Far North Side Chicago residents were shocked to learn that the five active tax increment financing (TIF) districts located in the 48th Ward had $22.3 million sitting in their collective bank accounts at the start of 2013, according to city data revealed by the CivicLab at a Wednesday night community meeting.
That money would have otherwise been dispersed among the local units of government that rely on property tax revenue, including the Chicago Public Schools (CPS) district, were it not for the city’s controversial TIF program, which is intended to spur economic development in “blighted” areas.
Just three of the TIF districts located almost completely or 100 percent within the 48th Ward, which includes the Andersonville, Edgewater and Uptown neighborhoods, raked in a total of $26 million in property tax revenue since their inception through the end of 2012. Those three TIF districts were created in 1986, 1996 and 2007. The TIF district designated in 1986, the Edgewater TIF, expired in 2009.
In 2012 alone, the five active TIF districts in the 48th Ward extracted $4.4 million in tax revenue from property owners within the districts' boundaries, according to the CivicLab, a non-profit organization that provides citizens with data and tools for civic engagement.
"Multiply that by all the other [Chicago] wards and just look at the huge amount of funds that (city officials) have at their disposal, and the huge amount of funds that have been taken away from other types of development," said meeting attendee Karen Zaccor, an Uptown resident and member of Northside Action for Justice. "It's scandalous, really."
The CivicLab kicked off its TIF Illumination Project, which highlights how Chicago’s TIF program works at the ward level, in February of 2013. It has so far illuminated TIF data in 27 Chicago wards and Oak Park. The TIF Illumination Project was behind revelations last year that the city of Chicago had $1.7 billion sitting in its collective TIF district bank accounts at the end of 2011 and 2012.
Chicago had a total of 154 active TIF district as of 2012, which collected $457 million in tax revenue during that tax year. The city has pulled in $5.5 billion in total tax revenue since the TIF program started in 1986 through 2012. Tom Tresser, co-founder of the CivicLab, said Chicago TIF data for 2013 will become available in about a month.
For those living in a TIF district, a portion of their property tax dollars gets diverted from local units of government and funneled into the TIF district’s fund. The amount property owners pay into a TIF district varies, because it is based on the difference between what they currently pay in taxes and what they paid when the TIF district was first created. TIF districts typically have a life cycle of 23 years.
In return, TIF money is used for economic development projects, like a housing facility or retail project, that will supposedly generate future property taxes inside the TIF districts. TIF money, however, is also often used for improving streets as well as other public-sector and non-profit projects.
In the case of the 48th Ward, about 62 percent of the projects partially funded by TIFs through 2012 were for private developments, according to the CivicLab’s analysis.
One of the private projects included the Nookies restaurant in Edgewater, which was awarded $300,000 in TIF funds.
"Do you get any free hot dogs when you go in there," Tresser joked to the more than 60 people at the meeting, held at the Emanuel Congregation, 5959 N. Sheridan Road
Another 13 percent of the developments funded in part by TIF in the 48th Ward through 2012 were public projects, including an auditorium at Nicholas Senn High School and improvements to the CTA Bryn Mawr Red Line 'L' station, among others. The remaining 25 percent of the ward's TIF projects through 2012 were for non-profit developments, including the Hollywood House Apartments, a senior home at 5700 N. Sheridan Road. The non-profit Heartland Alliance, an anti-poverty organization, received $9.9 million in TIF funds to make building renovations after taking over the property in 2008.
Tresser pointed out that "there is a cloud hanging over the Hollywood House."
Hollywood House residents have alleged that the money meant to fix up the building was not used properly.
"This brings out one of the key deficiencies of (the TIF) program," Tresser said of the controversy surrounding the Hollywood House. "We really don't know how this money is being used. There is no evaluation. There is no clawback ... The money is a one-way ticket to the developer, or the people who get this money."
Tresser did note that TIF transparency advocates have a reason to celebrate this week. Cook County Clerk David Orr is set to unveil TIF information that will now be included on county property tax bills for the first time. Cook County property taxpayers in Chicago or suburban Cook County TIF districts will soon be able to see a report on their tax bills that details exactly how much of their money is being sent to a TIF program. The second installment of the 2013 property tax bill, to be mailed this summer, will include the TIF information.
Overall, Edgewater resident and Chicago public school teacher Raymond Wohl said he is shocked by the CivicLab's TIF-data illumination.
"Twenty-six million dollars? We're not seeing the value of it," he said of the property tax revenue collected by three of the 48th Ward's TIF districts.
Wohl said he would like to see TIF money used to create more parks in Edgewater. Specifically, he said there is a need for additional bike trails and beach walks along Lake Michigan.
"You know what people on Sheridan Road [near the lake] say? 'The city's broke. The state's broke,'" he said. "We learned tonight it's not broke, but the system's broke."