Not so long ago, the boarded-up building at 2800 W. Madison St. was one of the most popular restaurants and political hangouts on Chicago’s West Side.

Bill Clinton dropped by Wallace’s Catfish Corner when he was in town. Barack Obama made campaign stops there when he was running for the U.S. Senate and then for president. U.S. Rep. Danny Davis’ office was on the next block, and when aides couldn’t find him, they went looking at Catfish Corner.

Wallace Davis Jr., the former city alderman who owned the restaurant, said he always thought of it as more than a place that served soul food. “It was an anchor in the community,” he said recently.

But for the last several years, it’s been a blight.

The restaurant closed and Davis lost a battle to hold onto the property. In 2017, then-Mayor Rahm Emanuel announced that the city’s newest economic development program would provide a grant to help open a new restaurant in the building. The city agreed to give $250,000 to a former Water Department employee leading the project.

Yet the property remains boarded-up and unused. Instead of sparking a neighborhood revival, 2800 W. Madison has become an illustration of the complications, frustrations and politics of economic development in an area devastated by generations of disinvestment.

Last month, my colleagues Tony Briscoe, Haru Coryne and I reported on how this stretch of Madison Street, running through the heart of the East Garfield Park neighborhood, is now in worse shape than it was after rioting in 1968. Government programs have failed it, private investors have shunned it, and speculators have bought and sold pieces of it with little evident interest in building anything. The result, as in many other Black neighborhoods, is a business district that was neglected until much of it disappeared.

Catfish Corner has such a messy history that it can only be fixed with substantial money and political capital. And Chicago has thousands of other properties like it.

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During busier days on Madison Street, the building had been used as a medical center, with a pharmacy on the first floor and a doctor’s office upstairs. But by the 1990s, the doctor’s office was gone and the first floor was cut up into smaller spaces for a used appliance store and other tenants. The building was on the verge of being torn down.

“The bricks were falling on the sidewalk,” Davis recalled.

Davis was rebuilding his own life at the time. After serving as the area’s alderman from 1983 to 1987, he was convicted of taking a bribe from an FBI informant and served 3½ years in prison. When he returned to the West Side, Davis saw the deteriorating building, which was around the corner from his house, and asked the owner to take better care of it.

“It’s not even worth fixing,” he told Davis.

Davis disagreed. He saw an opportunity. In 1993, after bidding at a public tax sale, Davis acquired the property and started renovations. He installed a live fish tank, put in a takeout window and, within a year, opened Wallace’s Catfish Corner. Later, he added a dining room and removed the second floor after it was damaged in a fire.

The food was good, but the restaurant also seemed to take on Davis’ personality — he appeared to know everyone in the neighborhood and beyond, and always had a story to tell, often about colorful West Side characters or his own exploits in politics. On weekends, when the restaurant was bustling, he hired blues bands to play in the vacant lot next door. Catfish Corner became an established stop for campaigning politicians. Some were also among the regulars who came by every day.

What happened next is complicated. Davis says a Chicago lender, Citizens Bank and Trust, committed fraud by issuing mortgages without his permission on three properties he owned. Bank officials denied the allegations. But in 2010, state officials shut down the bank for unsafe lending practices. The bank chairman was charged with fraud connected with loans on the South Side, but he was acquitted by a jury.

Citizens Bank’s assets were transferred to another institution that proceeded to foreclose on 2800 W. Madison and Davis’ two other commercial buildings. Though the restaurant remained open, control of the property was turned over to a court-appointed receiver. A lawyer and family members came up with plans to help Davis keep his properties, but also warned that he had to get his other finances in order. But Davis fell behind on his taxes, records show, and was charged criminally with failing to pay child support. After pleading guilty, he was sentenced to 30 months probation and ordered to pay nearly $144,000.

In August 2015, the floor caved in — literally. Davis said the receiver had failed to repair the restaurant’s kitchen floor despite signs of damage. When it collapsed, the water and sewer lines ruptured, damaging the sidewalk and street outside. Davis was forced to lock up the restaurant for the last time.

In June 2016, a Cook County judge ordered the property sold, court records show.

Davis still believes his properties were stolen from him. “It’s been a roller coaster ride I wouldn’t wish on my enemies,” he said.

By the next year, all three of Davis’ commercial properties were in the hands of the former city employee.

Pasquale Esposito worked for the city for more than 30 years, retiring in 2009 as a coordinator of public utilities, according to city records.

In 2008, Esposito began buying distressed properties on the West Side, and by 2016 he owned or co-owned at least 10. He acquired three of the parcels through the city’s Large Lots program, which sold city-owned vacant properties for $1 each. To qualify, buyers had to own other property on the same block as the vacant lots, though they weren’t required to live there. The mailing address for Esposito and his company, ESPO Group LLC, is a home in a gated community in Will County, about an hour from East Garfield Park.

Esposito did not respond to a letter I dropped off at his home or one I mailed.

Alderman Walter Burnett Jr. said he met Esposito after he renovated several buildings and became a landlord. Many of the properties were in Burnett’s ward, the 27th, which includes much of East Garfield Park. “He takes care of his buildings,” Burnett said.

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Meanwhile, Mayor Emanuel was struggling in 2016 to rehabilitate his political standing. For more than a year, the city had refused to let the public see a video showing police officer Jason Van Dyke gunning down 17-year-old Laquan McDonald. After a judge ordered it released in the fall of 2015, the video was met with outrage. Emanuel spent months visiting churches, restaurants and community events in what amounted to an apology tour of Black neighborhoods.

