,” said Jason Neises, vice president of tour operations for the Chicago Architecture Foundation. “In Chicago, you don’t mess with Mies. He’s just like Daniel Burnham and Frank Lloyd Wright.”

Man of Steel

Mies is acknowledged as one of the 20th century’s greatest architects. Born in Germany, he came to Chicago in 1938 and left his mark on the city with an unmistakable style that made the glass and structural steel of his buildings the chief element of design.

Obama, who was born in Hawaii and arrived in Chicago in 1985 to work as a community organizer, had his presidential transition office housed on the 38th floor of the sleek, black Kluczynski building at 230 S. Dearborn Street. He gave a 2002 speech from the plaza outside opposing an invasion of Iraq, and as a senator he had a district office there. The building remains home to an office for Senator Dick Durbin, the chamber’s No. 2 Democrat.

The remodeling will generate 480 to 872 jobs, according to estimates provided by Recovery.org, a Web site run by Seattle- based Onvia Inc. that tracks federal spending. The work includes the adjacent Loop Post Office.

Biden Touts Progress

Vice President Joe Biden on Sept. 9 announced that the administration had sped up distribution of stimulus money, in response to criticism of the pace of outlays.

The next day, the White House Council of Economic Advisers said the program had created or saved as many as 1.1 million jobs since its implementation and added 2.3 percentage points to gross domestic product in the second quarter.

Administration officials say the stimulus law was designed to be a two-year program and will lay the foundation for long- term economic growth.

“With tens of thousands of projects approved and more than $300 billion in recovery funds already being put to work, the Recovery Act is being implemented at a record pace,” said Amy Brundage, a White House spokeswoman.

About $94 billion, or 16 percent, of the total stimulus money had been spent as of Sept. 14, according to ProPublica, an independent, non-profit investigative journalism project based in New York. Those estimates do not include more than $200 billion in tax cuts that also were part of the bill.

Top Chicago Projects

The Kluczynski renovation is the fifth-largest stimulus project announced for Illinois, according to Recovery.org. It’s one of three major modernization projects the GSA has on tap in Chicago using stimulus dollars. The budget for the other two totals $53 million.

Sandherr, of the general contractors association, said stories of delayed stimulus projects can be found across the nation. Still, he praised the program.

“I would hate to see what our industry would look like right now without that money,” he said.

To contact the reporter on this story: John McCormick in Chicago at jmccormick16@bloomberg.net.

Last Updated: September 21, 2009 00:01 EDT