CHICAGO (CBS) — A day after the City Council Finance Committee stalled a vote on a plan to limit tax increment financing for major development plans in Chicago, allies of Mayor Rahm Emanuel are expected to vote down the measure that could have blocked tax subsidies for several high-profile projects.
TIF districts freeze the amount of money that goes to schools, parks, and other taxing bodies for 23 years. Any increase in tax revenue generated by the district over those 23 years is funneled into a TIF fund that can be used for redevelopment projects in that area.READ MORE: Bears Vs. Cardinals: Three Things To Watch
However, critics have called TIF districts glorified slush funds for pet projects favored by elected officials.
Because TIF districts freeze property tax revenues for schools in the area, critics say principals can’t depend on rising property values to increase their funding.
That’s why Ald. Scott Waguespack (32nd) and other members of the City Council Progressive Caucus have been pushing the “TIF Back To Basics” ordinance for two years. The measure would require the city to provide TIF funds only to projects that cannot be completed without it. Areas that get TIF money also would have to be designated as blighted, and the property involved would have to be vacant or obsolete.
However, supporters have been unable to get the ordinance out of the Finance Committee controlled by Ald. Ed Burke (14th), and Tuesday likely will be no different.
Waguespack and other members of the Progressive Caucus first sought to get a vote on their ordinance at Monday’s meeting, but Burke noted they did not have a quorum, and recessed the meeting until Tuesday.READ MORE: Obamas Make Surprise Visit To Comer Children's Hospital For Holiday Celebration
Allies of Mayor Rahm Emanuel, who oppose the ordinance, showed up for Tuesday’s meeting and were expected to vote down the plan. They said TIF districts spur economic revitalization.
The mayor is seeking to create several new TIF districts, including one along the Chicago River between Lincoln Park and Bucktown, where developer Sterling Bay is planning the $800 million Lincoln Yards project. The TIF district for that area would be used to build new roads, bridges, and other infrastructure improvements for Lincoln Yards.
Supporters of the TIF reform effort have said the area where Sterling Bay wants to build is not blighted, as required by Illinois law. They also said the area is likely to be developed even without TIF money.
“We can develop Lincoln Park and Bucktown with our eyes closed. The resources keep coming there. They have been for many years. Even in an economic downturn, we didn’t see a downturn really in the economy. So I think it’s not an area that needs additional city resources, as opposed to other parts of the city,” Waguespack said.
In addition to the Lincoln Yards project, the mayor is seeking to establish TIF districts for “The 78,” a 62-acre parcel of vacant land in the South Loop where Related Midwest plans a $5 billion project to create a new mixed-use neighborhood; at the long-vacant Michael Reese Hospital site on the lakefront on the South Side; and for a 30-acre Chicago River project where Tribune Media plans to build about 9 million square feet of office and residential towers north and west of the Loop.
Waguespack has said those projects don’t necessarily need public money to be built, and he said the mayor has not followed state law requiring areas be considered blighted to be declared a TIF district. That’s why he and other members of the Progressive Caucus have been trying for two years to approve the “Back To Basics” ordinance to tighten the rules for TIF funding.MORE NEWS: Three Men Shot Outside Garfield Red Line Station
The city has more than 140 TIF districts, which have amassed a grand total of more than $1.2 billion in funds. Critics have said that money can be better spent elsewhere.