Tuesday, October 27, 2009

TIF Awareness Grows

People are finally waking up to the fact that the city is sitting on a huge pile of money in its TIF funds, while crying "poor us!" and cutting back on essential city services and staffing.

This is one of the goals that the Fix Wilson Yard lawsuit had hoped to accomplish, bringing recognition to the fact that huge percentages of our tax dollars are going toward aldermanic "gimmes" like fish farms and parking structures, rather than funding Chicago schools and police.

Read about it here on Progess Illinois. And a huge tip of the hat to Ben Joravsky of The Reader, who's been beating this drum for years and is finally getting the recognition he deserves. Of course, the combination of a property tax increase, the highest sales tax in the country, the selling off of city assets, and the Mayor bleating that Chicago is broke, broke, broke makes for a pretty receptive public.

27 comments:

  1. Yeah, it's pretty disgusting and disheartening to be a non-represented City employee and be told each and every year that you will not get a cost of living increase and you will have to take a huge hit to your salary through unpaid furlough days (15 since July and a new 24 for 2010) because the City is "broke." Yet we all know that the Mayor and City are sitting on a huge stockpile of money. It really makes you feel appreciated. Thanks for highlighting this, I hope something will be done about it soon.

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  2. It is so important for people to TRULY understand what TIFs are and how they really work as opposed to how they are sold to legislators and taxpayers alike.

    I'll be blunt: Most people don't get it. Heck, most candidates and elected officials don't get it. And the few that do recognize it for what it is aren't as keen on correcting the problem as they are about making sure they get theirs.

    Ben is a beautiful mad dog for civic justice. My kind of guy. Once his piercing journalistic jaw clamps down, he never gives up.

    He stands in good company with other early advocates and analysts, people who have been fighting for YEARS to get YOUR attention focused on this issue: Mike Quigley, Jason Liechty, John Paul Jones and many, many others.

    Why? Because beyond the first order consequences (additional borrowing and debt loads), there are the irrecoverable consequences---public assets with perpetual revenue streams sold off to patch short term budget shortfalls.

    This is not good fiscal management. It's not even good politics. Unless, of course, you're receiving the off-the-books subsidies that TIFs provide.

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  3. I've never seen another community whine and complain about getting millions of dollars in order to help the community. I've noticed that a lot of you here complain about Uptown but then complain when money is spent to build Uptown up.

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  4. Would it have even mattered if this article came out when FWY needed it? After seeing how the Wilson Yard Tiff - Part 2 was rubber stamped into being, who know what it will take to end the City Hall money suck?!?!?!?

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  5. Looks like the Trib needs to grow some ... awareness, as well:

    In some neighborhoods, part of the increase is cushioned by the expiration of large special taxing areas, known as tax increment finance districts, that siphoned funds away from the county, city and schools to build infrastructure.

    Believe the lie, Trib.

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  6. Eric, you do want a responsible use of our tax dollars, right?

    Personally, I'm not comfortable with Target getting huge tax subsidies while Chicago is nickel and diming small businesses. I don't agree it's prudent to spend way more money on subsidized housing units while market rate units are selling for almost half of the same amount. I like fish but it's a little much to spend tens of millions of dollars on a not-for-profit fish farm that will have a few employees.

    If Helen is going to refuse to listen to her constituents, then I want others to know and Uptown Update has proven to be a means to holding elected officials accountable.

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  7. So eric, you're telling me we needed a TIF to develop 5 acres of prime real estate in the heart of Uptown? No developer would have ever wanted that land? Yeah right! People should complain - and complain loudly. It is their tax money.

    Had Wilson Yard been put on the open market, not only would it have been swept up by a developer quickly, but the CTA would have gotten a whole lot more money for it. Plus, it would have been already been completely developed.

    My guess is this land "HAD" to be turned into a TIF because there was no other way for "SOMEONE" to use it for low - to no income housing.

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  8. ...but then complain when money is spent to build Uptown up.

    Enlighten us to how Uptown is being built up, cuz compared to other wards (44th/40th), I'm just not seeing it.

    1 Target, next to a concept that CHA discounted (which, I'm hearing rumors, the senior portion won't happen due to regulation failures), and surrounded by aging and empty store fronts might not be considered as "building up".

    Even with another Subway, nail store and/or video game store attached.

    Additionally, no one minds money being spent to help the community (if done so effectively); however, by definition, "community" is defined as an encompassing group of people, not just certain groups of people.

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  9. eric3446, your understanding of the argument is not complete and since you chose to blanket comment all the TIF critics on this site with an unqualified generalization, I will respond as such.

