This is what I posted on LinkedIn on May 15.
“There can be no real equity in Chicago as long as TIFs roll along. INVEST Southwest promises $250 million in TIF funding for ten communities of color where 488,000+ people live right now. The two super TIFs for the mega developments Lincoln Yards and Project 78 have committed $2.4 BILLION in TIF subsidies. These projects are in White, affluent parts of Chicago. NO ONE lives there now. And now as THIRD mega-project, the Michael Reese Hospital site (on the lake front) wants $200 million in TIF public dollars. See our arguments for ABOLISHING TIFs at https://tinyurl.com/TIFs-Social-Justice. Tom Tresser – tom@civiclab.us”
On may 16, Paul O’Connor, the Senior Urban Strategist for Skidmore, Owings & Merrill posted this response:
“I have no idea whether TIF should be repealed or not, but I do know you are making a disingenuous, if popular, argument. On Lincoln Yards and 78, the developers have to build the TIF-covered infrastructure with their own money — all risk on them, not the taxpayers. If they build those bridges and CTA stations etc. as they promised, then they get the TIF money. But you suggest to those reading that this TIF money is cash that can be spread around. Not so. Usually, the TIF money doesn’t even exist before a development changes lower-valued land to higher-valued land for tax purposes: the value difference is the “increment” (the “I” in TIF). Where the cash comes in is that local units of government postpone collecting the full taxes taxes on the newly created property values, and the developer keeps a portion of the cash value it has created. But it’s not right to link the apple of INVEST South + West with the oranges of these other two projects under cover of racial discrimination.”
Here is my reply from May 17.
“Paul – thanks for taking the time to comment on my post. Here’s how I look at these mega-projects. First – why do we need to pick up any related costs to their for-profit ventures? As I look around the research and online posting by well respected developers and real estate firms, I find that developers are responsible for 100% of construction inside NEW communities – which Lincoln Yards and Project 78 are (and the newly announced Burnham Shore, aka Michael Reese Hospital site is). So – if you and your clients want to build mega-projects on these vacant or almost-vacant sites, then they need to pay for them, including new streets, water lines, and, yes, even a new subway station if that station’s main purpose is to serve the new development. This leads to the second, related, objection. Why should the siting of these mega-projects in mostly White affluent parts of the city DRIVE public infrastructure planning and spending? The good (mostly Black) residents of the far south side have been waiting for the Red Line extension for 30 years. I suppose that the mostly White people who live in the Lincoln Yards project will enjoy a new Metra Station and the mostly White people living in Project 78 will enjoy their new Red Line station way before the folks in Pullman board at their Red Line stop. You say that the tax money is created FROM the developments and goes to pay the developers back for their risky investments in public infrastructure. But I say those investments are part of the deal – part of the overall risk of building in the first place. Let them prosper – by all means – with NO TIF MONEY. This way our public services – most notably our public schools which serve a student body predominately of color – will not be starved of those property tax dollars for 23 years. Come on, the developers are imagining that thousands of people will be living in their units – many will have kids that will go to public schools – all will use public services – but NONE will pay for those services via their property taxes for a GENERATION. That pushes up the taxes on the rest of us. That is not right. That is naked inequity. And here’s a fact that needs to be shouted from our civic rooftops – buried in the fine print for the Lincoln Yards and the Project 78 TIFs are $800 MILLION in finance fees. Now that is plainly obscene. Haven’t we sent enough of our public funds to Wall Street? That’s $800 million that will NOT go to our public schools, public libraries, public parks, or any public purpose. And lastly, I object to clouted and wealthy firms like SOM running the development show in Chicago. I object to these large developers showing cash on the mayor, the aldermen, and elected from the Governor to the Attorney General and even justices of the Illinois Supreme Court. The CivicLab has documented too many cases of TIF recipients delivering bounteous campaign dollars to elected officials over the years. You and your firm, SOM, are masters at Chicago politics. SOM, you, and four other senior members of the Chicago office have contributed $136,944 to local electeds – that I could find using public records and a PC connected to the Internet. Imagine what we could discover if had vast resources like you have available to you. But your firm has been connected to Chicago politics for over 50 years. “Architecture was not a passive component but rather an active component of the political machine under [Richard J.] Daley” states Bill Motchan in a 2014 post on Chicagoarchitecture.com in an article entitled How Chicago’s Mayor Used the Power of Architecture to Influence Politics. So, I think the picture of TIFs in Chicago is one of clout and inequity. We have much more evidence and analysis on this topic and invite you to visit https://tinyurl.com/TIFs-Social-Justice to review the foundation of our argument. The full set of arguments with sources can be found in our new book “Eliminate TIFs & Establish the Right To Development” which can be downloaded at www.civiclab.us.
