Mayor Rahm Emanuel’s rhetoric about the city’s Tax Increment Financing District, or TIF, program suggests some sort of revamp of how Chicago uses TIF dollars is in the making. In May, the Chicago Sun-Times quoted the mayor as promising to take “politics out of” TIFs, which, Emanuel said, should return to its roots. “It is for blighted economic communities,” he said. “It’s not for downtown or high-rent areas.”
The mayor established a TIF Task Force charged with drafting an “overarching TIF policy,” finding ways to better measure TIF performance, making the program more transparent and “evaluating the role that the TIF program plays in the overall city budget.” The task force is holding a public hearing about the TIF program Thursday, July 26.
Emanuel inherits a TIF program beset by controversy and one that seemingly became ubiquitous in Chicago during the former Mayor Richard M. Daley years. In November, Cook County Clerk David Orr reported the city had opened 158 districts, which had collected some $520 million in 2009. He also criticized the city’s TIF program as a “secretive slush fund.”
TIFs were meant to spur economic development and job creation in blighted neighborhoods. They allow the city to keep property taxes collected above an amount set when a district is created and use those dollars for a wide-range of localized development projects and costs during a 24-year period. The amount that public bodies like the Board of Education and park district receive in taxes from the properties located within the TIF district is frozen during that time.
Daley concentrated TIF dollars on providing grants to private companies, many of them located in or near the central business district. A report ChicagoTalks.org published in February found that private firms were promised around $600 million in TIF grants between January 1, 2000, and July 30, 2010, about half the total.
At the same time, The Chicago Reporter‘s “Loopholes” investigation showed that Daley’s TIF investment in Chicago’s downtown and near-downtown neighborhoods did not pay dividends for many city residents, especially those living on the South and Southwest sides. To quote at length from that piece:
Despite the billion-dollar investment, the Loop lost 12,296 jobs during the better part of the past decade and virtually all–94 percent–of the job losses affected Chicago residents compared with 6 percent by those living elsewhere. From 2002 to 2008, the bulk of those losses came from people living in predominately African-American communities. Those living across the South and Southwest sides took 84 percent of those losses during that time.
The spread of TIFs in Chicago and how city government has used the dollars it collects has neighborhood advocates promising to push for reform. A spokesman for the Grassroots Collaborative, an umbrella organization of labor and community nonprofits, recently told the Reporter that the group believes the LaSalle/Central TIF District should be closed. LaSalle Central centers LaSalle Street, and has paid for TIF grants to companies like CME Group, United Airlines, MillerCoors and other large companies.
One of the TIF grants Emanuel’s housing and economic development staffers signed off on, meanwhile, was reserving $7 million from the Near West TIF District for Mariano’s grocery store, at Halsted Street and Madison Avenue. That intersection is the gateway of the West Loop, a wealthier residential community, and the new grocer will be located across the street from an existing Dominick’s.
“If an upscale grocery store in an upscale neighborhood on the edge of the Loop is entitled to a big subsidy, name me any real estate project anywhere in Chicago that plausibly can’t make the same claim,” wrote Crain’s political commentator Greg Hinz. But city officials believe the grant is justified because it supports 200 new jobs.
© Community Renewal Society 2011