PI Original Josh Kalven Wednesday September 9th, 2009, 10:16am

United's Taxpayer Windfall Grows To $50 Million

Mayor Daley really has a thing for United Airlines. 

First, he forked over $5.47 million
(PDF) in tax increment financing (TIF) funds last year to help
refurbish the company's new corporate headquarters on Chicago's Wacker Dr.  Earlier this summer, he sweetened the ...

Mayor Daley really has a thing for United Airlines. 

First, he forked over $5.47 million (PDF) in tax increment financing (TIF) funds last year to help refurbish the company's new corporate headquarters on Chicago's Wacker Dr.  Earlier this summer, he sweetened the deal by giving them an extra $10 million (PDF) to offset the local tax on jet fuel.  Then August brought the news that he was working to attract the company's operations center -- and its 2,800 employees -- to the Willis Tower with a $25 million TIF subsidy. 

But apparently, $25 million wasn't enough for United.  Yesterday, Crain's reported that the city had found an additional $10 million in public funds:

The Daley administration is coughing up an additional $10 million to entice the parent of United Airlines to move its operations center downtown from the northwest suburbs, boosting the total subsidy to nearly $36 million.

If the plan goes through as is, that will mean United has secured $50 million in taxpayer funds in less than two years.  Wow.

It's also worth noting where that addition $10 million is coming from:

The size of the additional grant, to be paid over five years from the city’s general corporate fund, was based on the projected new taxes that United employees would pay after the company moves operations to Willis Tower, formerly Sears Tower. The grant would be paid beginning in the second quarter 2012.   

When news of the $25 million subsidy broke last month, city officials explained it was worthwhile because of the ultimate boost in consumer spending that would be caused by the 2,800 new workers.  Crain's Greg Hinz did some back-of-the-hand calculations and estimated that those employees would generate an extra $500,000 in sales tax revenue each year and a total of $1 million to $2 million in total tax revenue.  Now we learn that this extra $10 million "grant" essentially amounts to us giving back -- for the first five to ten years, at least -- the tax revenue that was used to justify the $25 million subsidy in the first place.

We're interested to see how the city is estimating the value of these 2,800 United workers.  That information is found in the report submitted to the Community Development Commission, which we'll be trying to get our hands on today.  

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