"tif 101" - city bureau 7-6-17

July 6, 2017Tom Tresser

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Key Policy Questions

1. Under what circumstances do we give public $ to private

business?

2. Who plans what for whom? AKA, What defines

“community development”?

3. Is Chicago broke?

4. Who’s watching our back? Need for new leaders.

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The TIF Illumination Project

started in 2013.

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What are TIFs?

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What are TIFs?• Created by municipality (state law)

• Designed to subsidize some business project

in “blighted” or under-served area

• “But for” test – only for projects market CAN

NOT support

• Captures “incremental” property taxes ABOVE

base when district was created

• Only for hard costs

• Lasts 23 years

• Supposed to be spent where collected

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What are TIFs?

The Midwest TIF – 24th Ward

(created in 2000)

Say there

are 1,000

properties

in the

TIF…

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How Do TIFs Work?When the TIF is created,

the city tallies up all the

property taxes

generated by district in

that year (called the

"base" amount). After

that, all property tax

increases above the

base (the "increment")

are channeled to the TIF

district.

The property taxes

collected from

properties inside the

district BEFORE the

district was created

that go to units of

government stays

FLAT for the life of the

TIF (23 years).

B

A

S

E

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Money From TIFs Taken From?

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What are TIFs?

Under state law, areas proposed for TIF designation

must possess numerous blighting factors to be

eligible:

• Age

• Obsolescence

• Code violations

• Excessive vacancies

• Overcrowding of facilities

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TIFs Used to support commercial projects in these “Blighted” Areas

40 S. Halsted

Apple Store

14Better Government Association

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How Many TIFs?

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Where are TIFs?

2015

Chicago = 146

Suburbs = 293

Cook County = 439

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Mr. TIF

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To sum up:

TIFs = property taxes

Increment $ collected by TIF

Run by city (mayor)

Lasts 23 years

Blight & “But for” conditions

Hard costs

Supposed to be spent where

collected

TIF $ in Chicago’s Loop

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123 S. Dearborn Street –

Dearborn Center

32 W. Randolph Street –

Oriental Theater

1 N. Dearborn Street - Sears

TIF $ in the Loop

188 W. Randolph Street –

Randolph Tower

Apartments

230 N. Michigan Avenue –

Hard Rock Hotel

555 W. Monroe Street –

PepsiCo

TIF $ in the Loop, Near West Side

TIF FUNDS IN THE 46th WARD Lincoln

Park

Where are Parks MOST Needed?

TIF Funds in the 3rd Ward

UPDATE - $55 MILLION TIF

FUNDING SHIFTED FROM

DePAUL STADIUM TO

MARRIOTT HOTEL .

PIER AUTHORITY TO PUT UP

$100 MILLION FOR

STADIUM PROJECT.

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$17.1 billion revenues in 2016

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TIFs hoard taxes

in prosperous

communities –

starve poor

communities.

1. They further inequality in chicago.

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Authors plead "Our

message is simple:

'Please, please, if you're

going to offer incentives,

don't give them to every

firm that asks -- Don't!

Ninety percent of the

time they don't work, and

handing them out after a

company has already

located in an area

without them makes no

sense at all."

Let’s Get Local…

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Woodlawn TIF

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• TIF #065

• Created 1999, Expires 2022

• Property tax extraction in 2015 = $2,298,703

• Total extraction to 2015 = $31,792,116

• Spent 2015 = $1,263,697

• Transfers = $1,263,697 (to 71th/Stony Island

TIF to pay down 2007 Bond Series, Modern

Schools Across Chicago construction)

• Dept. of Planning siphoned off $62,781

• Balance at end of 2015 = $11,175,872

• Ward 20 = Alderman Willie Cochran

https://www.cityofchicago.org/city/en/depts/dcd/supp_info/

tif/woodlawn_tif_.html

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Biggest Project – Strand Hotel

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Holsten investing

$10,000 and his fee is

$1,000,000. Nice.

Bank makes $950,000.

Architect = $778,218.

Lawyers = $575,000.

Nice.

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62 units created by spending

$22.9 million = $369,355 each.

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$343,930 to Chicago elected officials since 1994.

$54,500 to Alderman Ed Burke since 2002.

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www.tifreports.com

www.wearenotbroke.org

www.civiclab.us/training

tom@civiclab.us

312-804-3230