Building Community Equity Series TIFs the ARO Pilot
Building Community Equity Series TIFs, the ARO Pilot, and the 78
Building Community Equity Series TIFs, the ARO Pilot, and the 78 Clifford Helm Community Law Project chelm@clccrul. org 2 -19 -2019
` Why are we here? • To build public and community knowledge • To use that knowledge to keep people engaged with the work that people are doing in the community • Part of many events
` My Role • The Community Law Project supports race equity and economic justice by providing legal and technical support to community organizations, coalitions, and campaigns • BUT Today: Information.
` Where can I find this information? www. clccrul. org/community-land-use-guide • Full TIF chapter and previous & upcoming chapters • Handouts from today • Link to the recording of today’s presentation
` Topics • Tax Increment Financing • The ARO pilot in Pilsen/Little Village • The 78 Development: TIFs and the ARO Pilot
` Tax Increment Financing
` What is “Tax Increment” financing? • A tax funded system to create public investment in economic development in areas that need it • Used nationwide • Created by state law, controlled by local municipalities
` What is a TIF District? • An “Redevelopment Area” determined by the city • Shows Blighting characteristics • “But for” public money, lack of development • TIF money collected within the district used within the district • Lasts 23 years, but extended to 35
` Why create TIF districts?
` How the incremental taxes work 2010 (TIF Created) 2018 Assessed Value: Taxes Owed: $150, 000 $3, 000 Assessed Value: Taxes Owed: $400, 000 $8, 000 General: TIF: $3, 000 $5, 000
` The TIF Graphic
` NUMBERS • In 2017, Chicago collected $660 million in TIF funds • The downtown TIF district (where my office is) collected $56. 7 million in 2017* • TIFs accounted for 10% of all property taxes collected in Chicago in 2017 * The Clark/Roosevelt TIF will have similar numbers w/big difference
` The Questions Do TIFs take away money from other things? Do we pay more in property taxes because of them?
` The Questions Do TIFs take away money from other things? Do we pay more in property taxes because of them? No…
` The Questions Do TIFs take away money from other things? Do we pay more in property taxes because of them? No… But also yes
` Who creates TIF districts?
` The Community Development Commission • Fifteen person commission • Appointed by the Mayor • One member is the head of DPD • All have background in economic development and community development • Most TIF processes start at the CDC
` Chicago Agencies Timeline (1) • Mayor, Alderman, DPD, and Developer discuss district • Possible public meetings • 3 rd party eligibility study and Redevelopment Plan draft • Community Development Commission Introduction (BECOMES PUBLIC)
` Chicago Agencies Timeline (2) • Jan. 11: Joint Review Board (Taxing Bodies advisory opinion) • Feb 5: Community Development Commission • Feb 21: Plan Commission • March (? ): City Council Introduction • April (? ): Finance Committee • April (? ): City Council Vote The 78 & Lincoln Yards
` How are TIF districts created? The “Redevelopment Plan” • District eligibility • Boundaries • “Blighting” characteristics • What to spend TIF money on • Budget • Jobs goals and other public benefits goals (sometimes)
` IMPORTANT DISTINCTION A TIF “district” is just an area. This is created by the “Redevelopment Plan. ” A TIF “project” is a project funded by the money. Many times created by a “Redevelopment Agreement. ”
` What does the money get used for? • Public works projects (streetscapes and lighting) • Public developments (such as the CTA) • Schools • Job training programs - small business grants • Funding residential housing repairs • Private developments • Infrastructure/public buildings built by private developers
` 2009 -2017 TIF Spending Chicago’s 2018 Annual Financial Analysis
` The Clark/Roosevelt TIF https: //twitter. com/Chicago. DPD/status/1092903804511707136
` The 78 Development https: //www. chicago. gov/content/dam/city/depts/dcd/temp/78 -cpc-final. pdf
` The 78 TIF • Total “eligible” costs at $700 M • “Reimbursement” TIF • Bulk of the costs focused on infrastructure ($600 M)– paid for initially by the developer • Not much planning except for the infrastructure
` The 78 Infrastructure Plan https: //www. chicago. gov/content/dam/city/depts/dcd/temp/78 -cpc-final. pdf
` https: //www. chicago. gov/content/dam/city/depts/dcd/tif/plans/roosevelt-clark-tif-study. pdf
` The 78 TIF • $364 M • $84 M for a new Red Line station for the realignment of Metra tracks • $79 M for improvements to Clark Street • $12 M for an extension of 15 th Street • $10 M toward a new seawall
` The 78 TIF: Common Concerns • Amount of TIF funding • “POPS” instead of public parks • Affordable housing plan • Extreme size of the development • TIF existing solely to support a specific mega-development • Transparency in Process
` Affordable Requirements Ordinance
` Affordable Requirements Ordinance The ARO is a system where most* buildings that create over 10 new units have to: • Build affordable housing on site or near the site, OR • Pay an “in-lieu fee”
` Affordable Requirements Ordinance General requirements: • Set aside (or build) 10% of the units as affordable OR pay per unit not built • If rental units: affordable for families earning 60% AMI • If purchased units: affordable for families earning 100% AMI • Stricter (doubled) requirements for developments that get TIF
` Pilsen Little Village Pilot
` ARO Pilot Changes Within the Pilot Area: • 20% of total new units must be affordable/paid • 10% must be built on site • Cannot satisfy ARO by building offsite • Provides a “credit” for building 2 or 3 bedroom affordable units • Increases in-lieu fee
` Emphasis on spending money in PLV • DPD (in meetings) has mentioned that they plan to use the in-lieu fees from whole city to focus on Pilsen/Little Village • These would build new affordable units and subsidize low-income renters
` The 78 and the ARO • Coordinated timing and planning • The 78 planning document was released around the time the ARO pilot was passed
` The 78 and the ARO • Up to 10, 000 total residential units • 2, 000 total ARO units or fees are required • 500 will be built on site • 500 will be paid for ($91 M) • 1000 more “might” be built offsite (half of which must be in the Pilot Area)
` Where can I find this information? www. clccrul. org/community-land-use-guide • Full TIF chapter & upcoming chapters • Handouts • Link from today to the recording of today’s presentation
Thank you! Clifford Helm Community Law Project chelm@clccrul. org
Method Plant – Pullman ($8 million in TIF)
Marshfield Plaza ($26. 6 million in TIF)
Garfield Park Conservatory ($3 m to Park District)
ARO Pilot
United Airlines Headquarters
Source: Cook County Clerk
- Slides: 48