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UPTOWN CHICAGO COMMISSION

Uptown's TIFs (Tax Increment Financing) FAQs

  What is a TIF?

  Which other websites contain detailed TIF information?

  What are the pros and cons of TIF usage?

  Which costs are eligible for TIF funding?

  Can TIFs be changed?

  What are the opportunities for notification?

  Which TIFs exist in Uptown and what are their boundaries?

  Where can I obtain copies of the Uptown TIFs' Redevelopment Plans?

  Have any of the Uptown TIFs been amended since their adoption?

  How can I access the details of individual TIF Redevelopment Agreements?

  Where can I obtain copies of the Uptown TIFs' Annual Reports?

  Have any job training programs been developed in Uptown with use of TIF funds?

  What was all the controversy surrounding the city's decision not to conduct Housing Impact Studies?

  What other issues have been controversial in the establishment and administration of Uptown's TIFs?

What is a TIF?

TIF (tax increment financing) districts are economic development, financing tools permitted in certain circumstances by Illinois state law. 46 other states have enacted similar legislation.

In the 1980s, federal and state governments began to significantly reduce the amount public funds made available for local, economic development initiatives. States began to enact legislation which permitted municipalities to create pools of money for economic development, without raising local property tax rates.

TIFs can have legal lives up to 23 years in duration.

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Which other websites contain detailed TIF information?

The following websites provide excellent, detailed TIF information. The Illinois Tax Increment Association has a pro-TIF orientation. The Neighborhood Capital Budget Group takes a less enthusiastic view, and offers many suggestions for changes to state statutes and local implementation.

Illinois Tax Increment Association  www.illinois-tif.com.tif.htm

Neighborhood Capital Budget Group  www.ncbg.org/tifs/tifs.htm

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What are the pros and cons of TIF usage?

Pros:

  • Attraction of private development, new businesses and new jobs
  • Retention of existing businesses
  • Stimulation of local property values
  • Stability of local tax rates
  • Local municipal control
Cons:
  • Lack of public input throughout life of TIF
  • Potential for municipality to change basic character of a neighborhood against wishes of residents
  • Potential to accelerate rate of gentrification
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Which costs are eligible for TIF funding?

TIF funds may be used for:

  • Property acquisition and costs to prepare it for redevelopment, including environmental cleanup and building demolition
  • Infrastructure improvements, such as streets, bridges and viaducts
  • Other public improvements, including improvements to schools, parks and other public buildings
  • Renovation projects
  • Job training
  • Day care
  • Studies, surveys and plans
  • Professional services, such as architectural, engineering and legal

TIF funds cannot be used for "bricks and mortar" costs of construction, except in the case of affordable housing.

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Can TIFs be changed?

Yes.

Minor changes require posting of a public notice in a newspaper, but there are no requirements for a formal public process.

Major changes (such as adding parcels of property to the district or acquisition list; changing land use; changing the nature of the TIF; or adding new redevelopment costs to the budget) require notification by mail to all registered interested parties, and require another public hearing at the CDC level.

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What are the opportunities for notification?

A registry of interested residents and organizations must be created for each TIF and notices of important TIF activities must be sent to those registered. Registration is effective for three years, and is renewable thereafter.

The Department of Planning and Development maintains each of Chicago's TIF's required registry. Call the department at 312-744-4471 for instructions on how to be added to any TIF's registry.

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Which TIFs exist in Uptown and what are their boundaries?

Clark/Montrose TIF    (click for map)
This conservation TIF was established in 1999. It encompasses 19 blocks in the general area along Clark Street, bounded by Foster and Montrose. The bulk of the TIF area is in Alderman Shiller's ward, although Aldermen Schulter and Smith each have portions. The budget is $21 million.

The goals of the TIF are to ensure that new, private development occurs on a coordinated (rather than piecemeal basis) to ensure that the land use, vehicular access and parking will meet current planning standards.

Uses of funds have included façade improvements for the new Wooden Spoon retail store. Large increment is expected to be produced by the new Rainbo Homes residential/retail development on the site of the former Rainbo Roller Rink.

Lawrence/Broadway TIF    (click for map)
This conservation TIF was established in 2001. It encompasses 25 blocks and is primarily in Alderman Smith's ward, although some portions are also in Alderman Shiller's ward. The budget is $35 million.

The overall redevelopment concept is to improve and revitalize the area as a mixed-use commercial area with adjacent residential uses and community facilities that compliment and serve the community. The entire project area is to be marked by improvements in infrastructure, job and business retention and expansion, new business and residential development, and enhancement of the area's overall image and appearance.

