Watchdogs say TIFs far from original intent

October 5, 2011 4:45:01 PM PDT
Chicago Mayor Rahm Emanuel says businesses that receive city subsidies in tax increment financing, or TIF, districts should not be forced to donate to charities.

His comments come after the city inspector general found former first lady Maggie Daley's group After School Matters netted the vast majority of those donations.

What is a TIF district? And has the program grown beyond its original mission?

Tax increment financing districts have been around since the 1970s. The original intent was to stake out specific parts of specific blighted neighborhood and use tax money to spur private investment.

One hundred seventy four TIF districts - and hundreds of millions of dollars later - ABC7 found not all TIFs are created equal.

At the corner of Kimball and Foster you'll find the city's newest proposed TIF project. Mayor Rahm Emanuel proposed Wednesday to spend 15 million TIF dollars to replace the Albany Park library branch which was built during the first Mayor Daley's administration. Does Chicago need it?

"No, it's a fine building. The library suits and serves the neighborhood. That's my opinion," said Nicholas Plattis, library user.

At Halsted and Monroe, Mayor Emanuel wants to use 7 million TIF dollars toward a new grocery store - not exactly the original intent of TIF.

An inspector general's report said to qualify for those funds "the city must demonstrate that the prospective district qualifies as a 'blighted area' or a 'conservation area.'"

The West Loop, blighted?

"I am for TIFs focused on economic development and job creation," said Emanuel.

One of the Chicago's very first TIF projects happened downtown beginning in the late 1970s. The city provided $86 million to plant the seeds for the Theater District. Broadway in Chicago President Lou Raizin said today his theaters bring in more than $800 million a year in economic impact.

"For somebody to come in and infuse the kind of dollars that were needed to renovate these buildings, it's doubtful that would have happened at all or what would have been renovated without the assistance of TIF," said Raizin.

By some estimates, the city spent 280 million TIF dollars building Millennium Park.

"We are far from what the original intent of TIFs were," said Emily Miller, Better Government Association.

Government watchdogs say in some cases TIF has turned into the mayor's piggy bank to pay for pet projects.

"In other areas of Illinois, TIFs work completely different. TIFs expire when the blight is gone, surplus money is returned to taxing bodies like schools. But in Chicago all that wealth is allowed to accumulate," said Miller.

Mayor Emanuel said he plans to reform the city's TIF program. For starters, the TIFs he has approved do not include the so-called public benefits clause exposed by the inspector general Tuesday. So companies that receive TIF funds will no longer be required to donate some of the money to community groups.

Load Comments