Taking Advantage of TIF Ignorance | Politics | Chicago Reader

Taking Advantage of TIF Ignorance 

Is someone using the proposed North Pullman TIF to scare the neighbors into selling cheap?

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Not long ago, I got a call from my old friend Gaylon, whose grandparents live on the far south side.

"They got this weird packet from the city about a new TIF," she said. "As soon as I saw it was about a TIF, I knew I had to call you."

A few days later we met at a north side coffee shop and she showed me the packet. I've been covering TIFs for a long time now, and I've seen and written about plenty of stinker deals. But I've never seen anything like what she showed me: four pages apparently extracted from a city planning document without an explanatory cover letter or anything else offering context. It was entitled "Exhibit G—Notice of Availability of Plan."

Even the envelope looked odd. The return address read: "North Pullman Availability of Plan/Chicago Department of Planning"—even though the Department of Planning changed its name to the Department of Community Development in January. Plus it didn't have a postmark, suggesting that it hadn't gone through the post office at all.

Written in virtually incomprehensible legal jargon, the packet began: "Notice is hereby given, pursuant to Section 5/11-74.4-5(a) of the Illinois Tax Increment Allocation Redevelopment Act, as amended (65 ILCS 5/11-74.4-1 et seq.) (the 'Act'), that a proposed redevelopment plan of the City of Chicago (the 'City') has been prepared for the proposed North Pullman TIF Redevelopment Project Area."

With the help of a map, it seemed to indicate that the proposed district would cover a large swath of land around 103rd and Cottage Grove. But the packet also included some things that aren't part of typical TIF proposals—like printouts from the real estate Web site cyberhomes.com that included a satellite photo and description of Gaylon's grandparents' house, a single-family bungalow near 103rd and King Drive.

It included no information about whom to contact for an explanation.

"What the hell is this all about?" Gaylon asked me.

The packet had scared her grandparents. Years ago the city forced them to sell their property in Englewood as part of an urban renewal project; they wanted to know if this meant the city was going to make them move again. "They're in their 90s," she said. "They definitely don't need this."

TIF districts do indeed give the city eminent domain authority over the property within the district, making it easier to force people to sell their homes. Last year I saw a group of North Lawndale residents—many of them seniors—show up at City Hall to protest a proposal that would compel them to sell their homes to make way for an unspecified new development. So far that plan hasn't come to fruition.

I took up the question of the packet with Molly Sullivan, a spokeswoman for the Department of Community Development. Sullivan said she didn't know anything about a mailing, but that the North Pullman TIF district had been proposed by Ninth Ward alderman Anthony Beale to help pay for the redevelopment of the old Ryerson Steel property, at 103rd Street just off the Bishop Ford expressway. Ryerson ceased operations there in 2006, but most of the 220-acre site had been empty and unused for years before that.

Beale also told me he hadn't heard about the mailing until I called. "If something like that is out there, it's very troubling," he said. "We'll get to the bottom of this."

Over the last few years Beale has floated a number of ideas for redeveloping the property, which is owned by Park National Bank. Current plans call for a mixed-use community of houses, industry, and shopping anchored by a big-box retailer. The North Pullman TIF would circle the site and stretch down 103rd to Indiana Avenue, where it would connect with the existing Roseland/Michigan TIF district. It would also abut the Lake Calumet Industrial TIF district—meaning that as it tried to bring retail to the Ryerson site the city would be able to use money originally intended to revive business on a three-mile stretch of South Michigan Avenue or build factories in Lake Calumet. That's because state law allows for funds to be "ported," or transferred, from one TIF district to an adjacent one.

Merchants on Michigan might be surprised to find that tax dollars collected to redevelop their neighborhood business strip could instead be used to put them out of business by subsidizing a Wal-Mart. Beale, though, insists the opposite will happen: the redeveloped Ryerson site will generate money that can be pumped into the South Michigan strip. Next Tuesday the new TIF proposal goes before the Community Development Commission, a board appointed by the mayor that reviews and approves TIF plans, typically with minimal debate.

Sullivan called me back the day after we first spoke to confirm that the packet Gaylon's grandparents had received was bogus. "I have talked to people here and this is not from the City of Chicago," she said. "If people are sending this to people representing that they're with the city it's a fraudulent document." She said that the city had already sent official notification of the proposed TIF district to residents who live within or adjacent to it, as required by law, and that it would investigate the origins of the fraudulent mailing. Neither Gaylon's grandparents nor others I spoke to who live in the area could remember getting the official notice from the city.

As I listened to Sullivan, a light bulb went on in my head. Perhaps someone had the idea that if the city was going to funnel millions of property tax dollars into a project to build $300,000 houses and a Wal-Mart it might not be a bad idea to get the folks on nearby blocks to sell their homes. Buy them cheap now, while the housing market's low, and they'll be worth a lot more when the new development comes—like a south-side version of Chinatown, where the John Houston character buys up land in the desert just before Los Angeles builds the dam that will bring in the water he'll need to develop it.

With Gaylon's grandmother's permission, I faxed the packet to Sullivan.

Then I called one of the neighbors of Gaylon's grandmother—a 74-year-old woman—to see if she'd received a similar packet. She said she didn't think so, but she couldn't say for sure. She might have thrown it away with the junk mail. But she was worried about what her neighbor's packet might mean.

"It's connected to a TIF," I told her.

"What's a TIF?" she asked.

I was set to launch into my standard explanation about how TIFs freeze the existing property tax revenues in the district for 24 years and funnel any new revenue into a fund . . . but then decided to cut to the chase. It's essentially a property tax hike where the city puts all the new money it collects into a bank account controlled by the mayor, I told her.

"And what does he do with it?" she asked.

"Pretty much whatever he wants," I said. "I'm guessing it's how he's going to pay for the Olympics if we get them."

There was a pause, and then she said: "Oh."

In this instance, I continued, Daley and alderman Beale want to use the money to redevelop the old Ryerson site—perhaps to put a Wal-Mart there.

I thought that might win her over, but all she said was: "Am I in imminent danger of losing my house?"

"No," I said. And then I reconsidered. "Well, the city says they have no plans to take any residential property. But I learned a long time ago not to believe everything the city tells you about TIFs. You'd better keep your eyes open on this one—just in case."

Ben Joravsky discusses his weekly column with journalist Dave Glowacz at mrradio.org/theworks.

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