Uses of funds have included renovation and redevelopment of the Goldblatt's trio of buildings, the Leland Hotel and Gunnison Lofts.

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Where can I obtain copies of the Uptown TIFs' Redevelopment Plans?

(click for Clark/Montrose redevelopment plan excerpts)

(click for Lawrence/Broadway redevelopment plan excerpts)

A Redevelopment Plan is an assessment of an area in need of economic assistance. The plan demonstrates why the area needs to be redeveloped and how the municipality plans to revitalize the area.

A Redevelopment Plan includes:

  • Description of the boundaries of the district recommended for redevelopment
  • Discussion of why the area needs to be redeveloped
  • Redevelopment goals and objectives for the area
  • List of proposed properties for acquisition, if any
  • Budget of TIF-eligible costs for the life of the TIF district
  • Timetable for redevelopment
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Have any of the Uptown TIFs been amended since their adoption?

Yes, although these amendments did not occur in the manner which Aldermen Shiller and Smith and the city of Chicago's Department of Planning of Development had promised during the original TIF approval processes. These representatives of the city made commitments that there would be public meetings, at locations within the neighborhood and during evening hours, where suggested amendments would be presented and discussed. That process was not followed for any of the amendments listed below:

Within the Lawrence/Broadway TIF, a redevelopment agreement has been crafted for the vacant Heilig-Meyers building, located on Broadway at Gunnison. The redeveloped property will be called Gunnison Lofts. Plans call for the first floor to contain space for a theater group and several restaurants; and 22 condos on the second and third floors. As required by law, 20% of the condos will be set-aside as affordable.

Also within the Lawrence/Broadway TIF, the Riviera Theater was placed on the acquisition list. This was done to force a sale by an owner who the city described as negligent, and to pave the way for an acquisition by JAM Productions. However, the former owner sold the theater to another party. It is not yet clear whether the city will attempt to force a subsequent sale to JAM Productions.

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How can I access the details of individual TIF Redevelopment Agreements?

A redevelopment agreement is the agreement a developer makes with the city in return for a TIF subsidy. The agreement is passed by the Chicago City Council in an ordinance. All ordinances passed by the City Council can be viewed on the City Clerk's website.
(Click for www.chicityclerk.com/citycouncil/journals/index.html)

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Where can I obtain copies of the Uptown TIFs' Annual Reports?

Audited, annual reports are required for each TIF and soon will be available on the State Comptroller's web page. These reports contain information on redevelopment agreements, private contracts, bond issues, and the growth in property value and tax revenue, among other things. Annual reports are available at the Department of Planning and Development at 312.744.4471.

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Have any job training programs been developed in Uptown with use of TIF funds?

Yes, UPCORP (Uptown Community Development Corporation) and a number of local not-for-profits petitioned the city to fund a jobs training program for potential employees of the Borders Books and Music. Approximately 25 new jobs were created, and 8 local residents were hired as a result of the job training program.

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What was all the controversy surrounding the city's decision not to conduct Housing Impact Studies?

State law requires a housing impact study be conducted when a proposed TIF area contains at least 75 occupied residential units, or if the TIF plan includes removal of 10 or more occupied residential units. One exception exists: if the municipality certifies there will be NO residential displacement with TIF funds during the life of the TIF, a housing impact study is not required. The city of Chicago made such certifications with both the Lawrence/Broadway and Wilson Yard TIFs.

Many residents wanted housing impact studies to be conducted to draw attention to the fact that Uptown has a very high proportion of residents living at or below the poverty level, and to discourage the use of TIF funds for construction of additional low- or very-low-income housing.

25% of Uptown residents live at or below the poverty level, and the UCC estimates that within the Wilson Yard TIF boundaries the number of permanently subsidized housing units to be 40%.
(click for more details)

Federal HUD guidelines discourage concentration of poverty at more than 20%. Communities which have higher poverty proportions are deemed to be "very high poverty" and "unstable".

Concerned Uptown residents believe the city wanted to avoid any public discussion of appropriate poverty concentration goals and balance.

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What other issues have been controversial in the establishment and administration of Uptown's TIFs?

  • Goals and objectives
  • Use of TIF funds for demolition of historic structures
  • Gentrification
  • Redefinition of "affordable" housing
  • Affordable housing set-aside percentages
  • Public process concerning actions subsequent to adoption
  • Local TIF oversight
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