    Just HOW are TIF funds being used to 'build Uptown up?' as you so eloquently wrote? A Target? A new low income building? At a price over $50M, that argument is laughable.

    Tell me, is subsidizing hundreds of thousands of dollars in relocation costs for a couple of business on Broadway 'building Uptown up?'

    How about parking structures, or fish farms, or vacant property near the red line and the lakefront? are those all worthy of tax dollars?

    Some of us are angry because OUR (and POSSIBLY your) money is being spent without over site or public input. Our opinions are not heard at City Hall nor by or Alderwoman. We are accused of being political opposition when we ask for safety on our streets. We are blamed as gentrification fanatics when we question the Ward's efforts to reduce local poverty. We are disrespected by the Alderwoman's staff. We are lied to over, over and over again.

    So I ask you one more time, because I really need some of your enlightenment, what have the TIF dollars done for us lately?

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  10. Eric the issue is waste. Look at Wilson Yard. Do you think the average price per unit would have been so high if Peter Holstein was selling those units to make a profit?
    Or would he have made them that drab brown boxy 1970 style if he needed to make a profit out of them? Seriously did Greg Brady design those buildings?

    This community didn't ask for TIFS. Some people with regular hands out did, and some folks who mistakenly trusted Helen did, but not all. Matter of fact I voted against Helen and disagree with pretty much all her philosophies. I find the lady selling soaps at Broadway and Wilson brings more value to this community that Helen.

    When did it become "whining" as apposed to our duty to challenge elected officials? Ok Eric I will shut up now and fall in to place.

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  11. Eric is probably a paid blogger from a PR firm folks.

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  12. Chip,

    that would be "Mike" Brady.

    But yes. The architecture for WY is gawd-awful, utilitarian eye-tripe that certainly will not age well.

    And here I thought Chicago was an architecture town.

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  13. eric3446,

    Like Suzanne Elder just commented, it is important to TRULY understand what tax increment financing is and how it works, especially if you're going to accuse those who oppose it as being whiners and complainers.

    The millions of dollars being spent to build Wilson Yard isn't new or additional money that we're "getting"...it isn't like winning the lottery...it's our property tax money that has been redistributed from supporting basic city services into separate accounts to fund pet projects of the Alderman and her cronies. What is the figure…68% of our property tax payments…?

    Whether Wilson Yard will "help" the community is highly debatable. This money isn't being spent to revitalize our crusty L station or support and encourage business development in our commercial corridors littered with empty storefronts, it is going into the pockets of a developer to build subsidized housing based upon a failed housing model and a big box retailer out of scale with the neighborhood. It has been used to build a backwards Aldi and relocate the businesses of Shiller’s supporters.

    And, thanks to an extension to the lifetime of the TIF, MORE of our money will now being spent on a green technology center/fish farm and on some parking lots. Maybe. That is another problem with TIFs...they're little more than blank checks that an Alderman can spend freely on projects with little to no oversight...once approved, what the money is actually spent on is fluid. Remember the movie theatre that was supposed to be part of Wilson Yard? There is very little stopping Shiller from scrapping her big plans for a fish farm and turning the Salvation Army into a methadone clinic or yet more subsidized housing in Uptown. I was at Shiller’s presentation when she was requesting the TIF be extended…she received $60 million by putting together a handful of power point slides and an extraordinarily vague budget.

    After a summer of increased violence in our city – can anyone even count how many incidents of “shots fired” there have been in Uptown alone – we’re looking at another city budget with very little increased funding to the police department due to the city budget shortfalls. However, all over the city, TIFs are siphoning of millions upon millions of dollars that could not only help plug those deficits, but also help put more police on the streets or prevent so many furlough days or layoffs for city employees. Instead, we’ll be blowing (or nearly blowing) our “rainy day fund” from selling the skyway and parking meters. All over the city, tax payers are funding private developments – relocations of businesses to Sears/Willis tower, fancy new showrooms for car dearlerships at North/Clyborn, and housing developments of concentrated poverty in Uptown instead of keeping our city financially afloat.

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  14. Yo, I wasn't going to give Mike Brady credit for that monstrosity.

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  15. I've just been handed a correction - the rumor which I heard re: senior housing issues was just that, a rumor.

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  16. "TIF are enormously complicated"

    bzzz!

    no they're not

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  17. "bottom line is they allow property taxes within a given area to be diverted from the City's general fund"

    BzzzzT!

    well, ok, but most significantly, TIFs divert taxes from schools, parks, libraries, and County

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  18. One really terrible aspect of the WY TIF is that there isn't a real, detailed construction budget that people have access to.

