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Mayor Richard Daley on Tuesday appointed Arne Duncan, an obscure deputy schools official, to lead the country’s third-largest school system out of what Daley has called a period of stagnation.

Duncan brings a passion for literacy and a pedigree from a family immersed in education, but also a relatively short resume that includes stints as director of magnet schools and deputy chief of staff for Paul Vallas, the man he will replace as chief executive. In three years with Chicago Public Schools, Duncan never had a high enough post to merit his own secretary.

Duncan was exuberant at his selection and said he is ready to tackle the problems that have slowed academic progress across the system.

“I am optimistic that the public schools can offer every child a good education,” Duncan, 36, said in accepting the appointment during a City Hall news conference with Daley. “I don’t accept this responsibility lightly. I want to be an advocate for every child and provide every child with a good education.”

Duncan, who stands 6 foot 5 and towered over the mayor Tuesday, has split his adult life between basketball and education. He took a year off from studying sociology at Harvard University to become a tutor and later bombed a tryout with the Boston Celtics before heading for Australia where he played pro ball for four years. He still plays hoops with Michael Jordan.

The appointment comes three weeks after Daley selected Michael W. Scott, an AT&T executive and former chairman of the Chicago Park District, as the new Chicago Board of Education president, replacing Gery Chico. Scott and Duncan are expected to win approval from the board at its monthly meeting Wednesday.

Not fully prepared

Even as Duncan accepted the assignment, he acknowledged that three years under departing schools chief Vallas have not fully prepared him for the demanding and complex post.

Unlike Vallas, Duncan has limited management and financial experience beyond a few years running a small, non-profit education program staffed by about 40 workers and officers, 31 of them part time, records show.

By contrast, Chicago’s public schools have a $3.5 billion budget, 45,800 employees, 435,000 students and nearly 600 schools.

Daley said expertise can be acquired, and he praised Duncan, a 1987 magna cum laude graduate of Harvard and a longtime mentor and tutor of underprivileged children on the South Side, as someone who “starts with an understanding of how to get things done.”

Duncan can “work with people and groups with different views to find the common ground that puts our children first,” Daley said.

In the next breath, Daley and Duncan began to downplay the significance of standardized test scores, a hallmark of Daley’s efforts to hold schools publicly accountable. This year’s scores dropped in high school reading and elementary school math, erasing two years of improvement and leading to the ouster of Vallas and Chico.

“Test scores may not improve as much as we would like,” Daley said, with Duncan nodding in agreement.

Testing should be “a piece of the equation, not the entire equation,” Duncan added.Those who know him say Duncan is determined, a fast learner and has sharp political instincts–skills that will serve him well as he joins with Scott in running the schools.

In many respects, he is a protege of John Rogers, Duncan’s boyhood friend from Hyde Park who went on to become CEO of Aerial Capital Management, which manages $4 billion in assets. The two continue to play basketball together in their spare time.

Duncan comes from a family passionate about education. His mother has run the Children’s Center, a tutoring program in the North Kenwood/Oakland Community, for 40 years. His father is a psychology professor at the University of Chicago, and his wife and two sisters are all educators.

He was educated at the University of Chicago Lab School, where his wife, Karen, is the athletic director.

Duncan has been involved in just a few high-profile initiatives in the public schools. He was Vallas’ point person to create magnet programs in “clusters” of neighborhood elementary schools, to attract middle-class families who might otherwise consider private or parochial schools or leave for the suburbs.

The magnet cluster program also was an effort to reduce the system’s $100 million annual busing costs by allowing students to attend magnet programs closer to home.

The program has been established in Hyde Park, Near North Side, Austin, South Chicago, Lakeview, South Shore and South Lawndale. In all, 188 of the city’s 596 schools form 43 clusters, Duncan said.

But with this spring’s test results, the city’s elite magnet high schools saw their reading scores drop, as most other high schools did.

Duncan also was an administrator of the service learning program, in which this year’s high school graduates were the first class required to complete 40 hours of community service, officials said.

Looking to Vallas

Duncan praised the administrative staff Vallas put into place, saying he doesn’t see any reason to make major changes–at least in the short term. He also said he would draw on Vallas for guidance as he assumes leadership.

Starkey Duncan was asked at the press conference if his son was up to the job, and he answered with a basketball metaphor: “At the end of the game if the team is behind by two points with about three seconds to go, Arne wants the ball. He does not shrink from taking responsibility.”

Duncan was not the mayor’s first choice for the $180,000 a year post. Sources said Daley first offered the job to Library Commissioner Mary Dempsey, who turned it down.

Even some of Duncan’s colleagues at the board were mystified about the appointment, calling him a “surprise selection” and questioning why Daley picked him to lead the second phase of school reform. Others said Duncan must immediately search for new ideas to jump-start reading scores.

“A lot of us didn’t find out about the appointment until a few minutes before the mayor held his news conference,” one top schools official said. “People around here were very surprised. Arne has a lot to learn.”

Deborah Lynch-Walsh, who will become the new president of the Chicago Teachers Union next week, said she doesn’t have any history with the new schools chief. She is eager to work with him, she added.

“Our message to him is the same as it was in the campaign, that teachers need to know that the system respects them and respects their work and if they involve us, we can get the type of system we want for all Chicago schoolchildren,” she said.

Before arriving at the schools, Duncan in 1992 launched Rogers’ Ariel Education Initiative, which mentored children in the now defunct Shakespeare School in North Lawndale, one of the worst performing schools in the city.

After the school closed, the Ariel program followed the students through high school and helped them pursue and pay for a college education. Of the 40 students adopted, 32 graduated from high school and most went on to college, said Rogers, a former Park District Board president.

By 1996, Duncan led efforts to reopen the Shakespeare School as the Ariel Community Academy, established through the system’s Small Schools program.

“I asked him to lead the initiative because he has an extraordinary passion for helping inner-city kids, and `giving back to the community’ is a mantra that, quite simply, is in his blood,” Rogers said. “He has this extraordinary ability to reach kids and their parents. People say he’s like the Pied Piper because people just seem to follow him.”

Local reform advocates said they hope Duncan’s administration will be more inviting than the departing administration.

“We’re really happy that the mayor has chosen someone who understands the importance of school creativity and community involvement, and we’re very hopeful that school reform can move into a new phase that emphasizes collaboration,” said Don Moore, executive director of Designs for Change, which advocates local control of schools.

Jacqueline Leavy, executive director of the Neighborhood Capital Budget Group, said she believes the new schools team will be more willing to reach out and consult watchdog groups such as hers.