Chicago officials take a page from Trump playbook to justify Navy Pier TIF ‘shell game’ | Bleader

Thursday, July 27, 2017

Chicago officials take a page from Trump playbook to justify Navy Pier TIF ‘shell game’

Posted By on 07.27.17 at 02:50 PM

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click to enlarge Rendering of the renovated Navy Pier - ADRIAN SMITH + GORDON GILL ARCHITECTURE
  • ADRIAN SMITH + GORDON GILL ARCHITECTURE
  • Rendering of the renovated Navy Pier

City officials are attempting to explain away allegations of "an elaborate financial shell game" in what has become the Emanuel administration's latest TIF scandal, which I've taken to calling "Piergate." Their rebuttal is straight out of the Donald J. Trump playbook: attack your critics, exaggerate your triumphs, and then babble some gobbledygook to confuse everybody.

The controversy, which is roiling the City Council, stems from a joint investigation by Crain's and the Better Government Association that revealed $55 million in TIF funds the city said was going toward a South Loop development that includes the Marriott Marquis hotel and Wintrust Arena wound up being diverted to Navy Pier's renovation project. (TIFs, remember, are intended to eradicate blight in poor neighborhoods, and Navy Pier is not blighted, poor, or a neighborhood.)

The story's stunning revelations prompted Metropolitan Pier and Exposition Authority CEO Lori Healey and Chicago Department of Planning and Development commissioner David Reifman, two mayoral allies, to pen a tortuous defense of what the report establishes is "bookkeeping jiujitsu [that] appears to violate the spirit, if not the letter, of the controversial tax-increment financing program."

At the heart of the Crain's/BGA investigation into Piergate are e-mails, which enterprising reporters John Chase and Danny Ecker received through Freedom of Information Act requests, written by officials from the MPEA, the city-state entity known as McPier that runs McCormick Place and Navy Pier.

In one particularly revealing e-mail, MPEA's then-CEO Richard Oldshue writes: "None of this TIF money comes to MPEA as incentive of otherwise. The city is aggregating balances from various existing districts as they become available to transfer funds to MPEA which we transfer in full to [Navy Pier]. We don’t keep any."

Oldshue gets even more precise. "Nominally, [we’re] receiving $55 million from TIF to reimburse hotel project costs but that's just the bookkeeping for requesting the transfers. Ten days after MPEA receives the money we pass it along in full to [Navy Pier] . . . It's a one-time arrangement that we are just a middleman in. We don't actually get any funding.”

If I were a lawyer cross-examining Oldshue in court, at this point I'd say, "I'm sorry, Mr. Oldshue, I'm hard of hearing—would you please repeat that last line?"

And he'd say: "We don't actually get any funding."

Then with a wink at the jury, I'd say, "No further questions." And the judge would say: "The witness may step down". (Obviously I’ve watched one too many episodes of Better Call Saul.)

Healey and Reifman must've drawn the short straws, because the job fell to them to convince the public that what we all see is not really what we all see. Or as Richard Pryor once put it: "Who you gonna believe—me or your lying eyes?"

In their letter to Crain's, Healey and Reifman began by bashing the reporters for "failing to understand the typical approach to how the city expends TIF funds." (God help us if this is typical.) They also wildly exaggerated "the enormous public benefits" of the hotel and Navy Pier project, and boldly declared: "In short, no TIF funds were diverted to Navy Pier."

Got that, Chicago? Just run along, 'cause there's nothing here for you to see.

As Healey and Reifman explain it, MPEA "advanced" $55 million for the hotel project. Then the city "contributed" $55 million to MPEA as "a reimbursement." And then, and only then, did MPEA "have sufficient funds to support" other "projects, including a capital investment in the improvement of Navy Pier."

Hmmm. That sure sounds like a roundabout way of saying, in legalese, the same thing Oldshue had written in his e-mail.

"While somewhat complicated, this type of funding source and cash flow timing scenario is not fiscal trickery nor sleight-of-hand," Healey and Reifman write. Ultimately, the letter from the mayor's minions echoes the message the Emanuel administration communicated to the people of Chicago in a 2012 video called "What's a TIF?": TIFs are hard and you are dumb, so don't worry your pretty little head about it.

The apparent context for Piergate is that Rahm wanted to spend way more than he cared to admit for these vanity projects. But instead of coming out and saying so, he got slick. He said we desperately need $55 million for the hotel, otherwise it won't get built. And he said almost nothing about how much the Navy Pier job was going to cost—or how it would be paid.

The South Loop TIF deal broke in 2013, when many of us were up in arms over Rahm closing schools and mental health clinics. If the mayor had made it clear he needed all those millions for the hotel and Navy Pier, the outcry would've been even louder than it was. So Rahm kept quiet because he wanted it all—the hotel and the Navy Pier renovation. He shouldn't have gotten anything until he'd first taken care of public safety, the schools, and mental health clinics—the things that matter most to the city.

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