No sooner had I promised to keep the TIF mumbo jumbo out of my earlier explanation of Mayor Daley's goofy Olympic Village financing scheme then the e-mails and calls came in: Please, Ben, give us the mumbo jumbo!
Oh, brother. You know, I'm starting to think that some of you folks are developing a kinky fetish for this TIF stuff.
Anyway, here goes.
To answer the question sent to from a few folks, including Kate at Chicagoist: Isn't Michael Reese Hospital, site of the proposed Olympic Village, in an existing TIF?
Yes, it's in the Bronzeville Tax Increment Financing district, which was created in 1998 and has gathered about $20 million in its 11-year history. Much of that sum was contributed by Medline Industries, the company that used to own Michael Reese.
As soon as Medline sold the hospital to the city for $86 million—such a deal!—it stopped paying property taxes.
As TIFs go, the hospital site is now fallow land, meaning it generates nothing in property taxes. Because public entities, like the city, don't pay property taxes (except for the Park District when it plows ahead with one of its really stupid ideas).
Is everyone still following me? Somebody please wake up the folks at the Tribune—sooner or later they might be forced to cover this stuff.
Okay, where were we? Oh, yes, fallow land. The city loves it when tax-exempt land gets put in a TIF. Why? Because as soon as it's sold to a developer all of the taxes he or she pays go into Mayor Daley's favorite slush fund. The mayor is pretty much free to spend it all—ALL!—without sharing any of it with those grubby little bastards over at the board of education, park district, county, etc.
In this case, the city's going to carve the Michael Reese site out of the existing Bronzeville TIF and put it in a new TIF district—let's call it Bronzeville II. Once the next owner—presuming the city finds one—starts paying property taxes, Mayor Daley won't even have to share the dough with the remainder of the old Bronzeville TIF. It will all flow into the Bronzeville II, leaving him free to freaking burn the money if he wants to, which is pretty much what he has in mind with this Olympic boondoggle.
To build the Olympic Village, the city will borrow buckets of money and pay back the loans with the TIF funds that come pouring in to Bronzeville II. Get it?
By the way, my prediction is that the new TIF won't come close to paying the full bill on this huge waste of money, so Daley will be forced to do what he typically does when the TIF fund runs dry: he'll bring in more money from another TIF district.
Most likely, he'll bring in money from the remaining portions of the original Bronzeville TIF. And so many south siders think he's going to spend it on low-income housing, transportation, indoor running tracks, or anything people might actually need.
I so predict this will happen. Years from now when economists dig through the rubble of Chicago's financial collapse—brought on by the lies, deceit, double talk, and political cowardice of our leaders—they will say: Dang, that TIF geek guy at the Reader was right!