    When Helen and Peter went back to the TIF honey pot the first time in 2007, Peter just said "Hey, construction costs have gone up! Have you seen the costs of steel lately? I need more money."

    Poof! Money is approved and handed over with no strings attached, no budgetary justification, no nothing.

    It's truly incredible that this is the state of affairs with regard to TIF.

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  19. Hugh is right, TIFs are not enormously complicated but they are enormously misunderstood.

    Sooneratkent started the conversation with an observation that demonstrates the essential problem. His or her salary is frozen and declining because the natural growth in tax revenue realized from increasing property values is being diverted from general revenue into TIFs.

    Now apply Sooneratkent's personal experience and generalize it across all line items on your property tax bill---schools, parks, police, public health. Everything that is really important in the public sphere has had its operating income frozen---for 23 years (or thereabouts).

    Think about it this way. Folks are a little cranky because housing prices have stagnated or fallen slightly in this recent financial calamity (note: Uptown prices have held rather well compared to other areas). Ok, now imagine not gaining ANY appreciation on your home or condominium for 23 years. Pretty upsetting isn't it? Well, now you have a visceral feel for how monumentally dumb TIFs are and how it is they are gutting the life of everything we call "public good."

    Your tax dollars have been diverted AWAY from the education of our children, AWAY from the care and preservation of our parks and libraries, and AWAY from the staffing of our sanitation services and police districts---the very reasons we consent to government and representation.

    Is it important that your taxes have subsidized Wilson Yards? Sure but what's happened is actually much, much worse.

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  20. I have been in the Tribunes ear about running this story. Has anyone else contacted any other major news outlets about this (our friends at CBS2)??? The Tribune said they have been following and will most likely be covering it soon.

    I think we all know whats happens when the media covers the corruption in this city/ward. Its like turning the lights on and watching the roaches scatter.

    "Run Helen Run"

    "Run Helen Run"

    "Run Helen Run"

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  21. “Those TIF districts — they have no growth in economic development. . . You’re trying to build economic sense in there. That’s what you’re trying to do — and we’ve done that in many communities. If you didn’t have TIFs, you would have nothing in this city.”

    Love,

    Richard M. Daley
    October 27,2009

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  22. I was thinking as I walked how good a new trade school would be in the old Salvation Army building.It would fit nice I thought with Truman College around the corner.Has this ever been brought up for discussion?

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  23. I know it's a bit of a stretch, and an odd parallel, but to me the Wilson Yard 'project' reminds me of the ill-fated Romanian dictator General Ceausecu's palace.
    (in other words. wasted tax dollars, and totalitarian farce outcome).

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  24. "TIFs are not enormously complicated but they are enormously misunderstood."

    IMHO about 1/2 of the misunderstanding among taxpayers is a result of reporters talking & writing about TIF w/o investing the time to understand it 1st

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  25. S/T: "Daley also rejected claims that tax-increment-financing (TIF) ... is driving up property taxes by siphoning hundreds of millions of dollars away from the city’s property tax base."

    in many ways a TIF is a similar to taking property off the tax roles

    Assessor Houlihan sez Daley doesn't understand the property tax system in Cook County, but Daley is dumb like a fox

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  26. Ald Tom Allen:

    “We should re-name it the ‘Over-tax fund’ — OTF. How can we with a straight face tell the citizens of Chicago that, ‘We have $1.1 billion of your money stuffed under our mattress, but don’t worry. We’re gonna give you $35 million in [property tax] relief?’ ’’ said Ald. Tom Allen (38th).


    I do find that article interesting in how the aldermen are blaming Daley, while they - as Council - control the power of the purse (if they had the testicular fortitude to actually do their jobs, and not simply sell their/our souls to get funding for their pet projects).

    It's called "oversight". It's Council's job, and (obviously) they aren't doing it.

    Also - the more TIFs are discussed by the media and by other members of Council, the more of what Helen told us during the WYTIF amendment meeting gets further exposed as high-grade crap.

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  27. I believe real reform is down the road, perhaps sooner than we think. Now that I take the train to work, I have time for more reading. In "Freakonmics", the authors discuss the role of blogging and bringing to light the corruption that exists.

    The book gives a marvelous quote from Supreme Court Justice Louis Brandeis, who said "Sunlight is said to be the best disinfectant."

    Thanks to UU for bringing in some of that sunlight.

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