Monday, October 13, 2008

Surprise! Another Change To Wilson Yard Financing Agreement, Holsten Gets Less Accountability

So this is what last week's stealth changes were all about! Crain's reports:

City Makes Change to Spur Financing for Wilson Yard
By: Thomas A. Corfman Oct. 13, 2008

(Crain’s) — The Chicago City Council has approved a change to the subsidy agreement for the $151-million Wilson Yard mixed-used project in Uptown in an effort to make the financing more attractive to lenders.

The Daley administration has given up the right to stop payment of tax-increment financing (TIF) funds to lenders on the Target Corp.-anchored project, which is proposed for a site of a former CTA repair yard that runs along the west side of Broadway between Montrose and Wilson avenues.

The previous agreement gave city officials the right to stop payment if Chicago developer Peter Holsten violated key terms of a city redevelopment agreement, such as failing to complete construction. The agreement is to provide a $51-million city subsidy.

....Also a result of the change, the total amount of TIF assistance will be reduced by a little more than $1 million, the spokesman says.

Read the entire story here.

UPDATE: In related news, a reader writes in:

"Just having visited our local Aldi's I had to drive around 'excavating' equipment being offloaded for the WY Project. They are bringing in the big earth moving equipment which means foundations will begin to be dug, pilings poured and construction started before the ground freezes this Dec.

Shiller's 'stealth' move was ram-rodded thru the city council and now our money is securing the go-ahead for the construction of the low-income housing at WY. Everyone, take a look at what Uptown's TIF dollars are buying."


  1. Shiller's office said this was a "Technical amendment that saves 4 million dollars in TIF money done at the request of banks invested in TIF notes that result in 4 million in savings."

    To me, it looks like writing Holsten a blank check.

  2. Time to donate to FixWilsonYard.

    Seems the mayor and Alderman Shiller are determined to see this go forward no matter what agreements they need to change or the costs to the taxpayers and this neighborhood.

  3. "if Chicago developer Peter Holsten violated key terms of a city redevelopment agreement, such as failing to complete construction."

    Bend over Uptown. This blank check to Peter Holsten is gonna cost us BIG TIME.

    Imagine if Target has pulled out of Wilson Yard. That might explain the mysterious 4 million dollars in TIF money Shiller is claiming she is saving us.

    This "Technical Amendment" stinks on so many levels you can smell it all the way to Gary and beyond.

    Talk about the lack of due process screwing all of us taxpayers in one fell swoop.

    wombat is right, time to donate to FixWilsonYard.

  4. This 3rd revision of our agreement with Holsten is a very significant further shift in risk from the developer to the taxpayer. (Recall the 2nd revision was just last April).

    This is another major step in transforming a nominally private-sector economic development project, originally proposed as a private project incentivized by a minority-stake public subsidy, into a public works, work-for-hire project.

  5. Hugh,

    I would describe it as more of a "Keep Shiller as Mayoral toady" project than a public works project.

    She desperately wants those towers built and Daley desperately has a pathological need for 100 percent "toadyness" from our elected Representatives. They will seemingly do anything with the taxpayers money to achieve their goals.

    If these towers are ever built I wonder if the final cost per unit will be over $500,000. This is just wrong.

    As for Target it seems like the city will keep sweetening the pot until they come in. Perhaps the city can own the store and lease it to Target for twenty years at a cost of $1 per year. Oh I forgot the inflation increases. $1.22 in the fifth year.

    Time to get that lawsuit ready. Donate to Fix Wilson Yard. Annoy "da mare". I saw his nephew written up in the newspaper today for more taxpayer funded deals. Must be nice.

    Perhaps John Daley can adopt me and I can get some lovely taxpayer funded deals.

  6. The country has Wall Street in we have Helen and Holstein.

    Where is the government oversight.

    This is crazy!

  7. Where is my $4 million dollars savings?

  8. 33% off....damn I should have built it! I hope someone goes to prison.

  9. "Don't forget two things about the establishment: it hates change and it will always protect its prerogatives."

    Seems Mayor Daley and the City Council have learned that lesson well. We pesky voters and taxpayers are just in the way of them "protecting their prerogatives."

  10. Yes, shocking (not). If you you like the way Chicago politics works, you'll just love it when Barack Obama takes it national.

  11. Just having visited our local Aldi's I had to drive around
    'excavating' equipment being offloaded for the WY Project.

    Since this vote was in violation of the law, is there a way for an injunction to stop work? Boyohboy, this got railroaded through fast.

    I feel so used.

  12. "Since this vote was in violation of the law""
    It isn't inviolation of any law.

    We need to stop blogging and start writing checks. It only takes a few $$s if we all step up and DO IT!!

  13. I am really shocked by the gall of the City Council. Where in the United States would you find a legislative body that would blindly vote in a reduction in oversight and protections for taxpayers THIS WEEK? No place else than Chicago.

