When I heard that Mayor Emanuel intends to spend $55 million of your property tax dollars to build a hotel and basketball arena on the near-south side, I thought it must be a cruel joke he’s playing on the people of Chicago.
Sort of like the way a sadistic little boy will pull the wings off a fly—just because he can.
Let’s start with the mayor’s timing. His grandiose announcement came about a week before the May 22 meeting at which his school board appointees are expected to vote on closing 54 schools.
The closings have been opposed by students, parents, teachers, and, in a number of instances, the Chicago Public Schools’ own hearing officers. These opponents consider the plan wasteful, hasty, unwise, counterproductive, and dangerous. Other than that, it’s great.
As I write, protesters have taken to the streets in the hopes that angry demonstrations will accomplish what crying, begging, pleading, and reasonable argument haven’t: convince the mayor to change his mind.
So far, no luck. The mayor says he has to close the schools because the city’s too broke to keep them open. Tough times requiring tough measures, and all that.
Of course, as broke as we are, there’s still $55 million lying around to buy up some land and hand it over to private entities that don’t need it.
Because there’s the kind of broke that means we don’t have any money for schools, and there’s the kind that means we don’t have money to subsidize the rich and powerful. We haven’t come close to reaching that second kind of broke—and probably never will, so long as this mayor’s in charge.
The $55 million will come from tax increment financing districts near McCormick Place. That gives me a chance to discuss a topic I love almost as much as Derrick Rose’s left knee—the great scam known as the city’s TIF program.
At its essence—if I give it the best possible spin—the TIF program lets the mayor take property tax dollars from the schools, parks, and county in order to invest the money in projects that he hopes will someday generate even more property tax dollars.
Think of it like pulling ten bucks out of your paycheck and investing it in Starbucks stock. In several years, if all goes well, your $10 may have grown into $100. Incidentally, if you do this several thousand times over, you might get wealthy enough to become one of the few people the mayor makes time to meet with—unlike, for example, everyone else who lives in Chicago.
In the case at hand, Mayor Emanuel has decided to take the $55 million and buy some property on which he’ll build the aforementioned hotel and basketball arena.
But once the city owns it, this land will move off the property tax rolls because publicly held property is exempt. So instead of investing your property tax dollars in developments that create more property tax dollars, Mayor Emanuel has decided to invest them in a scheme that will yield no property tax dollars whatsoever. Think of it as spending $55 million to lose money.
Just so you know, the land in question, near the intersection of Cermak and Prairie, is not blighted property that no one wants. Which, by law, is what TIF funds are supposed to be invested in.
And even before the mayor announced a TIF handout, developers were already over there clamoring to build things like hotels and retail and tech centers. In other words, had Mayor Emanuel just stayed out of the way, the area would have boomed on its own, bringing in more money for the schools, parks, and county.
As my libertarian friends might put it, the mayor is crippling capitalism by intervening in a free market. Quick—tell the people at the University of Chicago who worship at the shrine of Milton Friedman, their beloved free-market guru.
Oh, wait—the University of Chicago has its own hand in the TIF cookie jar, as it’s counting on public funds to subsidize a deal for a Hyatt Hotel on 53rd Street.
To paraphrase Mr. Friedman: lunch is always free, so long as the taxpayers pick up the tab.
And what do you, the taxpayers, get for this $55 million?
You get a hotel that you’ll probably never stay in. And an arena for DePaul basketball games that you’ll probably never attend. Because let’s face it—there are even fewer fans of the Blue Demons in this town than of the White Sox, who also play in a subsidized facility that doesn’t often fill up.
Since the deal costs $55 million, we’ll have less money to spend on schools. Which means most of them will still go without music, art, drama, intramurals, or reduced class sizes.
At this point, I should remind everyone who doesn’t know that DePaul is a private university with tuition costing more than $30,000 a year for undergraduates. That means it’s a long shot for average Chicagoans, unless they’re willing to go into severe debt to pay for it.
It’s also a Catholic school. I mention this because it ties in with another of my favorite topics: the curious attitude of the mayor and his allies toward Catholic institutions.
Earlier this month, Cardinal George joined forces with rabbis, imams, ministers, and priests to call on Mayor Emanuel to bring back the water fee exemption he stripped from nonprofits, including soup kitchens and shelters that serve the poor. In response, the mayor’s City Council floor leader, Alderman Patrick O’Connor, ripped into Cardinal George, telling him to mind his own business.
What this all means is that Catholics who serve the poor should shut up, while those who serve well-off suburban kids are rewarded with money for a basketball arena.
This might be an interesting topic of discussion in a theology class at DePaul or Loyola University, which received its own $50 million or so in TIF funds a few years ago.
I’ll also note that a little more than half of every TIF dollar—in this case roughly $28 million—comes from the Chicago Public Schools.
So there’s always a chance that the board of education—which is charged with looking out for the fiduciary health of the schools—will use its clout to try to kill this deal on the grounds that there are better ways to use $55 million.
At the very least it’s something to think about as the mayor’s appointees say they have no choice but to close the schools.