Rush University Medical Center’s proposed $900 million expansion

Perkins + Will

A Good Day for the Rainmakers

The well-connected score again as the city works out new TIF deals for a former alderman, a wealthy private hospital, and a big car dealer.

By Ben Joravsky

January 17, 2008

It was one step forward and two steps back at the January 8 meeting of the Community Development Commission, the mayorally appointed board that oversees the city’s tax increment financing districts. The good news is that a bigger crowd than usual—several dozen residents—showed up to protest the latest boondoggles. The bad news is that the CDC approved them anyway, including the second-largest TIF handout in the history of the program: $75 million to help Rush University Medical Center rebuild and expand its hospital campus.

There’s more. The CDC recommended creating a TIF district to fund a plan by developers, including clout-heavy former First Ward alderman Ted Mazola, to build a bunch of town houses on marshland near Wolf Lake, in Hegewisch, on the city’s far southeast side. A low point in the four-and-a-half-hour meeting was hearing an official from the city’s Department of Environment push the company line as she explained why destroying a large chunk of wetlands was really good for the environment, as money from the project could be directed into a fund to protect wetlands. Audubon Society members in the audience vehemently disagreed, pointing out that the development could disrupt the habitat of migratory birds.

The CDC also recommended giving $8.5 million to Grossinger Auto Group to help build a car dealership in the vacant Expo Design Center near the congested intersection of North, Halsted, and Clybourn. Lobbyist Terry Teele, a former deputy chief of staff for Mayor Daley, was so persuasive on Grossinger’s behalf that the CDC recommended making the site itself a TIF district, the Weed/Fremont TIF, with funds to be devoted exclusively to the project. No one from the city’s environmental department felt compelled to explain why the city would want to subsidize a multimillion-dollar auto dealership when it can’t find funds to alleviate the CTA meltdown. And no one from the planning department bothered to explain why one of the north side’s hottest real estate markets, where privately financed development fills almost every lot, merits a subsidy intended to eradicate blight.

This TIF project, mind you, comes on the heels of a proposal approved by the CDC in November to spend millions buying up and destroying all the property on the 4800 block of North Western in order to keep it from becoming like North and Clybourn. So one minute the city’s authorizing tax dollars to prevent big-box congestion and the next it’s spending tax dollars to add to it. Good thing it’s not real money, right?

The Rush subsidy comes out of the Central West TIF. Roughly bounded by Western Avenue on the west, Racine on the east, Lake on the north, and the Eisenhower on the south, this district was never intended to raise funds for Rush—the medical center isn’t even in it. When the TIF was created back in 2000, the city promised to spend up to $98 million on neighborhood schools, parks, and commercial development. Now, in order to underwrite the medical center, the city wants to extend the district south of the Eisenhower so it includes the Rush campus. It’s also pushing to raise the ceiling on the TIF to $250 million.

At the hearing several residents expressed outrage that the city still hasn’t completed any of the neighborhood schools or parks that were promised. “We have identified 300 children under the age of five who live in the West Loop,” Eric Sedler, president of the West Loop Gate community group, testified. “Our position is that these issues be addressed before the Central West TIF is expanded.” In response, aldermen Walter Burnett and Bob Fioretti, both supporters of the Rush project, said a small park should be completed in about, oh, two years.

Rush officials, employees, and contractors also spoke up to counter the residents, portraying the $75 million as much-needed support for a venerable west-side institution. Without the money, they say, they won’t be able to undertake their $900 million project, which includes building a new emergency room, parking garage, and office building.

I realize it’s hard to criticize hospital funding without looking like Scrooge, and believe me, I appreciate doctors and nurses as much as the next person. But Rush is a private hospital with a $300 million endowment and wealthy board of directors. Only 7 percent of its patients are uninsured, as compared to 52 percent at nearby Stroger Hospital. It’s already the beneficiary of a huge tax break, in that it’s exempt from property taxes—so much for commercial development. And $75 million is a lot of money—about $30 million more than this year’s budget for the city’s health department. To look at it another way, it’s about three quarters of what was cut from the county’s budget last year, when more than 500 doctors and nurses were laid off at Stroger and clinics at the south side’s Provident Hospital were shut down.

Rush too had clout on its side. Its lobbyist was none other than Grossinger’s rainmaker, Terry Teele. And its vice president for government affairs is Terry Peterson, whose long resumé includes stints as 17th Ward alderman, head of the CHA, and campaign manager for Daley’s reelection last year. The day of the CDC’s approval was a great one for former aldermen and aides. But that’s tax increment financing—the gift that just keeps giving.

In the case of the Central West TIF, the gift will continue giving for some time. Remember, the city’s proposing to lift its ceiling to $250 million. After you take away Rush’s $75 million and the $98 million originally committed, that leaves another $77 million for the city to spend. My bet is that it will go to refurbishing the old Cook County Hospital. The planning department’s mapmakers made sure the old hospital was included in the district’s newly expanded boundaries—and there’s usually a reason, stated or not, for the way they draw the maps.

Not a bad use of funds, you might say, just as you might say of Rush’s $75 million. A word of caution: despite the ease with which the city spends it, this is not free money. In a nutshell, all you need to know about tax increment financing is that when the city creates a TIF district, it guarantees your property taxes will be raised. In the name of improving health services for the west side’s poor and working-class residents, the city is helping to tax them out of their homes.

If Chicago Caucused

On January 3 I went to Iowa to watch a Democratic caucus. What I saw there could never happen in Chicago.

In Iowa caucusers laid out free pizzas, cookies, chips, and sandwiches on a table under signs for their candidate near the front door of the meeting hall. They didn’t bother to guard it. In Chicago they’d have to post monitors at the table; otherwise rival campaigns would steal the food and tear down the signs.

Caucusers patiently waited in line to show registrars their IDs so they could enter the hall. In Chicago dozens of sharpie lawyers would scrutinize the signatures of rival caucusers, moving to disqualify them on the grounds that their signatures at the door failed to match the signatures on their voter registration cards.

Once in the room, the Iowa Democrats sat in their chairs and respectfully listened while a representative for each campaign made a short speech. In Chicago, rival camps would fill the room with boos and hisses.

After the speeches, the Iowa caucusers calmly walked to designated sections of the room, where they stood with their allies to be counted. As far as I could see, the campaigns didn’t monitor one another’s counts. In Chicago, the campaigns would accuse each other of cheating and demand recounts.

In Iowa folks remained cool and calm even after they discovered an error in the initial tally: 134 people had signed up to vote, but 135 had voted. It turned out someone from the Edwards campaign had been counted twice. The mistake was corrected and it was no big deal. In Chicago a miscount would have triggered cries of treachery, accusations of deceit, and maybe even fisticuffs.

As for the results, at the caucus I attended Obama won big. That’s one similarity: in Chicago Mayor Daley’s guy always wins big.   

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