The Money Tree: My Thoughts on TIF and Mayor Johnson’s $1.25 Billion Dollar Economic Development Plan

Since February, I have been attending the Committee on Finance meetings in Chicago, virtually as a Documenter with City Bureau’s’ civic program, and have witnessed what seems like a miracle until a bit of digging is applied. These meetings mainly cover the municipal government allocating funds towards community development projects and handling settlements, primarily centering around the Department of Housing, Department of Planning and Development, Department of Law, and, of course, the Department of Law. According to the Chicago City Clerk’s website, the Committee on Finance “The Committee on Finance shall have jurisdiction over tax levies, industrial revenue bonds, general obligation bonds and revenue bond programs, revenue orders, ordinances and resolutions, the financing of municipal services and capital developments; and matters generally affecting the Department of Finance, the City Comptroller, City Treasurer and the solicitation of funds for charitable or other purposes on the streets and other public places.” In layperson’s terms, they are who developers go to to get funding for large projects, mainly through tax incremental financing. During these last few months, I’ve witnessed over 48 million dollars in funds go out of affordable housing projects, renovation of schools and parks, transformation of institutions to community centers, and other things that flew over my head yet made me wonder if money grows on trees.

The committee comprises our elected officials, called alderpersons, who vote to approve these different items that utilize TIF funds towards the completion of these projects. I heard about TIF funds for the 1st time in 2018 when I became a member of the Resident Association of Greater Englewood and saw how community stakeholders used these funds to make visions about creating new businesses, and community centers a reality. It wasn’t until this year that I saw the politics in action as these meetings are when community developers, architects, and nonprofits present their projects to the city in hopes of funding these ventures. Boy, was I surprised at how easy it seemed. In 3 months, I witnessed not hundreds of thousands, not millions, but over a billion dollars worth of funding get leveraged by our alderman and got to watch my version of C-Span while my eight-month-old listened to Gracy’s Corner on loop. In February February, $37150000 was approved; in March, $6708817; and in April, $9000000 was approved through new TIF funds, and this didn’t include the committee voting to approve 1.25 billion dollars in funding based on Mayor Brandon Johnson’s Housing and Economic Development Bond that would be replacing TIF funds as a mechanism for funding community development plans.

So, with the billion-dollar bond aside, I still witnessed the alderman essentially approve every project virtually unanimously, with a total of 7 projects, not including loan restructuring ordinances and funding through non-TIF programs. In February, three projects in the 21st, 26th, and 27th wards (High School in the 100s, old bank in Humboldt Park, and Former Cabrini Green Complex in Near Northside) all were commendable plans to renovate communities by leveraging institutions that locals have a familiarity with. In March, the four projects in the 7th, 11th, 15th, and 40th wards (improvements at multiple parks throughout the city and transforming a former school into affordable housing in Englewood) used existing infrastructure and community amenities. The sole project approved in April was in the 28th ward and involved bringing more affordable housing in North Lawndale, bringing subsidized housing together with the Ogden Commons project. Each month, I saw every accountable alderperson already on board with these projects, with one consistent voice of criticism: Vice Chair Alderman Bill Conway. Conway seemed to have a fiscally acute eye constantly asking about the interest rate. At the same time, most alders spoke on the social impact of these projects and the promises they brought to the community they were being developed in.

My idealist vision mainly saw these projects as a positive, especially when I recognized the Charles Earle Apartment Project in Englewood on the agenda since that is something I had heard many community members of mine speaking of when it came to what was to be done with the surplus of closed schools we had in our community. These initiatives span back to former mayor Lori Lightfoot’s Invest South/West program that targeted historically disinvested communities with a laser focus on funding community development projects. Just based on these three months, the exact amount of TIF funding is $52858817.91, and if you were to project that out to a whole year, it would be $211435271.64, and if you were to compare it to Mayor Johnson’s $1.25 billion it would be less at $1057176358.20 over five years. Suddenly, the Mayor’s billion-dollar bond plan doesn’t seem like such a drastic change in what our city is currently funding. My critical mind tingled as I sat through each meeting, as Vice Chair Conway’s constant questions about interest rates and the other alders’ worries that the TIF funds would dry up gave me more of an insight into what type of conversations happen in the executive sessions that the Open Meetings Act doesn’t protect.

Prepping for the April meeting, I was given more than the agenda and the meeting start time before attending the conference. City Bureau’s Civic Reporter, India Daniels, equipped us with an article by Michael McDevitt that went over “several new provisions related to transparency, fiscal responsibility, and council authority over spending of the proposed bonds proceed,” as well as how these bonds would replace TIF and how the funds would be split between the Department of Housing and the Department of Planning and Development at subject matter hearing that dated back to March. The alders showed concern about what would happen if the bond wasn’t approved, why the threshold for council approval was set at such a high dollar amount, and how TIFs expiring in 2027 could impact the implementation of these funds. With such a large number, my poverty-stricken brain couldn’t fathom that such a large amount of money was on the table, especially when I thought that $48 million in 3 months was some type of municipal miracle when it came to funding community projects that could revive abandoned schools and create affordable housing. 

In April, at the Committee on Finance meetings on April 15th and 17th, the ebb and flow of the previous meetings I covered was slightly different. For one, the public comment section had ten people speaking and took up close to an hour of the meeting. Secondly, the April 15th meeting didn’t conclude the vote on approving the mayor’s bonds, and neither did the following meeting on April 17th, but instead, it wasn’t concluded until April 19th. The central point of contention of the alders who showed contention is that the $5 million threshold for council approval was too high, and after many attempts by Vice Chair Conway, Alderman Brendan Reilly, and Alderman Raymond Lopez. Block Club Chicago’s Melanie Mercado’s article on April 19th did a great job of cataloging the sentiment of the opposing alders, with a great quote from Alderman Samantha Nugent who said it was like “blindly signing a check.”  The Final vote was 32-17.

Money doesn’t grow on trees. Money does grow on capital and assets and the city has many avenues of generating revenue from capital and assets. Alderpeople have the opportunity to access the revenue that is generated through many means, though the mayor’s bond is projected to cost taxpayers $2.4 billion over the course of the next 37 years. TIFs freeze the taxes in areas where these community projects are done, yet over time, the rise of property value and the increases in property taxes will go back into designated funding in the TIF district, which gives communities opportunities to level the playing field and to take advantage of the capital and assets the city has as being the corporate capital of the midwest. The millions and billions I witnessed on the table may seem like alien numbers to someone who grew up in Englewood, but trees only grow when the seed is planted.