"TIF 101" - City Bureau 7-6-17
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The document discusses Tax Increment Financing (TIF) districts, which divert property tax revenue from other taxing bodies towards development projects. TIFs are intended to fund projects in blighted areas that the private market cannot support, but critics argue they are overused and lack transparency. The document examines how TIF funds have been allocated in Chicago, particularly to support large commercial developments, hotels, and stadiums even in prosperous areas of the city.
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"TIF 101" - City Bureau 7-6-17
- 1. July 6, 2017 Tom Tresser
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- 3. 3 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.
- 4. 4 The TIF Illumination Project started in 2013.
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- 8. 8 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
- 9. 9 What are TIFs? The Midwest TIF – 24th Ward (created in 2000) Say there are 1,000 properties in the TIF…
- 10. 10 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
- 11. 11 Money From TIFs Taken From?
- 12. 12 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
- 13. 13 TIFs Usedto support commercial projects in these“Blighted” Areas 40 S. Halsted Apple Store
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- 20. 20 Where are TIFs? 2015 Chicago = 146 Suburbs = 293 Cook County = 439
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- 22. 22 Mr. TIF
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- 25. 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
- 27. TIF $ in Chicago’s Loop 24
- 28. 123 S. Dearborn Street – Dearborn Center 32 W. Randolph Street – Oriental Theater 1 N. Dearborn Street - Sears TIF $ in the Loop
- 29. 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
- 30. TIF FUNDS IN THE 46th WARD Lincoln Park
- 31. Where are Parks MOST Needed?
- 32. 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.
- 33. 33 $17.1 billion revenues in 2016
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- 36. 36 TIFs hoard taxes in prosperous communities – starve poor communities. 1. They further inequality in chicago.
- 37. 37 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."
- 39. Woodlawn TIF 39 • 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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- 41. Biggest Project – Strand Hotel 41
- 42. 42 Holsten investing $10,000 and his fee is $1,000,000. Nice. Bank makes $950,000. Architect = $778,218. Lawyers = $575,000. Nice.
- 43. 43 62 units created by spending $22.9 million = $369,355 each.
- 44. 44 $343,930 to Chicago elected officials since 1994. $54,500 to Alderman Ed Burke since 2002.