From the time they first got a whiff of Mayor Daley’s plan to bring the 2016 Olympic Games to Chicago, many suspected that it was only a matter of time before he would fess up and acknowledge that the taxpayers would have to kick in some cash to make his dream come true. On Monday, just that occurred, as the City Council approved an ordinance establishing a new tax increment financing (TIF) district to help pay for the proposed Olympic Village in Bronzeville, while also reaffirming the city’s $500 million pledge to cover any shortfall.

Mechanics' Bob Quellos was in the council chamber at the time: “[A]ll of this passed unanimously,” he reported, “without any debate or discussion. Judging by the silence in the room it seems that this deal was put to bed a long time ago.”

This is just the latest chapter in the story of Chicago’s flawed TIF system, which long ago morphed from an economic development tool for blighted communities into a $500 million slush fund for Mayor Daley and his developer pals. Fortunately, there seems to be growing appetite for reform. As we noted earlier this week, Alds. Manny Flores (1st Ward) and Scott Waguespack (32nd Ward) have complained publicly about the lack of TIF oversight and accountability, citing the example set by Republic Windows, which soaked up nearly $10 million in subsidies before closing up shop in Chicago and moving their operation to Iowa. At the next City Council meeting in February, Flores plans to introduce legislation establishing greater oversight of the TIF process.

Meanwhile, one community group is eying the unspecified amount of TIF dollars committed to the Olympic Village project as an opportunity to make sure local representatives have a seat at the table as the spending process unfolds.

Since last summer, Communities for an Equitable Olympics 2016 (CEO 2016) -- a coalition of local community groups and unions -- has been organizing for a community benefits agreement that would put local residents first in line for the new jobs, housing, and mass transit upgrades that will accompany Olympics spending. On Tuesday, Alds. Toni Preckwinkle (4th Ward) and Pat Dowell (3rd Ward) introduced an ordinance that requires Chicago 2016 to adopt such an agreement and provides a framework for the terms.

The move is significant because it signals that the previous discussion over set-asides in the Olympic Village for affordable housing and minority and women-owned businesses are no longer just talk. They may soon become law.

To do so, the ordinance first needs to survive the Finance Committee and make it onto the council floor. Once there, Preckwinkle says she has the 26 votes necessary to pass it. If approved, it’s off to the drafting board where the specifics of the agreement would then be hammered out by the aldermen, community groups, and representatives of Chicago 2016. They hope to have a final, legally binding agreement in place before the International Olympic Committee (IOC) visits Chicago in April.

If not, coalition leader Shannon Bennett tells us that CEO 2016 is ready to make a stink. “We’re not going to be happy and we’re going to make it known when the IOC comes.”

Meanwhile, the real showdown could occur after the draft is finalized. It turns out that groups like the Urban League -- which are much more friendly with the Daley administration -- are already trying to muscle the grassroots coalition out of managing the agreement.

Preckwinkle discounted the pressure and told us that the local groups won’t be overrun. Bennett, an organizer with the Kenwood Oakland Community Organization, echoed her: ”It’s not going to happen. Not under our watch.”

So how does TIF play into CEO 2016's ordinance? First of all, the measure stipulates that the use of TIF funds will trigger the formation of a community advisory committee:

Chicago 2016 will create a community advisory committee if TIF funds are used for construction. The community advisory committee will receive input from the community and its leaders in the distribution of the TIF money.

Secondly, the agreement would tie its living wage requirements to the use of TIF funds:

Any business that leases space in the Olympic Village shall only be eligible for city-allocated employer incentive tax credits, low-interest loans, and grants if non-management employees are paid living wages with health care coverage or substitute compensation. ... Retail companies which lease space over a certain threshold in the Olympic Village shall only be eligible for TIF revenue or tax credits if non-management employees are paid wages to attain self sufficiency with health care coverage or substitute compensation.

It’s encouraging that an ordinance containing these types of provisions appears to have majority support in the City Council.

We’ll know that they’re really serious about TIF reform, however, when these same aldermen coalesce behind Flores' package in February. We hope to see an outline of that proposal next week and will keep you updated.

Read the entire CEO 2016 ordinance below (click the button in the top right corner to expand):