The mayor made his announcement at Logan Square's Hairpin building, which has been rehabilitated into an arts center and apartments under the city's TIF program.
"This area as you can see is pretty blighted. We've got empty storefronts up and down the street. We're hoping that this creates a kind of economic lightning rod for this area," said Ald. Ray Colon, 35th Ward.
In tax increment financing, developers of supposedly blighted areas have their property taxes frozen at a lower rate for up to 23 years so the difference may be invested in the project, creating jobs and opportunity.
"The instrument of TIF is an important tool, but it is one tool in a tool box," said Emanuel.
In response to complaints that TIF status had been granted politically connected developers sometimes in affluent neighborhoods and that the city and public schools were being shortchanged, the mayor appointed a task force to review the program.
"Economics should be the driver, not politics," Emanuel said.
On Sunday, demonstrators protested TIF funding for United Airlines' office in the so-called LaSalle Central TIF district in downtown Chicago.
"The mayor wants us to believe that this should be about shared sacrifice, but where is the sacrifice of those who have," said Carla Stamps, protester.
The mayor's task force chairman Carole Brown was asked how the city could undo undeserving TIF districts.
"Close the district. Amend the redevelopment plan, revise the spending strategy, but take some kind of action," said Brown.
The Civic Federation estimates the city and schools could reap hundreds of millions of dollars in tax revenue by closing undeserving TIF districts set up during the Daley years.
Mayor Emanuel would not directly criticize his predecessor.
"I did not ask everyone to come here to drive forward looking through the rear-view mirror. I ask them to look through the windshield and say what's the future for the city," he said.
On Monday night, Chicagoans will get their chance to tell Mayor Emanuel how they would fix the city's budget troubles. The mayor is holding the first of two town hall meetings.