Last Thursday, with wounds still raw from a contentious budget vote the day before, Mayor Daley used the ribbon-cutting ceremony for an upscale indoor market in the West Loop to rebuke rogue aldermen and other critics of his tax increment financing program.
In the case of the market, the City Council, at Daley’s urging, voted in 2006 to spend a total of $12 million in taxpayer money on construction of a new shopping area in the Ogilvie Transportation Center; $8 million of that sum went to the French Market. The project happens to be headed by a well-to-do, politically connected developer who’s contributed thousands of dollars to the mayor’s campaign coffers. And the city plans to spend another $23 million in the River West TIF district through 2011.
Best of Chicago voting is live now. Vote for your favorites »
Eight of the ten districts set to receive the most TIF-funded investment through 2011 are in prosperous neighborhoods near downtown, such as the South Loop and West Loop, while the districts that will receive the least investment are concentrated on the south and west sides. The biggest winner is the Near South TIF, roughly bounded by Michigan, Van Buren, State, and 21st Street: the TIF budget indicates that about $118 million will be spent there through 2011 on things like streetscaping on Congress, facade work on the Harold Washington Library, a rehab of the Blackstone Hotel, and construction of a new Jones High School. That’s more than the total TIF spending planned for 82 districts on the other end of the spectrum in the same period.
Moreover, what qualifies as an “economic development” project is so loosely defined that the Daley administration can—and does—justify spending TIF money on just about anything. Among the hundreds of projects slated to receive funding are public housing redevelopments, new sidewalks and speed humps, CTA station reconstruction, ornamental street lighting, and subsidies for corporations, a bakery, a Jewel, and a theater troupe. Most, like public infrastructure and maintenance spending, are not subject to consideration by the City Council even though comparable expenditures in the regular budget are; others, such as the subsidies, benefit for-profit companies operating in already prosperous business districts.
When the City Council creates a TIF district—which is almost always done at the mayor’s behest—it freezes for up to 24 years the value of the property in that district that can be taxed by the schools, parks, and other bodies. Assuming property values rise, the owners still pay higher taxes accordingly—but all those extra tax dollars go into the TIF account. The more property values rise, the more money the TIF collects.
The specifics of how the city spends TIF money have always been kept from the public, even when Mayor Daley and his top aides craft a budget for it. When city officials shared small pieces of such a budget with individual aldermen this fall, several passed theirs on to us.
On November 24 Hoyle e-mailed us saying she would grant our appeal. She said she’d send us the budget once Community Development had redacted the names of companies with which the city was still actively negotiating.