Emanuel also started touting a plan to allow denser developments in affluent areas downtown, saying they would generate extra money that could be used to aid businesses in Black and Hispanic communities on the South, Southwest and West sides. He called the pot of money the Neighborhood Opportunity Fund.

The city began accepting applications for grants early the next year. Applicants were invited to propose a rehab project or new venture that could have a “catalytic impact” on the community. Along with details about the scope of the work, they were asked to provide cost estimates. The city grants could cover 50% of the project expenses, and in some cases more. But applicants were advised that they would need to come up with additional funds.

More than 700 applications poured in, including one from Esposito, who was seeking money to open a new restaurant at 2800 W. Madison.

Though he was a white man who lived outside the neighborhood, Esposito noted that he owned rental properties on the West Side. He also wrote that he would team with two “minority” partners: Anton Hilton, a developer who lived in East Garfield Park and would oversee the project, and his brother Dunnigan, who had previously owned a restaurant in suburban Forest Park.

Esposito acknowledged that he didn’t actually own the Catfish Corner building yet, but was in the process of acquiring it.

“California Smoke House will be an illustration of what community values and unity can achieve,” he wrote.

In June 2017, Emanuel announced the project would be one of the first 32 NOF grant recipients. Among the other grant winners were art galleries, a florist, a social service organization planning to build a theater space, and several restaurants, including both neighborhood institutions and proposed startups.

Esposito was slated to get the amount he sought: $250,000.

Under program rules, the grant money would be released when the city had proof that project work was done. In other words, the business owners had to come up with money upfront and then use the grants as reimbursements for part of the project’s cost.

While that isn’t unheard of with government grants, it can be an added hardship for small businesses that struggle to stay afloat or don’t have access to loans. Over the following months and then years, some of the announced NOF winners had to withdraw because they didn’t have the money to start their projects.

“You had to get so much matching funds or you didn’t get the grant. To me that wasn’t really a grant,” said Clarence Glover, owner of Majestic Florist in the Chatham neighborhood on the South Side.

Glover said he had plans to renovate his shop to draw in new customers. But he eventually decided not to accept the $250,000 the city was going to give him.

“For me it just wasn’t feasible to take out another loan on top of the mortgage I already have,” Glover said. “I didn’t want to go into more debt to get a grant.” He said he may reapply.

Esposito went ahead with his plans. In July 2017, he paid $505,000 for the 2800 W. Madison property as well as the two others nearby that Davis had lost in foreclosure, at 2746 W. Madison and 2811 W. Fifth Ave, according to property records.

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Little appeared to happen right away at 2800 W. Madison. In early 2018, city inspectors found multiple code violations at the building. A few months later, the city issued a permit to allow Esposito and his partners to make emergency floor repairs. The total cost of rehabbing the building would add up to more than $1.1 million, according to a contractor’s estimate that Esposito shared with the city.

Though the building remained shuttered, Esposito acquired more property from the city. In the fall of 2018, the city agreed to sell him two small parcels on the other side of Madison for $29,000, which the city recorded as the appraised value.

While the rehab work at 2800 W. Madison stalled, the city held onto the grant funds. Esposito wasn’t the only announced grant winner who struggled to get his project off the ground. Since 2017, the city has announced more than 190 grant winners, but just 53 projects have received money as of early this month, records show.

Business leaders who’ve participated in the program say city officials have improved it since it launched, and the city says the team overseeing it is different. The city now requires more documentation upfront to ensure that applicants have enough money to get their projects started. In some cases the grants can be released faster and cover a larger share of the total costs. The city also connects businesses with lenders, construction firms and architects.

Mayor Lori Lightfoot has made the Neighborhood Opportunity Fund a key part of her economic development strategy, Invest South/West, since taking office last year.

“I personally think that NOF is a pretty good program for helping existing businesses and even some startups,” said Charmaine Rickette, CEO of Uncle Remus Saucy Fried Chicken, which has locations on the South and West sides. “When you see a business that has a new facade and has been updated, it enhances the community as well, and the community has some pride in it.”

But after Uncle Remus was named a grant winner in 2017, Rickette turned down the money so she could do more planning and line up additional funds. Last year she reapplied and was awarded another grant. She hopes to start renovation work on her Austin neighborhood restaurant in February.

“It moves slow,” she said of the grant process.

The city still hasn’t released grant funds for the rehab of 2800 W. Madison. City officials say Esposito and his partners have not yet shown they have the additional $750,000 or more needed to finish the project.

Not long after I dropped the letter at Esposito’s home, I got a call from Anton Hilton, one of his partners for the 2800 W. Madison renovation. He confirmed that the property needed extensive work and said they were trying to put together enough funds, which was complicated by the COVID-19 pandemic.

“We are still up against a pretty big challenge,” Hilton said.

He stressed that so far he and his partners had spent only their own money at the old Catfish Corner property, but said they were looking for other investors, potentially including neighborhood residents. They also wanted to see if the city could offer any more assistance. Most government initiatives weren’t bold enough to spur new businesses, let alone turn around entire neighborhoods, he said.

“Everyone’s still talking about sprinkling a few dollars in the community and nothing really changes,” Hilton said.

He and his partners now hope to open a food court that offers healthy options, which he sees as critical in an area with a lower-than-average life expectancy.

Burnett said the idea was well received by other community leaders after Hilton presented it in a recent meeting.

“We’re just all trying to encourage him to get something done,” Burnett said. “We need some economic development over there.”