CITY HALL — Aldermen are set to vote Wednesday on an effort by Mayor Rahm Emanuel and Treasurer Kurt Summers to encourage investors to look south of Roosevelt Road and west of Ashland Avenue by creating a $100 million investment fund with taxpayer money.
Nestled in the mayor's proposed 2017 spending plan, the proposed fund has drawn criticism from several members of the Progressive Reform Caucus who want to ensure that the money won't be used in more affluent areas of the city, like Downtown and Lakeview, that have no trouble attracting attention from investors.
Ald. Carlos Ramirez-Rosa (35th) said in an opinion column published Friday by the magazine In These Times '"that the fund in fact amounts to a blank check from Chicago taxpayers to financiers."
During a radio town hall address Monday, Emanuel touted the Chicago Community Catalyst Fund as one of a number of strategies his administration is using to restore "vibrancy" to commercial and retail areas of areas like Pullman and Englewood.
"It is another tool in our economic toolbox," Emanuel said. "I believe in the promise of Chicago, so I think we should invest in that promise."
The fund is the brain child of Summers, who refers to it as Fund 77, after the city's 77 community areas. It is designed to combat what Summers said is the incorrect assessment by Wall Street firms that parts of Chicago are too risky for investment.
"It's perceived risk, not actual risk," Summers said after touting the plan to the City Council during budget hearings.
Summers told the council that the city's $100 million would be matched by $300 million from private firms, with no more than 20 percent of the fund's assets eligible for a single project.
The city's contribution to the fund — set at $35 million this year and next and $30 million in 2018 — would come from the profits the city earns from its $7 billion investment portfolio, Summers said.
A seven-person board, including Summers and members appointed by the mayor, would pick the managers of the fund, and board would provide the oversight.
Only projects in low-income neighborhoods and census tracts as defined by the Community Reinvestment Act could be picked for investment, Summers told the council.
That would include "large pockets of the south and west sides" but also areas like Uptown and Midway, Summers said.
Ald. Ricardo Munoz (22nd) told Summers during a budget hearing that the requirement that the funds have to be used in low-income parts of Chicago should be enshrined in the ordinance, set to be adopted Wednesday as part of the city's 2017 budget.
Summers told Munoz the fund's bylaws would reflect those regulations, and including it in the ordinance was not necessary.
Munoz, Ald. John Arena (45th) and Ald. Scott Waguespack (32nd) all voted against the plan when it came before the finance committee Nov. 7.
Both Arena and Waguespack said there was not enough oversight built into the ordinance to ensure taxpayers' money would be well spent.
Though Arena and Waguespack believe the fund should be accountable to the inspector general and open records act, no one introduced an amendment to include those protections.
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