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"TIF 101" - City Bureau 7-6-17

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Tom Tresser of the CivicLab delivered this presentation on TIFs to the City Bureau's Public Newsroom at Build Coffee in Hyde Park on July 6, 2017. www.tifreports.com - www.civiclab.us - www.wearenotbroke.org - Contact us at info@civiclab.us. This was our 50th public TIF meeting since 2013! The simple URL for this presentation = http://tinyurl.com/TIF-101-7-6-17.

To listen to the audio of this presentation = http://tinyurl.com/TIF-101-audio.

Published in: Government & Nonprofit
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"TIF 101" - City Bureau 7-6-17

  1. 1. July 6, 2017 Tom Tresser
  2. 2. 2
  3. 3. 3 Key Policy Questions 1. Under what circumstances do we give public $ to private business? 2. Who plans what for whom? AKA, What defines “community development”? 3. Is Chicago broke? 4. Who’s watching our back? Need for new leaders.
  4. 4. 4 The TIF Illumination Project started in 2013.
  5. 5. 5
  6. 6. 6
  7. 7. 7 What are TIFs?
  8. 8. 8 What are TIFs? • Created by municipality (state law) • Designed to subsidize some business project in “blighted” or under-served area • “But for” test – only for projects market CAN NOT support • Captures “incremental” property taxes ABOVE base when district was created • Only for hard costs • Lasts 23 years • Supposed to be spent where collected
  9. 9. 9 What are TIFs? The Midwest TIF – 24th Ward (created in 2000) Say there are 1,000 properties in the TIF…
  10. 10. 10 How Do TIFs Work? When the TIF is created, the city tallies up all the property taxes generated by district in that year (called the "base" amount). After that, all property tax increases above the base (the "increment") are channeled to the TIF district. The property taxes collected from properties inside the district BEFORE the district was created that go to units of government stays FLAT for the life of the TIF (23 years). B A S E
  11. 11. 11 Money From TIFs Taken From?
  12. 12. 12 What are TIFs? Under state law, areas proposed for TIF designation must possess numerous blighting factors to be eligible: • Age • Obsolescence • Code violations • Excessive vacancies • Overcrowding of facilities
  13. 13. 13 TIFs Usedto support commercial projects in these“Blighted” Areas 40 S. Halsted Apple Store
  14. 14. 14Better Government Association
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  18. 18. 18
  19. 19. 19 How Many TIFs?
  20. 20. 20 Where are TIFs? 2015 Chicago = 146 Suburbs = 293 Cook County = 439
  21. 21. 21
  22. 22. 22 Mr. TIF
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  24. 24. To sum up:  TIFs = property taxes  Increment $ collected by TIF  Run by city (mayor)  Lasts 23 years  Blight & “But for” conditions  Hard costs  Supposed to be spent where collected
  25. 25. TIF $ in Chicago’s Loop 24
  26. 26. 123 S. Dearborn Street – Dearborn Center 32 W. Randolph Street – Oriental Theater 1 N. Dearborn Street - Sears TIF $ in the Loop
  27. 27. 188 W. Randolph Street – Randolph Tower Apartments 230 N. Michigan Avenue – Hard Rock Hotel 555 W. Monroe Street – PepsiCo TIF $ in the Loop, Near West Side
  28. 28. TIF FUNDS IN THE 46th WARD Lincoln Park
  29. 29. Where are Parks MOST Needed?
  30. 30. TIF Funds in the 3rd Ward UPDATE - $55 MILLION TIF FUNDING SHIFTED FROM DePAUL STADIUM TO MARRIOTT HOTEL . PIER AUTHORITY TO PUT UP $100 MILLION FOR STADIUM PROJECT.
  31. 31. 33 $17.1 billion revenues in 2016
  32. 32. 34
  33. 33. 36 TIFs hoard taxes in prosperous communities – starve poor communities. 1. They further inequality in chicago.
  34. 34. 37 Authors plead "Our message is simple: 'Please, please, if you're going to offer incentives, don't give them to every firm that asks -- Don't! Ninety percent of the time they don't work, and handing them out after a company has already located in an area without them makes no sense at all."
  35. 35. Let’s Get Local… 38
  36. 36. Woodlawn TIF 39 • TIF #065 • Created 1999, Expires 2022 • Property tax extraction in 2015 = $2,298,703 • Total extraction to 2015 = $31,792,116 • Spent 2015 = $1,263,697 • Transfers = $1,263,697 (to 71th/Stony Island TIF to pay down 2007 Bond Series, Modern Schools Across Chicago construction) • Dept. of Planning siphoned off $62,781 • Balance at end of 2015 = $11,175,872 • Ward 20 = Alderman Willie Cochran https://www.cityofchicago.org/city/en/depts/dcd/supp_info/ tif/woodlawn_tif_.html
  37. 37. 40
  38. 38. Biggest Project – Strand Hotel 41
  39. 39. 42 Holsten investing $10,000 and his fee is $1,000,000. Nice. Bank makes $950,000. Architect = $778,218. Lawyers = $575,000. Nice.
  40. 40. 43 62 units created by spending $22.9 million = $369,355 each.
  41. 41. 44 $343,930 to Chicago elected officials since 1994. $54,500 to Alderman Ed Burke since 2002.
  42. 42. 45 www.tifreports.com www.wearenotbroke.org www.civiclab.us/training tom@civiclab.us 312-804-3230

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