When their six-day sit-in at Republic Windows and Doors ended last week, a crowd of jubilant workers and union activists cheered in triumph.
Based on what city officials tell me, it’s very unlikely the city of Chicago will ever recoup any of its money from Republic because under its contract the company has been exempt from potential penalties since June 2006. “I’m not sure there’s much that we can do,” says Pete Scales, spokesman for the city’s Department of Planning.
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In Chicago, of course, these handouts usually come out of tax increment financing accounts, and this one was no exception. As you may know, the operating theory behind TIFs is to take property tax dollars that would have gone to the schools, parks, county, and other taxing bodies and put them into special accounts for funding development in communities otherwise too poor or blighted to be revived.
The Goose Island TIF was created in 1996, and since then funding from it has been used to help develop facilities for about a dozen different industrial operations on Goose Island—including Republic. In 1996 the City Council, at Mayor Daley’s urging, approved $6,525,000 in TIF money to help Republic build a $20 million factory on the island. Four years later Republic returned to the council asking it to increase the subsidy by more than $3 million.
But it didn’t work exactly the way it was supposed to, either. The city handed over the TIF money so Republic could build a factory that would actually employ somebody. In fact, the TIF deal between the city and Republic is quite specific on this point: “The developer [Republic] shall use commercially reasonable best efforts to insure that not less than… a total of 610 full-time equivalent permanent jobs to be retained by the developer [Republic] at the Facility through the Term of the Agreement.” And that term, documents show, ends July 10, 2019.
Whoever moves there, you can bet they’ll leverage some more TIF money out of the deal.v