    I am trying to maintain a positive outlook but seriously folks, it is like most people in Chicago don't care until it happens to them. The Sun-Times and the Trib haven't picked up the fact that the City is capitulating some of its power to accomplish a public works project that shouldn't be done with TIF funds anyway. I am losing hope...and I am usually a hopeful person always wanting to see the goodness and fairness in others.

    I feel used too, trumansquare.

  14. What continues to amaze me, is that no clearly defined blueprint of this planned complex, doesn't seem to publicly exist?
    We know the old drawing is way obsolete.
    Why are there no floor plans, let alone depictions/descriptions of each building, beyond the foggy descriptions?
    I emailed this basic question to the 46th office weeks ago

  15. BuenaPk said (in response to my post): "It isn't in violation of any law."

    This is what Hugh said about the situation, which is why I'm under the impression the entire vote is illegal:

    In the other thread on the Finance committee agenda, we noted the Finance committee's violations of the Illinois Open Meetings Act.

    Well today's passage of the 3rd revised subsidy package for Holsten demonstrates further violations.

    We think the proposal was recommended by Finance at a 10 AM Monday committee meeting.

    Sorry, that's too late for a 10 AM Wed full Council meeting.

    The agenda for a Wed 10 AM public meeting is due, posted in City Hall AND on the the City website, by 10 AM Mon, 48 hours/2 business days prior by law.

    This legal requirement for internet posting is a relatively recent amendment to the OMA sponsored by Illinois State Senator John Cullerton of Chicago.

    So how did a proposal that was in committee until mid-day Monday make it on to an agenda for a Wed morning meeting due by 10 Mon? It's a puzzlement.

    The purpose of this law is to foster citizen participation in local government and allow time for interested citizens to contact their elected officials and petition their government.

    So tell me, is this not a violation of the law? I'm seriously not being bitchy or provocative, just curious. If this whole thing was shoehorned through legally, I'd like to know for sure. I'm all ears. ;-)

  16. Hey Uptown, can I get a deal from the city where they'll pay me whether or not I actually complete construction?

    Seriously!!!??? Would you ever hire a contractor and agree to pay them regardless of whether or not they do the work?

    Please, I invite some Shiller troll to come on here and attempt to defend this one.

  17. buenapk is right: give to FWY, let's let the attys figure out HOW

    "is this not a violation of the law? ... I'd like to know for sure"

    well, I think so, but pls recall here in America what is & is not a violation of the law is up to judges & juries, IANAL just a dumb guy on the internets

    pls don't infer from anything posted here that there's some kind of slam dunk available to us so there's no need to give, ok?

  18. floor plans

    here's links to links to the planned development from January 11, 2005

    there's a 1st floor plan at the end of the 2nd file

    Wilson Yard Planned Development approved

  19. Just curious - and could be totally off here, but if this new "amendment" prevents the city from stopping payment to Holsten even if he doesn't finish the project - do you think Holsten made the city do this because of the impending lawsuit? Maybe he figures that he needs some sort of security blanket because he himself sees WY as a sinking ship and of course, he wants his money even if a lawsuit stops the project.

    Again, could be wrong, but just a thought. Ultimately, I hope the amendment and the current WY plan get tossed out.

  20. I was at the Fix Wilson Yard presentation last night, and they said this latest thing the city passed - "just say yes, finance committee, even though you don't know what you're okaying, thank yooouuuuuu!" - is HUGE. Before, Holsten was on the hook financially if anything failed. Now the city has essentially co-signed, so Holsten gets off scot-free while he runs the project into the ground. And by "the city" paying for Holsten's mistakes - it means us, the taxpayers.

    Helen's canned statement that this whole thing was a "technical amendment for the banks" -- my left butt cheek. Another in Helen's Continuing Cavalcade Of Lies.

  21. So why is no one else picking up on the story?? Is there no one covering City Hall at the Trib, the Sun-Times or the Reader? Where, for example, is Ben Joravsky?? This story practically writes itself. Here is how I would start...who is going to finish it?

    During what may prove to be the nadir of the credit crisis and a national furor over accountability to taxpayers, the City of Chicago unanimously ceded its authority to withhold public financing from a project that is already over-budget and behind schedule. In violation of the state's open meetings act, this "technical amendment" to the WY TIF was spirited quickly through the City's finance committee before it was passed by the City Council. Little, if any, discussion or debate occurred on the issue.

  22. The real story is that none of the press is really picking up on this, especially the Reader. Odd they continue to wonder why fewer people are reading the papers, isn't it?

  23. So I've some thinking, and I think Helen is setting up the great blame-o switcheroo. Follow the logic....

    Holsten can't sell TIF bonds because of an impeding lawsuit. Nobody wants to buy a bond with a high risk of default.

