Grassroots groups ask injunction against Chicago River development
Court filing charges subsidies don’t pass the ‘but for’ test on critical need
By Ted Cox
CHICAGO — Grassgroots groups have filed for an injunction to halt public funds from being used on a proposed development along the North Branch of the Chicago River.
The Grassroots Collaborative and Raise Your Hand for Illinois Public Education previously filed suit in April charging that a Tax Increment Finance district approved for the Lincoln Yards development violated the state statute requiring “TIF districts to be in blighted neighborhoods.”
The groups redoubled their efforts this week, filing for an injunction against any use of government funds on the Lincoln Yards project as preparations are made to begin construction in earnest on what’s estimated to be a $6 billion development over 53 acres of Chicago’s Near Northwest Side.
“We are filing an injunction to halt the release of TIF dollars to the Lincoln Yards project,” said Amisha Patel, executive director of the Grassroots Collaborative, at a news conference at the Daley Center in downtown Chicago on Thursday.
“The TIF program has completely gone off course,” Patel said. “TIFs are supposed to be used to spur economic development in low-income communities, and that’s not what’s happening here.”
Calling the Lincoln Yards site, a converted industrial area being rezoned for mixed-use residential and commercial buildings, “some of the most desirable land in the state and perhaps even the country,” Patel insisted, “It is not blighted, and development would certainly happen there even if there were no TIF money.”
That’s key to the suit’s argument, as Aneel Chablani, of the Chicago Lawyers’ Committee for Civil Rights, who filed the suit and the injunction, said it does not pass the “but for” test in the state law, which calls for finding the area would remain blighted “but for” the public investment.
“The idea that but for these tax subsidies economic development would not occur in an area surrounded by Lincoln Park, Bucktown, (and) Wicker Park stretches all reasonable interpretation of this statute,” Chablani said.
He quoted from developer Sterling Bay that “development is already underway just steps away from the most refined neighborhood in Chicago.” According to Chablani, Sterling Bay put forth that position in a pitch for Amazon to adopt the Lincoln Yards site as its second headquarters — 18 months before the city formally approved the Cortland-Chicago River TIF district.
“Lincoln Yards is the best-capitalized site in Chicago,” Chablani said.
The original suit also charged the city with civil-rights violations in the way it administers the TIF program, and Chablani repeated that Thursday, saying public subsides for the Lincoln Yards development are “furthering our city’s shameful racial and economic segregation.”
Brenda Delgado, a Chicago Public Schools parent and Raise Your Hand board member, charged that TIFs are contributing to the unequal allotment of resources in schools, saying, “It is egregious to spend public money on a luxury development in a wealthy area while the children of Chicago are not prioritized.”
TIFs set a cap on tax revenue from a designated area. As property values rise with development, the additional tax revenue above that cap is placed in a TIF fund to be spent on capital improvements in that area. The city has argued that the Lincoln Yards development will require infrastructure improvements including new streets and a riverwalk that will be paid for with the TIF funds. The Courtland-Chicago River TIF is projected to collect $900 million over its 23-year lifespan, perhaps as much as $1.3 billion with borrowing and interest.
TIFs don’t actually take money from schools, which file their own set tax levy, but the $900 million in the Cortland-Chicago River TIF is tax revenue that will not go into public coffers, and will have to be made up by taxpayers in the rest of the city through higher tax rates.
According to Megan Reif, of the National Lawyers’ Center for Civil Rights Law, Chicago has more TIF districts than any other large metropolitan area in the country.
Former Mayor Rahm Emanuel originally ran for office in 2011 on a platform promising to rein in TIFs. But Patel pointed to a recent study by city Inspector General Joe Ferguson finding that no recommendations from a 2011 task force studying TIFs had ever been fully implemented. “Joe Ferguson’s report findings validate our position,” Patel said.
Newly elected Mayor Lori Lightfoot was dubious about the Lincoln Yards TIF on the campaign trail, but after winning election she signed off on the TIF with promises for additional affordable housing in the development from Sterling Bay.
Activists hoped that Lightfoot might take a more confrontational attitude toward TIFs in general and the Lincoln Yards TIF in particular, but according to Chablani, “We have not received an official response from the city” on the lawsuit — not from the Emanuel administration before, and not from the Lightfoot administration since.