While we’ve all been riveted by Governor Blagojevich’s alleged plans to sell Barack Obama’s Senate seat to the highest bidder—and his subsequent decision to give it to charity—Mayor Daley has been busy making his own deals, mortgaging the city to balance the budget and win the Olympics.
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More than a fourth of the money was designated for a “rainy day fund”; I’m guessing Daley plans to use some of it on the Olympics. And the rest? When Daley privatized the Skyway back in 2004, he said it would be “fiscally irresponsible” to lease assets to pay off regular operating deficits. But now he says he intends to spend at least $325 million from the parking meter deal to help control the city’s near-term anticipated deficits. He’s also promised to plow $400 million into an interest-bearing account to offset the loss of the $20 million the city had been collecting annually from meters. But if the city doubled meter rates, as the new operator has promised to do in the next five years, revenues would climb too. And since interest rates are falling, it’s almost certain the city will have less money to work with than if it had kept the meters. Scott Waguespack, alderman of the 32nd Ward, estimated that they’d be worth at least $4 billion over the 75-year term of the lease.
Then there was the Michael Reese deal, approved 47-0 in the City Council on December 17. Daley unveiled this proposal in July, when he told reporters the city intended to borrow $85 million to buy the 37-acre hospital site from Medline Industries, the current owner. Medline would then—follow me now—make a $20 million “charitable contribution” to cover the cost of demolishing the hospital and cleaning up the site. Sounding a little like one of those old Celozzi-Ettleson Chevrolet ads, Daley and planning commissioner Arnold Randall assured us that the deal would cost taxpayers nothing: Unnamed developers were lined up to purchase the property for the full $85 million so they could build as many as 7,500 units of housing, which would be set aside for about 15,000 athletes during the Olympics. The developers could then sell them off later at a profit. But the deal would go through even if Chicago didn’t get the Olympics, Daley and Randall said, because apparently it was just too good for any sensible developer to pass up.
And can we please stop calling it a “charitable contribution”? It’s not as though the Medline folks said to themselves, “Hmm, what great cause can we contribute to? There are hungry people and diseases that need to be eradicated… I know—we’ll give $27.5 million to Chicago 2016!”
Still, get ready for sticker shock: now it turns out that the land won’t be ready to be developed until the city coughs up untold additional millions—in taxpayers’ dollars—to build roads, sewers, and other infrastructure, according to Chicago 2016 executive director Lori Healey.
Ben Joravsky discusses his columns weekly with journalist Dave Glowacz at mrradio.org/theworks. And for even more Joravsky, see our blog Clout City.
