Almost 20 years ago a businessman and former NBA basketball player named Mickey Johnson gave me a tour of his west-side community, taking me down block after block of dilapidated and abandoned buildings and vacant lots. He contended that the powers that be, the city included, had let the area fall apart so that one day they could reclaim it on the cheap and replace the poor black residents with wealthier whites.
At the time I wrote off his theory as improbable. Now I think it might not be so far-fetched after all.
At the January 9 meeting of the Community Development Commission, the city’s planning department proposed the sale of 54 vacant parcels the city owns on the west side: 15 lots on the south side of the 2500 block of West Warren and 39 lots scattered along the 2700, 2800, and 2900 blocks of Lexington and Flournoy streets. The CDC was overseeing the proposed deal because the vacant lots are located in a couple of tax increment financing districts, specifically the Midwest TIF and the Western-Ogden TIF. The CDC, a board appointed by the mayor, oversees all activity in TIF districts.
As TIF-district deals go, the west-side land sale seems innocuous. It’s not a corporate giveaway, like the $880,000 the CDC forked over last month to Barry Callebaut, the world’s largest chocolate manufacturer, so it could move its corporate headquarters to the Montgomery Ward Building at 600 W. Chicago. And it’s not based on an outlandish distortion, as when the city stretched the definition of “blight” to qualify the West Loop for TIF funds, which by state law are supposed to be reserved for low-income areas that would otherwise be unable to attract development. East Garfield Park and North Lawndale, where the lots in question are located, would seem to be textbook cases of communities meriting TIF support. Except the city won’t be using TIF money to develop these lots. The city says investors in these projects don’t need to be lured there by TIF subsidies–the area’s drawing interest from developers with or without handouts.
According to testimony by city planners at the CDC meeting, the lots on Warren are part of what real estate agents call the West Haven community, which has undergone a steady rejuvenation in recent years, thanks largely to the removal of the Henry Horner Homes. “TIF assistance will not be provided for the project on Warren,” city planner Mark Monzer told the commission. “In fact, a TIF-assisted project will not be favorably considered.”
If all goes according to plan, the land on Warren will be sold for about $1.9 million to a developer who will build a complex with about 54 condos (some affordable, most market rate) and first-floor retail operations like dry cleaners or coffee shops. The lots on Flournoy and Lexington will be sold for about $4.9 million and used for two-bedroom condos and single-family homes fetching as much as $625,000. Thus vacant, tax-fallow land will be transformed, the city will rake in about $6.8 million, and new property tax dollars will eventually flow to the schools, the parks, and other civic institutions that desperately need them.
What could be wrong with that? Nothing, maybe. It could be that the city will use the TIF funds for projects so worthy that years from now we’ll be applauding a job well done.
But with TIF deals it pays to be skeptical. For starters, property taxes generated by these new developments won’t start flowing to the schools and parks until 2021. TIF districts have terms of 23 years, during which time all new property tax revenues generated by development get diverted into a fund largely controlled by Mayor Daley and the local aldermen, in this case the Second Ward’s Madeline Haithcock. Most of this property is in the Midwest TIF, which was created by the City Council in 2000 and has already soaked up about $18.5 million in property taxes. The Western-Ogden TIF, which covers some of the other lots, was created in 1998 and has taken in about $9 million.
When city officials created the two TIFs they argued that they intended to use them to “leverage private investment.” Clearly things have changed: the city itself is saying that this land will be developed with or without a TIF subsidy. If TIF funds aren’t needed to generate private investment, why not revise the bounds of the TIF district and let newly created property tax revenues flow back to the parks and the schools? It’s not unheard of for TIFs to be amended. To take just a few examples, the City Council changed the borders of the Pilsen, Milwaukee-Fullerton, and Central Loop TIFs. The answer, as any politician in City Hall can tell you, is that TIFs are not only about leveraging investments. They’re also about creating a steady stream of money for slush funds the mayor and aldermen can dip into at will.
It’s not clear what the plans are for the $27.5 million already sitting in the Midway and Western-Ogden TIFs–most of that money is being held in reserve. But as those pots fill up with property taxes, parts of the area are becoming prosperous enough to redevelop without them. As the area continues to gentrify, who stands to be the largest beneficiary of the TIFs? Not the poor people who will likely be displaced in the process.
So far there hasn’t been a community hearing on the proposed lot sales, and the city’s plan hasn’t been raised as an issue in Haithcock’s heated reelection battle. That may change. Wallace Davis, one of six candidates running against Haithcock, says he plans to “raise hell” about the sales, which he sees as nothing more than an old-fashioned urban-renewal land grab.
Davis, a former 27th Ward alderman who served four years in prison for bribery and extortion before becoming a successful businessman, also thinks the city’s selling the land for less than it’s worth. “They’re getting, what, $34, $36 a square foot for that?” he says. “Hell, vacant lots go for about $40 a square foot around here.” Davis owns several pieces of west-side property, including Wallace’s Catfish Corner, his restaurant at 2800 W. Madison, just down the street from the lots on Warren. “They’re not selling the west side, they’re giving it away,” he says. “And they sure ain’t doing it to help poor folks.”
Without much discussion or debate, the CDC commissioners approved the city’s request to sell the west-side lots. Then they moved on to the next item on their agenda: the proposed creation of yet another TIF district.
For more on Chicago politics, see our blog Clout City at chicagoreader.com.
Art accompanying story in printed newspaper (not available in this archive): photos/A. Jackson.