Instead of Subsidizing Sterling Bay We Should Be Taxing Them

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On Wednesday, outgoing Mayor Rahm Emanuel and a lame duck City Council approved the $2.3 billion dollar taxpayer handout to mega-developers Sterling Bay and Related Midwest. This action reinforces what many of us have been saying for years – we have to fundamentally change the way that Chicago utilizes TIF dollars.

As City Council moved to pass the Alderman-elects Daniel LaSpata (1st Ward), Mike Rodriguez (22nd ward), Byron Sigcho Lopez (25th ward), Andre Vasquez (40th ward), Matt Martin (47th ward), and Maria Hadden (49th ward) stood with community members blocking LaSalle St. to call for a stop to the creation of the two megaTIFs.

Chicagoans are fed up with the continued handouts to politically connected developers for their pet projects and luxury developments. In the case of Lincoln Yards, community residents, union members, and small business leaders opposed this project every step of the way.

Chicago has 149 TIF districts, as many as the other nine largest U.S. cities combined. The problem with TIFs is that the majority of TIF districts that have significant funds are located in parts of the city where development is already happening – namely on the North side, downtown, or near downtown. This means that instead of eliminating blight, or even reducing it, TIFs in Chicago serve to exacerbate inequalities. For example, between 2011 and 2015, 60% of TIF funds went to the downtown area and the north side. By contrast, the Westside only received 9% of TIF funding; the South Side received 16% and the Far South Side 4%. Yesterday’s votes reinforce the truth that the TIF system is broken.

We need a new way forward with economic development in this city.

Once Lightfoot is sworn in as Chicago’s mayor, she should immediately hit the pause button on the TIF program and hold public hearings on the economic priorities of the city. She must build an approach that centers investment in low-income neighborhoods on the South and West sides, not maintain the current status quo where our communities are at the margins. And, she should support revenue solutions that make the wealthiest of our city pay their fair share. Instead of subsidizing Sterling Bay, we should be taxing them.

At the Grassroots Collaborative Reimagine Chicago Mayoral forum, Lightfoot committed to, among other things, the reopening of the City’s mental health clinics, free city college tuition for all Chicago residents, and a more equitable funding formula for Chicago Public Schools.  All of these policies would be critical investments in our neighborhoods that have languished under the Emanuel administration.

If we made these investments and prioritized neighborhoods instead of luxury developments, we would not only be able to improve the lives of Chicago residents but create the sort of vibrant city that will make more businesses want to set up shop here – without us handing them billions of our property tax dollars.