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TIF Workshop Illuminates Complicated Tax Projects

By Casey Cora | June 6, 2013 8:48am
 Tom Tresser, a co-founder of the Civic Lab, discussed the ins and outs of tax increment financing at a TIF Illuminator workshop.
Tom Tresser, a co-founder of the Civic Lab, discussed the ins and outs of tax increment financing at a TIF Illuminator workshop.
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DNAinfo/Casey Cora

MCKINLEY PARK — Without knowing it, South Side taxpayers spent millions luring a big box retailer to neighborhood, courting private real estate developers to build here and sending a bundle of cash to a wine and spirits company that hardly anyone's heard of before.

Those were some of the examples at Wednesday's TIF Illumination workshop, a seminar designed to teach residents how tax increment financing works in the city's 11th and 12th wards, which encompass Bridgeport, McKinley Park, Brighton Park, Little Village, Back of the Yards. 

The workshop for the 11th and 12th wards was hosted by the Civic Lab, a nonprofit group “dedicated to building, distributing and encouraging the use of new tools for civic engagement and government accountability.”

Part of an ongoing series across the city, the seminars are geared toward residents looking to learn  how money is being collected and spent under the oft-misunderstood economic development tool known as TIF, or tax increment financing.

Here's how it works: When an area is declared a TIF district — by law it's supposed to be in a "blighted" area — the county sets a "base value" by totaling the property values within the district.

Then, the amount of property tax money public agencies like schools and parks can take from that area is calculated using that base value for 23 years. Any additional property tax money generated from an increase in property values within the TIF district is instead sent to the TIF fund overseen by the city.

It's all meant to spur economic development.

In 2011, the city's 163 TIF districts extracted $454 million in property taxes across the city, according to Cook County Clerk David Orr's office. That money, the Civic Lab said, is placed "in what is essentially a second city budget —  one that is extremely hard to track by average citizens."

But Tom Tresser is aiming to change all that.

Tresser, the Civic Lab co-founder, has been a vocal opponent of many TIF-funded projects in Chicago — he's partial to words like "Shanghaied," "siphoned" and "sucked" to describe what happens to property taxes diverted into TIFs — but he said the "illuminator" workshops are strictly about the numbers.

"My editorial is distinct from the facts of the matter," he said.

To that end, the crowd of roughly 60 who gathered at the McKinley Park branch of the Chicago Public Library on Wednesday were presented with an array of figures showing how their money's been spent.

In the 11th Ward, there are 10 TIF districts, and more than half of the ward — some 57 percent — falls into one. In the 12th Ward next door, there are also 10 TIF districts, encompassing about 47 percent of the ward.

According to the group's figures, the TIF money is overwhelmingly used to subsidize private interests and not public projects. In both wards, entities like manufacturers and property developers have received tens of millions of TIF dollars.

TIF-funded projects in the 12th ward have included $5.3 million for the creation of the McKinley Pak Target store and $4.4 million for National Wine and Spirits, an Indianapolis-based company with an address at a Brighton Park warehouse.

A spokeswoman for Ald. George Cardenas (12th) said she wouldn't "get into a debate about the alleged" figures presented during the seminar but said the alderman is "committed to using TIF money for spurring economic development."

In the 11th Ward, $13.1 million in TIF money has been used for a planned massive distribution facility at Damen Avenue and the Stevenson Expressway, and $1.7 million has been paid to an entity called Righteous Jefferson LLC, among other projects.

The complete breakdown will be posted at the Civic Lab site soon.

The financial disclosures surprised residents like Sue Pletsch, a member of the McKinley Park Civic Association and the local school council at Evergreen Academy Middle School.

What shocked her the most, she said, was "that private people are getting our tax money when the schools are broke."