    The city backs the bonds and says "we'll pay no matter what"

    The lawsuit goes forward, as it should, and the project gets halted for some extended period of time.

    Holston backs out of the project(I mean, why stick around if you have no skin in the game).

    The city is on the hook for the 51 million, and Helen can blame that loss on the FixWilsonYard people, and by extension, her opponent in the next election. See James! He cost you 51 million for that hole in the ground, I would have given you housing!

    Get ready folks, the plan is so brilliant, she enriches her friends, gets a kickback AND has a sweet(although not true) talking point for the next election.

  24. The real story is that none of the press is really picking up on this, especially the Reader.

    The reader is uber-leftist come communist. Last year they did a story on Helen Shiller that said basically that anyone who doesn't like just hates poor people. It was the biggest load of BS ever. The Reader will never say a divisive word against her.

  25. Yeah, but more than the Reader's "love" of Shiller is their hatred for TIFs.

    This whole thing...I really don't get it. Throughout everything, ALL of the community is saying "ok" to affordable housing at WY. The senior housing component is also fine with most people. The issue, as I gather from listening to people and reading here, is mostly the density of the housing development there, the concentration of poverty in the census tract, the technical issues with TIFs and the fact that there is no known criteria for the 78 family units (other than the CHA waitlist aspect).

    I might be willing to accept that the ParVenu is the market rate part of this development (and thus all 178 units can be low income) but Shiller has done nothing to show that she has a commitment to tie together these buildings as a mixed-income community at large. Letting history be our guide, I see every likelihood of more class warfare. Given all of the lies and deception, I am not even sure how the larger community will be able to let bygones be bygones and do the everyday work of turning these groups of buildings into a true community. It will be so important for children growing up there to not feel stigmatized and to know they are full and valued members of this community. I truly wonder (if WY is built as I understand it now) if we will be able to get from here to there.

    I can't believe that the people at the Reader, for example, are so obtuse as to not see the dimensions to this issue.

  26. " ... the Trib, the Sun-Times or the Reader?"

    unfortunately the WY amendment was overshadowed by the biggest deal in Chicago history passed a few minutes earlier

  27. Sassy. Wake up!!
    "Senior housing" It's a dead issue. Catholic Charities has pulled out of the project. Let me ask you. Would you move your granny into the middle of the project?
    "Sigmatized children" They will have no outside space. When asked about that, Holsten suggested they can play on the roof. Helen was there and smiled approvingly.

  28. So there will be no senior housing? I thought the latest was 100 senior units and 78 for non-seniors?

  29. Wait, the senior housing is gone? I hadn't seen that.

  30. The low income senior housing has fallen into the Holsten dynasty. Holsten owns and builds the failed all low income family housing on Broadway, Uptown's version of vibrant commercial retail street.

    By default, Holsten is also the developer, builder and owner of the senior building after two highly respected senior housing providers, Catholic Charities and Providence said, "No thank you. This project does not meet our standards for a good place to build senior housing."

    By the way, Ruth Shriman residents are paving the complaint pathway of what happens when the building and management is substandard.

    The building has lots of problems with water leakage and damage, unsafe front doors that are easily pried open, no security guards and now, drug dealers moving in with their relatives and conducting business.

    Everything about this project stinks to high heaven. I truly do believe we have the power to create something better for Uptown. And we will do it.

  31. Just to clarify, Katharine, you are saying that there will be senior housing (as always planned) but the difference is that it will not be run by a reputable organization with experience serving low income seniors. Right?

    As for Ruth Shriman, I hadn't caught wind of it going downhill like that. If you know more, (and want to) please post it.

    I like your last line:

    I truly do believe we have the power to create something better for Uptown. And we will do it.

    The only thing I would add is "better for ALL." Low income seniors, especially, don't need a poor housing situation that potentially exposes their vulnerabilities. And the needy senior population is
    g r o w i n g. (not EVERY aging flower child was able to score a $100,000 + part time job for the last 20 years!!!) We can, and must, do better.

  32. Sassy...
    Peter Holsten is the king of Wilson Yard. He's got his hot little financial fingers in the senior housing and the "affordable family housing".

    Holsten Real Estate owns the land, gets our TIF money to pay for the environmental cleanup and is off-the-hook for the TIF bank notes payment and any common sense accountability for completing the project.

    The City has abandoned the taxpayers' rights and basically given Holsten a blank check without any accountability.

    Best news is Ald. Burke, who's the head of the Finance Committee that pushed this through, is a managing partner in the law firm that represents both Holstnen Real Estate and Walsh Construction. Looks like they're all getting big fat City checks this week. Sweet!

    Ruth Shriman House's board members attend various neighborhood events. They've been very vocal about the growing problems they're having. No one seems to be listening; they're too busy working on building more sub-standard senior housing.

    The best thing is people are waking up to the political abuse of power and harm it really brings to communities like Uptown.