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Pawar Announces Early Retirement — For His Ward's TIFs

By Patty Wetli | August 10, 2016 5:33am | Updated on August 10, 2016 1:22pm
 Kerry Wood Cubs Field is one of the projects that benefited from a TIF district Ald. Pawar plans to retire.
Kerry Wood Cubs Field is one of the projects that benefited from a TIF district Ald. Pawar plans to retire.
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DNAinfo/Patty Wetli

LINCOLN SQUARE — Ald. Ameya Pawar (47th) campaigned for office in 2011 on a promise to "blow up" Tax Increment Financing — the special districts that siphon property taxes out of the city's general revenue bucket and into what some refer to as "slush funds."

Instead, he used the ward's TIF money to pay for projects like an addition at Coonley Elementary, repairs to Sulzer Library and improvements to schools, parks and playgrounds.

"The political reality is [TIFs] exist. ... We've blown up how we use them. We used them for public projects," Pawar said.

A lone exception was $4.5 million in TIF funds spent on the Mariano's/LA Fitness development, which the alderman justified in terms of the property and sales taxes being collected from the formerly vacant lot.

"Now it's time to get rid of [TIFs] where they're not needed," he said.

To that end, the alderman announced a plan to retire a pair of the ward's TIFs early: Ravenswood and Western Avenue South, the latter of which generates approximately $6 million annually.

"It's not exactly the way we talked in 2010 ... but it is major reform," Pawar said.

The Western Avenue South TIF, created in 2000, isn't set to expire until 2024. According to the Civic Lab's TIF Illumination Project, Western South extracts 90 percent of property taxes collected within its boundary, which includes portions of an area that stretches from Montrose to Belmont and Damen to the Chicago River.

"It's really hard to justify," Pawar said. "CPS is in crisis. It needs the money."

But all of that TIF loot won't immediately swell city — or CPS — coffers.

There are payouts from Western South scheduled through 2021, with obligations ranging from hundreds of thousands of dollars to pay off the Martha Washington senior housing to $8 million pledged to the Western-Belmont viaduct project.

There are no obligations attached to the Ravenswood TIF, which generates approximately $1 million.

Once the bills are paid off, the Western South TIF would disappear, Pawar said.

In the meantime, all surplus would be given over to the city's taxing bodies, including CPS.

"For every dollar you surplus, 50 cents goes to CPS," he explained. 

Though Pawar said he wouldn't change any of his past decisions to funnel TIF dollars to projects in the ward, he added: "We also have to think about the broader city" and the way that TIFs "perpetuate inequality" between parts of the city that are doing well and those that are economically distressed.

He said he's working with Mayor Rahm Emanuel's office on a proposal that would give all council members the option to freeze TIF spending within their wards and surplus the funds. Currently it's up to the mayor to declare a city-wide surplus.

The mayor's office confirmed that talks are under way on the proposal.

"It will help the city's revenue in the near-term," Pawar said of the surpluses.

But longer term, he said the city's economic development process needs to be rethought.

"We need to move away from geographic tools" like TIFs, and toward a centralized plan in which development is spread across communities, he said.

"It's all of our money," said Pawar. "It's the entire city's money."

Pawar, who is limiting himself to two terms as alderman but hasn't ruled out a mayoral run, acknowledged that retiring TIFs might not play well with some constituents. Dollars collected in the ward have largely stayed in the ward, which will no longer be the case.

"I expect not everyone is gong to be happy," he said. "But it's time."

Pawar's interest in running for mayor isn't a secret but speculation was fanned recently by an interview with Chicago magazine which mentioned that he continued to raise money even though he is in the second of what he has promised will be only two terms in the City Council.

Pawar told the publication that he was reluctant to run directly against Emanuel.

"I want Rahm to be successful. A lot of what I’ve been able to pass is with his support, because he has worked with me. ... If Rahm runs again, no, I’m not going to run. If it’s an open seat, yeah, I probably would throw my hat in the ring," Pawar said.

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