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Nothing 'Illegal' In Alleged Navy Pier 'TIF Shell Game,' Alderman Says

 Ald. Pat Dowell, who was outraged by a report last month alleging misuse of city funds that went toward Navy Pier, has since changed her tune.
Ald. Pat Dowell, who was outraged by a report last month alleging misuse of city funds that went toward Navy Pier, has since changed her tune.
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SOUTH LOOP — An alderman who expressed outrage last month at a reported allegation of misused city funds that went toward Navy Pier has changed her tune, now saying there was nothing "illegal" about the transaction.

Ald. Pat Dowell (3rd), who demanded a City Council hearing last month following an investigation into a so-called "TIF Shell Game" that steered $55 million toward Navy Pier three years ago, told South Loop neighbors Monday that she's now fine with the political maneuver.

Crain's Chicago Business and Better Government Association investigation last month alleged that city officials secretly worked to steer $55 million in tax increment financing (TIF) funds from a new McCormick Place hotel to Navy Pier as City Hall moved to close 49 public schools. 

But after meeting with the quasi-public agency known as McPier that runs the pier and McCormick Place, Dowell told the neighbors she's now fine with the move.

"There was nothing illegal or untoward in this financial transaction," Dowell said at a town hall meeting Monday at McCormick Place. "The way the financial transaction was done was not transparent enough to all the aldermen and me, but there was nothing illegal about what [McPier] did."

TIF districts capture property tax gains in a designated area — diverting revenue from other local taxing bodies including school districts — and deliver them into a special fund for projects meant to spur redevelopment in blighted areas. 

The method is heralded as an economic engine by some, but decried as a "slush fund" for politicians' pet projects by others.

The Wintrust Arena and Marriott Marquis next door on Cermak. [DNAinfo/David Matthews]

The Crain's/BGA report last month detailed how city officials worked to divert $55 million in TIF funds from the McCormick Place hotel project on the Near South Side to Navy Pier, a high-profile Downtown tourist destination that isn't eligible for such funding.

Dowell justified the move by bringing out Bob McKenna, an official with the city's Department of Planning and Development, who on Monday explained that the city simply "reimbursed" McPier for hotel work it had already paid for. 

McPier, formally known as the Metropolitan Pier and Exposition Authority, paid $55 million in 2014 for TIF-eligible work related to the new Marriott Marquis tower near Cermak Road and Prairie Avenue, McKenna said. He said City Hall then drew from TIF funds to pay back McPier, which then delivered the $55 million in new funding to Navy Pier, which is undergoing a big renovation tied to its centennial celebrated last year.

City officials project the 1,200-room Marriott Marquis and new Wintrust Arena next door will generate 15,000 permanent jobs and a $9.4 billion economic impact to the surrounding area, two big numbers they say justify the move.

Some South Loop neighbors are still unswayed, though. Parents and staff at nearby National Teachers Academy, which Chicago Public Schools aims to close and convert to a new South Loop high school, brought out a paper mache Ferris wheel to the Bud Billiken Parade earlier this month criticizing the TIF deal.

"If the South Loop needed a high school so badly, the mayor should have used the $55 million he spent on Navy Pier to build it," said Hannah El-Amin, a National Teachers Academy parent. "Why is closing our school seen as an option to deal with his financial mismanagement?"


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Alderman Calls For Hearings In Wake of BGA/Crain's Navy Pier Investigation (Crain's/BGA)

South Loop School Would Close, Be Converted To High School 'Gradually': CPS