Where TIF Dollars Go and Where They Don't | Bleader

Thursday, May 20, 2010

Where TIF Dollars Go and Where They Don't

Posted By and on 05.20.10 at 10:15 AM

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Under Mayor Richard M. Daley, tax increment financing has been the city's primary economic development tool. More than $500 million of property tax revenues are siphoned into the program each year, but unlike the money directed into the city's other budgetary funds, TIF money is controlled by the mayor and distributed with little public awareness or oversight.

And as this week's cover story points out, TIF money isn't reaching many of the neediest parts of the city. In fact, Chicago's economic disparities may even be widened by the program.

From 2004 to 2008 the city spent about $1.5 billion through the TIF program. The three wards downtown—the 2nd, the 27th, and the 42nd—received about $626 million, or 43 cents of every dollar spent. The rest was divvied up among the other 47 wards, with some of the neediest getting almost nothing.

We recently toured the wards that received the most TIF dollars as well as some that were largely shut out. Here's what we saw. Photos by Sam Adams.

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The 27th Ward, which covers much of the near north and near west sides, has been one of the biggest winners in the TIF game—the city spent about $240 million in TIF funds there between 2004 and 2008. The infrastructure improvements TIF money paid for included new sidewalks, decorative street lamps, planning for a proposed new Green Line station at Lake and Morgan, and (above) a new traffic signal at Washington and Aberdeen, right next to Oprah Winfrey's production facility.


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The city also used TIF money in the 27th Ward to upgrade the housing stock and relocate poor people. Up until 2006 a homeless shelter run by the Chicago Christian Industrial League stood at the site above, but the city spent more than $2.5 million in TIF funds to tear it down and help the league move to Roosevelt and California, an impoverished area on the west side. In its place developers led by Michael Marchese, a friend of Mayor Daley's, built this new condo building.


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The Second Ward was the biggest beneficiary of the TIF program from 2004 to 2008, when it received about $358 million in TIF-funded investment, or a quarter of what was spent citywide. Yet the money didn't go into the portions of the ward that were in the worst shape, including this stretch of West Lake Street, where entire blocks are taken up by abandoned buildings and vacant lots. It's within the Kinzie Industrial Corridor TIF district, which had about $60 million in its bank account at the end of 2008.


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Also on West Lake Street in the Kinzie Industrial TIF: an abandoned limo that someone has turned into a home . . .


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. . . and a lot the city bought in 2004 using about $126,000 in TIF funds.

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The city also used the TIF program to get rid of a homeless facility in the gentrifying South Loop. In 2006, after a seven-year court battle with the owner of the New Ritz, an SRO hotel at 1007 S. State, the city bought the building and told residents they had to move elsewhere. About a hundred of them were given $475 apiece in TIF funds to help them on their way. The property is now vacant. So far all this has cost taxpayers more than $2 million in TIF money.

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Between 2004 and 2008 about $400,000 in TIF money was spent on redeveloping the ailing shopping district at 63rd and Halsted in the heart of Englewood. The district is now anchored by the new campus of Kennedy-King City College, which opened in 2007, but the shopping options there remain limited to fast-food restaurants, beauty supply outlets, and dollar stores.

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And when the college moved it left behind another set of unused buildings. After sitting vacant for two years, the old Kennedy-King campus, at 69th and Wentworth, is now being torn down at a cost to taxpayers of $6 million. City and City Colleges officials haven't announced any plans for the property.



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The 15th Ward, which covers much of West Englewood, got about $33,000 in TIF money from 2004 to 2008, just 0.002 percent of all the TIF funds spent in that time. But it's undeniably one of the places in the city most in need of an economic shot in the arm. In many depressed neighborhoods the most successful businesses are liquor stores. In West Englewood even liquor stores are boarded up.

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And so is the office of a defunct economic development corporation that Congressman Bobby Rush founded in 1996.

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In 2006 the city created a TIF district, the 63rd/Ashland, to spur development in West Englewood. But since the district is new and property values are so low, it hasn't had any impact. Not a dime in TIF money was spent there from 2006 through 2008, and the city plans to spend just $1.8 million by the end of 2011, most of it for unspecified "neighborhood improvements." About $40,000 will be used to demolish two of the dozens of vacant buildings in the neighborhood, including the one above at 6826 S. Ashland.

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