On January 12 I headed over to City Hall to see firsthand if the spirit of reform that’s supposedly transformed the Emanuel administration since the release of the Laquan McDonald video had reached the Community Development Commission.
The CDC is a 15-person advisory body appointed by the mayor to oversee tax increment financing deals. As such, the chief challenge for commissioners is to pretend they’re dedicated watchdogs of the public purse while making sure they actually do what the mayor wants.
I’m sure it’s not as easy as it looks.
On the agenda for this meeting is the Montrose/Clarendon plan. Emanuel’s proposing to give about $16 million to developers so they can make a fortune building approximately 630 upscale apartment units in Uptown, just west of Lake Shore Drive.
Not that there’s anything wrong with developers making a fortune. I’m hoping to make a fortune one of these days myself. It’s just that we have other things we could do with the money, what with the schools being broke and everything.
The hearing opens with city planner Mary Bonome’s explanation of the project.
JDL Development and Harlem Irving Companies are proposing to build two towers—one 26 stories and the other 16—of high-end apartment units at Montrose and Clarendon. The land’s currently occupied by Cuneo Hospital, which has been vacant and boarded up since 2005.
Community opposition helped kill two previous proposals for developing the land, including a plan by different developers to build 30- and 40-story towers on the site.
But JDL and Harlem Irving reduced the size of their towers—and the amount of their TIF request—after months of negotiations with 46th Ward alderman James Cappleman and his local land-use committee.
Many community groups have now endorsed the current plan, Bonome says.
From there Bonome moves to a discussion of the project’s property tax ramifications.
Alderman Cappleman hails this as a good deal for Chicago. I make a note to never buy a used car from Alderman Cappleman.
Uh-oh, let’s pause for an explanation.
When a TIF district is created, the amount of property taxes paid to the schools, parks, and other taxing bodies is frozen for 24 years. During that time the additional taxes paid by property owners are supposed to be used to subsidize new development in the district.
Currently the land in the Montrose/Clarendon TIF district generates no property taxes, because its owners, a society of nuns, used it for a hospital.
But as soon as the developers buy the land from the nuns, they will have to pay property taxes.
Essentially the city wants to let JDL and Harlem Irving take the property taxes they’d otherwise pay to schools, parks, etc., and spend it building their apartment complex.
Think of it this way: If you called up Mayor Emanuel and said, “Hey, big guy—I don’t think I’ll pay my money to the schools this year. Instead, I’m going to use it to repair my garage.”
Well, maybe if you hire the right lawyer.
Back in the meeting, Bonome calls on another city planner, Chip Hastings, to explain that when the Montrose/Clarendon TIF district eventually dissolves, the property will generate about $2.2 million a year in property taxes, much of which will go to the schools.
Unfortunately, the TIF district won’t dissolve until 2034. Thus the schoolchildren who will benefit from this deal have yet to be conceived.
As for current students? Tough luck, kiddies.
Eventually the commissioners must confront the tough question: If the TIF weren’t granted, would the land be developed?
For an answer Bonome calls on James Letchinger, one of the developers. He says that, contrary to what you might think, this is a very risky venture, and TIF money is needed “to make the project feasible.”
However, Letchinger offers no specifics to justify his assertion. It amounts to a “just trust me on this one” argument.
But that seems to satisfy the CDC members, none of whom insist that he back his claims with numbers.
In fact, David Reifman, a CDC member, took this point a step further, as he peppered Hastings with questions along the lines of:
Reifman: Is the land currently generating taxes?
Hastings: No.
Reifman: Will it generate taxes after it’s developed?
Hastings: Yes.
The underlying premise in this exchange—that the land will generate taxes only if the TIF is granted—is that no developer would buy or develop the land without a subsidy.
That’s the same line the city’s stuck to for five years without any sort of objective supporting analysis.
If the mayor and his planners were running the financial aid office at the University of Illinois, it would be scholarships for everybody—no FAFSA required!
By the way, Reifman’s an ex officio member of the commission by virtue of his position as commissioner of the Department of Planning.
As such, he’s Hastings’s boss. So it’s not like he’s extracting damaging testimony from a hostile witness. It’s more like that scene in Bananas where Woody Allen plays a lawyer who cross-examines himself.
When it’s his turn to talk, Alderman Cappleman notes that according to the deal the developers will pay $4.6 million to fix up the Clarendon Park field house.
In effect it will cost taxpayers about $16 million to make $4.6 million worth of repairs to the field house.
Alderman Cappleman hails this as a good deal for Chicago. I make a note to never buy a used car from Alderman Cappleman.
Then the commission turns the meeting over to the audience for questions or comments. By my count, seven speak in favor and 20 against the proposal.
Opposition comes from activists who think at the very least the developers should be forced to dedicate more of their units for affordable housing.
Eventually the CDC voted unanimously to recommend that the City Council approve the deal.
As the hearing concludes, activists chant: “Shame on you!”
Apparently Chicago’s still not ready for reform—at least not when it comes to the CDC and TIFs. v