Local government reps green-light Cortland TIF despite public doubt

After a Chicago alderman asserted that their duty is "crystal clear," a group of five bureaucrats gave the first governmental green light to a billion-dollar financing scheme to support the Lincoln Yards development on Chicago's North Side.

In a unanimous vote at City Hall, a state-mandated body called a joint review board (JRB) approved the Cortland/Chicago River tax-increment financing (TIF) district at a public meeting attended by about 80 people.

Audience members at the Jan. 11 joint review board meeting.
Photo: Dave Glowacz.

Ald. Brian Hopkins (2nd), in whose ward the TIF district and Lincoln Yards reside, strongly urged the board to approve the Cortland district.

The Chicago Dept. of Planning and Development has said that property taxes stockpiled by the TIF district would fund up to $800 million in public infrastructure—such as streets, bridges, water pipes, sewers, and transit—that would support real-estate development in the district. But a document released by the planning department shows that the TIF district could siphon off as much as $1.3 billion in property taxes.

According to state law, a JRB gives local taxing governmental bodies a forum in which to judge whether a proposed TIF district meets the state's eligibility criteria: that, but for tax-increment financing, property development would not occur in the area—depriving local governments of additional property tax revenue. But, in approving a district, the taxing bodies also agree to temporarily forego the increase in property taxes that the development would spur.

At the JRB's Jan. 11 meeting, 20 people spoke during a public comment period. Most questioned the need for the Cortland TIF district and/or urged the JRB to reject it.

Commenters reiterated some of the arguments against the Lincoln Yards development and the TIF district made at public meetings last November.

One such argument is that developer Sterling Bay, which one commenter said has already sunk $250 million into Lincoln Yards, would move ahead with the development—and pay for needed infrastructure improvements—without tax-increment financing.

"I just recently got the e-mails from Ald. Hopkins," said Ted Wrobleski, of the Sheffield Neighborhood Association, in which the city offered to pay homeowners half of the cost to rebuild their sidewalks. "To do the infrastructure right in front of their house, they pay half and the city pays half. Where is Sterling Bay's half?" Wrobleski said, to audience applause.

Commenter Judy Mansueto cited another concern of many residents: that the TIF district doesn't obligate the city—or Sterling Bay—to build and operate public parks within the Lincoln Yards footprint.

JRB members
Joint review board members (from left)
Tracy Bender, Chicago Board of Education;
Beth O'Reilly, Chicago Park District;
John Zukosky, City Colleges of Chicago.
Photo: Dave Glowacz.

Mansueto said that, at the city's Nov. 29 Lincoln Yards public meeting, "Sterling Bay offered to give the [open space] land to the Chicago Park District—and the park district declined."

In questioning why the park district might not want to take on additional park space, Mansueto invoked a common belief: that TIF districts don't just delay an increase in local governments' property tax revenue; rather, TIF can severely cut into such revenue. "Is it because you're gonna pass the TIF," Mansueto said, that the park district is "not gonna have enough money?"

Among the commenters were representatives from several of Chicagoland's building trade unions and associations, all of whom spoke in support of the TIF district.

JRB members
Joint review board members (from left)
Brendan White, city of Chicago;
Josh Ellis, Metropolitan Planning Council.
Photo: Dave Glowacz.

The governmental bodies that have a say in any Chicago-based TIF district—and therefore may sit on the JRB—are the city of Chicago, the Chicago Park District, the Chicago Board of Education, City Colleges of Chicago, the Metropolitan Water Reclamation District, and Cook County—because they each receive property taxes that Chicago TIF districts potentially divert. Representatives from the latter two bodies did not attend the Jan. 11 meeting.

State law requires that the JRB also include a "public member" who's not a government employee. Representing the public at the JRB meeting was Josh Ellis, vice president of the Metropolitan Planning Council (MPC), who said he's played such a role at the request of the city's planning department "a handful of times."

"This is something we've done over the years," Ellis said in an interview, "and it's a responsibility that we take seriously." Ellis said that, when acting as a joint review board's public member, he's never voted against a TIF district proposal.

Before and during public comment, planning department officials explained the need for, and approval process of, the TIF district. These officials were questioned by Ellis far more than by any of the governmental JRB members. In fact, representatives from the Chicago Board of Education and City Colleges of Chicago asked no questions—which at least one commenter noted.

"I am astounded," said Reatha Kay, president of the RANCH Triangle Community Conservation Association, "that some of the members whose budgets are hurting have made no comment."

Commenter Allan Mellis, president of Friends of Optimal Transportation, asked several questions about the TIF district, such as: Does the city have detail on how it will spend the TIF funds? What portion of the development area's infrastructure should developer Sterling Bay fund without TIF reimbursement? Would Sterling Bay build Lincoln Yards without tax-increment financing?

At the end of his questions, Mellis asked the board's chair, park district deputy budget director Beth O'Reilly, "Can I get answers to my questions?"

"No," replied O'Reilly.

Ellis, the board's public member, who'd asked city officials to respond to other commenters' concerns, remained silent.

In seeming contradiction, 2nd Ward Ald. Brian Hopkins, addressing the board later, said, "I urge the people in this room who have been participating all along to continue to stay with us on this, and ask your questions. Tell us what it is that you need to see before you can make up your minds."

Ald. Brian Hopkins (2nd) addresses the joint
review board, with Ald. Michele Smith (43rd)
on right. Photo: Dave Glowacz.

Hopkins also told the board that, while "there are still elements of this proposal that have yet to be determined," the board members' decision on the TIF district is "a very narrow one: Does it meet the eligibility criteria, period." Hopkins avowed that he is "someone who is urging you to conclude that the TIF meets the eligibility requirements today—and I hope you will do that."

Hopkins added, "Your statutory responsibility . . . is crystal clear."

Another commenter was 43rd Ward Ald. Michele Smith, whose ward adjoins the TIF district to the east. Before Smith addressed the board, she and Hopkins met privately in a hallway.

Smith, referring to Hopkins' earlier rejection of Sterling Bay's plans to include a soccer stadium and major entertainment venue in Lincoln Yards, said that "Ald. Hopkins has rightfully sent the proposed plans back to the drawing board. And, as the community has not had a chance to see the revisions, it seems quite premature to rush this along."

Sterling Bay's plans for the Lincoln Yards development is scheduled for review and possible approval by the Chicago Plan Commission on Jan. 24. Given that Hopkins told the JRB that he has "many questions" about Lincoln Yards that he has "not been able to get answers to sufficiently and successfully," a reporter asked Hopkins after the JRB meeting why he's allowed the development to go before the Plan Commission.

"Just to provide a motivating factor for both Sterling Bay" and city staff, Hopkins said, "to roll up their sleeves and produce the master plan that I've asked for . . . If they can submit this to my satisfaction, we'll allow for the hearing on the 24th. If not, we won't."

Even before then, Sterling Bay's proposed changes to property zoning for Lincoln Yards will be considered by the City Council's zoning committee on Thursday, Jan. 17.

The JRB's approval of the TIF district sets the stage for final passage by the Chicago City Council—which could happen in April, officials have said. Had the JRB not approved the TIF district, the council could enact it only if three-fifths of aldermen vote yes. Now, the council may pass the TIF with a simple majority vote.