On New Year’s Eve 2003 Barry Callebaut, the world’s largest chocolate manufacturer, finished closing the old Brach’s candy factory in Austin, throwing the last of its 3,500 employees out of work.
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Barry Callebaut’s Christmas present comes from the Chicago-Kingsbury TIF, which was created on April 12, 2000, largely to subsidize the restoration of the Montgomery Ward building and the redevelopment of the surrounding land. State law requires that TIFs be intended to stimulate development in blighted communities that developers and investors would otherwise ignore. According to planning department documents, the area around Chicago Avenue and the Chicago River in River North qualified because it was “not expected to be redeveloped by private entrepreneurs” without the TIF.
This is obviously dubious. For one thing, the development of old River North factories into art galleries and lofts had been going on for years without much in the way of TIF subsidies. For another, the city had already committed to demolishing the Cabrini-Green housing project–the single greatest impediment to high-end development in the area. As more than one developer has told me, the forced expulsion of thousands of poor CHA residents from Cabrini-Green–an enormous logistical and legal endeavor that has cost tens of millions of federal and local dollars–provided the necessary catalyst for the economic transformation of the near north side. With the poor moved out and their old high-rises leveled, any developer who can’t make a fortune in River North without a handout should think about getting out of the business.
About two weeks later, Barry Callebaut sold the property for about $2.2 million. The 30-acre site remains boarded up to this day.
It’s unclear, however, how the public will benefit. Presumably we get a boost in civic pride from having Barry Callebaut claim Chicago as a corporate home, and that’s a big deal to Mayor Daley: over the last five years he’s directed TIF funds to help Boeing, United Airlines, USG, and now Barry Callebaut either stay in town or move their corporate headquarters here.
