PI Original Matthew Blake Monday June 4th, 2012, 5:21pm

TIF Reform Tabled

The jury is out on whether Chicago Mayor Rahm Emanuel is serious about reforming the Tax Increment Finance, or TIF, economic development program.

The jury is out on whether Chicago Mayor Rahm Emanuel is serious about reforming the Tax Increment Finance, or TIF, economic development program.

At a City Council Finance Committee meeting today, Ald. Robert Fioretti (2nd) agreed to table an ordinance for 30 days that would have a finance sub-committee hold public hearings on each proposed TIF project.

Instead, Fioretti said that he would work with the city to devise a substitute ordinance over the next month.

Fioretti exchanged pleasantries with Andrew Mooney, commissioner of the Department of Housing and Economic Development, which is under the supervision of the mayor, on their mutual commitment to improve TIF spending, prompting Ald. Edward Burke (14th), the committee chairman to state, “It seems to me your goals are closer than at first blush.”

But city watchdogs that testified in support of the withdrawn measure contend Emanuel has yet to substantially change how the program works, and – like his predecessor Richard Daley – uses TIFs to benefit the already affluent city center.

Under TIF program, the city creates TIF districts in parts of Chicago that they have judged economically blighted. In these districts, a portion of someone’s property tax bill does not go to local government bodies, such as the Chicago Public Schools, but instead stays in the TIF district.

The siphoned money is then used to subsidize any project under the broad rubric of economic development.

In theory, TIF spending is a virtuous cycle – a publicly-subsidized new retail store, for example, will make the neighborhood more attractive and raise property values. Higher property values means more property tax money – more tax money, that is, to spend on continuing to develop the TIF district.

Daley greatly expanded the TIF program to the extent that about 30 percent of city land is now in one of 162 TIF districts. New TIF districts were created, but old ones were rarely eliminated, even when they became wealthy neighborhoods. There are now several such districts in booming, not blighted, neighborhoods adjacent to downtown.

This expansion means that about 10 percent of all city property tax money, or roughly $500 million a year, went to TIF – money that falls outside the normal city budget process.

A task force appointed by Emanuel in August proposed to reform the TIF program by setting performance metrics – like how many jobs a proposed TIF project would create – and making sure individual TIF projects align with the greater city good.

Emanuel spokesman Tom Alexander calls the Fioretti ordinance “redundant” noting that Emanuel already set up a “stringent” review process. Alexander also pointed out that nearly every significant TIF project must also be signed off by the City Council.

However, few of these projects – which have already been green lighted by the mayor and usually the alderman who presides over the TIF district – receive a substantial public hearing.

For example, the Chicago Reader reported two weeks ago on the city spending $29.5 million for a 1.5 acre river walk park in the pricey West Loop, as part of the questionable LaSalle Central TIF district.

Ashley Wooten, an organizer with the Grassroots Collaborative coalition of business and labor groups, noted at the hearing that as the West Loop got the river walk, “Many of our members have been fighting for over five years in Little Village for a park.” Little Village is a largely working class, almost entirely Latino neighborhood on the South Side.

“For us, it is really an issue of neighborhood and race and class equity in Chicago,” Wooten said, explaining her opposition to the current TIF program.

Celeste Meiffren, field director of Illinois PIRG, argues that Emanuel has not really acted on the task force recommendations, including transparency measures like developing a city Web site with more information on TIF spending. Emanuel said in January that such a Web site was on its way, but nothing has transpired.

According to Meiffren, the city plowed through $120 million in TIF dollars since the January announcement. “There is no clear timeline for when the public will start to see change,” Meiffren says.

Emanuel spokesman Alexander, however, contends that mayor has,“changed the program dramatically.” Emanuel has changed the focus of TIF, Alexander argues, by looking at how the program can create jobs and economic opportunity that fit into overall city goals.

Pressed for specifics, Alexander mentions that better use of TIF funds was part of the sweeping economic development plan the mayor announced in February.

Asked after the hearing if Emanuel was, in fact, better than his predecessor on TIF reform, Fioretti demurred, saying that, “After one year we still have a long way to go.”


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