Chicago Journal editor Micah Maidenburg digs into a $59m South Loop TIF to find out just how the money there will be spent. One of the first, I imagine, of many such stories as the public turns their attention to the administration's "shadow budget".
Even as the Calumet-Cermak district faces its demise, the city is negotiating with an unnamed private entity for a future potential TIF-supported project in the Calumet and Cermak area.
The existence of that project was made public on a list the Chicago Reader obtained through the Freedom of Information Act and recently published online. The list, which the city has now posted to its Web site, shows various projects that tax increment financing dollars will fund or potentially fund through 2011.
Braving the cold, more than 200 members and supporters of the Sweet Home Chicago Coalition gathered outside of Alderman Robert Fioretti's office (2nd Ward) at 429 S. Dearborn St. Tuesday morning, sometimes shivering from the bitter temperature but united in their chant:
"What do we want? Affordable housing!"
Members of the Coalition, which unites three unions and nine community organizations, marched outside of Firoetti's office, urging the alderman to support an ordinance that requires 20 percent of future money generated from tax increment financing districts (TIFs) go toward affordable housing. In a TIF district, property taxes are frozen, freeing up money that would normally go to schools or parks in order to spur development in "blighted" areas. But the city's management of these funds has come under scrutiny lately, thanks to the tireless work of Ben Joravsky and Mick Dumke of the Chicago Reader, the Block 37 fiasco and thoughtful tracking from Progress Illinois.
According to the Coalition, Firoetti has supported TIF subsidies for wealthy corporations but has yet to support TIF funding for affordable housing. The Coalition released a report today (.pdf) showing that $91.8 million in city funds designated for these "blighted" areas instead has gone toward offices for companies that average billions of dollars in profits. According to the report, Firoetti has supported six of the ten projects the Coalition reviewed. In addition, members of the Coalition argue that if the $91.8 million instead went toward affordable housing, 2,944 residents could have received accommodation.
While the 20 percent won't fix all of the city's affordable housing woes, Julie Dworkin, director of policy for the Chicago Coalition for the Homeless, argues that it's a strong step toward creating more permanent affordable housing. "We decided that would be an adequate amount to spend on housing," she says. "We thought it was realistic. We're not asking for all of the money. We're asking for something that we think would make a significant impact."
Dworkin acknowledges that the ordinance is "not the whole solution," but it's the best thing the city can do now. "We're in this terrible recession," she says. "There isn't extra money lying around, except in these TIF pots. We know it's there...It's urgent right now in the recession because the need for housing is so much greater. We have this foreclosure crisis, we have unemployment rising, the numbers from Chicago Public Schools shows with homeless children, there's 25 percent more this fall than last fall, so this is the time when the need is really great...In Chicago, we've been dismantling public housing, so we have lost thousands and thousands of units through the demolition of public housing. We've been building some more, but we have not nearly made up for what's been lost."
As the issue of tax increment financing (TIF) districts and the non-appropriated "shadow budget" they generate moves into mainstream media coverage, it's important to remember a couple two tree things about TIF funds, the main one being that the money in TIF accounts is not interchangeable with the money that is missing (the deficit) in the city budget.
Second, TIF funds are property tax funds, and they can't just be spent however. The state statute limits what the money can be spent on. So although the Mayor controls some $1 billion in TIF funds, that money can't just be spent the same as the corporation funds the City spends on most of its budget; by state law it has to be spent inside the TIF district (or an adjacent district) and on statute-defined things.
Third, and related to that, is that the money in TIF funds is not the city's money per se. So if the TIF districts had not existed, the subsequent money raised would not be "freed up" for the city to use; it would return to the following taxing bodies (via the now-defunct NCBG):
After a series of fits and starts throughout the past four decades, today's news wasn't entirely unexpected: Block 37--a planned commercial center in the Loop--is facing foreclosure.
While this may signal all sorts of unsavory prospects for the commercial real estate market, it also raises the question of what now happens to the enormous amounts of taxpayer money invested in the project through the Central Loop TIF district.
Josh Kalven of Progress Illinois digs into the business-luring TIF deal--a program the Mayor once referred to as the only game in town for economic development--and points out just one of the many problems with it: it puts the public on the hook without making any real demands on the corporations who receive our largess. It's harder to reduce your student loan payments than it is to get tens of millions of dollars of public money.
Indeed, when the ink dries on the each of these deals, the debate in the press inevitably surrounds the cost-per-job estimates and the various long-term revenue projections stemming from the agreement. But what's missing is any method for examining the previous contracts. No one digs into the earlier relocations to see whether they fulfilled expectations and were ultimately worth the public investment. Instead, we're greeted with a perpetual refrain: "Trust us." "We know what we're doing." "Trust us."
Government transparency: realm of nerds? Or power politics?
America's post-war political tradition has been one of transactional politics. People measure their government less on ideology and more on "results", typically meaning, "what they provide". One of the side effects of this is that advocates for government transparency--who come from all points on the ideological spectrum, in equal degrees of vociferousness--are seen as process-oriented and, well, nerds. Transparency in government, however, isn't just something for good government hobbyists or hard-bitten cynical journalists. "Realists" on transparency argue that the desire to know everything the government does ignores the reality that in order to get things done, Serious People need to negotiate behind closed doors (Cf., privatizing parking meters; Chicago's stimulus list). Transparency--the state erring on the side of openness and making all of its institutional processes immediately available for public inspection--doesn't necessarily need to make government operations impossible. Quite the contrary, actually; foreknowledge of public scrutiny could act as a form of disarmament. Over time, the presumption of openness could disarm cynics and foster a mode of interaction between the state and private actors that eliminates the competitive pressure to hide things from the public.
Or, instead of using ridiculous jargon like I did in that last sentence, I can use a series of cliches; if Information is Power, then true and full transparency is an immediate way to give Power to the People.
Recently, two major government transparency issues have come (close to) the public eye: an amendment to the state Freedom of Information Act (FOIA) and the City of Chicago's new TIF transparency website. A look at these two issues below.
Chitown Daily Newsis reporting that the Fix Wilson Yard community group, which organized itself around resistance to the massive development that has been in the works and under construction for years now, is ready to file another lawsuit against the city and the developer:
Judge Mary Rochford on Friday granted a request by residents group Fix Wilson Yard to file a new lawsuit against the City of Chicago and Holsten Real Estate, the developer of the project that will feature a Target store, office space and housing for low-income families and seniors.
"We're trying to accomplish the same thing we've been trying to accomplish since the beginning, which is to stop the wasting of taxpayer dollars," says Thomas Ramsdell, Fix Wilson Yard's attorney. "My clients are as motivated as ever."
Ramsdell said Fix Wilson Yard will file the lawsuit next Friday.
The original lawsuit filed by Fix Wilson Yard in December 2008 accused the city of wrongfully establishing a tax increment financing district to fund the project. TIFs allow taxpayer dollars to be used to develop blighted areas. The group also accused the city of violating the state Open Meetings Act, among other allegations.
"It's just like they say," said commentator Duncan Birch, "you have to throw money in a hole and set it on fire to make money."
Of course, the piece was a parody of the dramatic increase in government spending in the form of bailouts, stimulus and whatnot, but there are real-life money holes here in Chicago.
