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City advances controversial public financing plan for Sterling Bay’s Lincoln Yards
The proposal still needs to be approved by the City Council, where some alderman have said they’ll vote no
A key city commission advanced a plan to use property tax revenue for construction around the Lincoln Yards mega-development, queuing up a City Council battle pitting Sterling Bay and outgoing Mayor Rahm Emanuel against a growing chorus of critics calling to delay the approval process.
The city’s Community Development Commission voted Tuesday to recommend creating the 168-acre Cortland/Chicago River tax increment financing district, where property tax revenue generated by rising land values would be set aside to fund public infrastructure projects over the next 23 years. All of the 54-acre Lincoln Yards site would be within the district.
The commission separately approved an agreement that would authorize Sterling Bay to front the cost of up to $490 million in public infrastructure work, out of up to $900 million that would be generated from the district, on the condition the company is repaid with tax revenue raised from the district. The city would also dip into the TIF district fund to pay up to $400 million in financing costs, including interest to Sterling Bay, according to the agreement.
In order to qualify the area as a TIF district, city planners are required under city code to show that it suffers from “blight” that would hinder development in the absence of public financing. During a presentation at the beginning of the hearing Tuesday, city planner Chip Hastings said the longtime industrial site is “inconsistent with modern building standards” and needs a boost to “unlock the full potential of the site.”
The funds would cover the cost of multiple big-ticket projects on the city’s agenda for the area, including reconstruction of the aging Clybourn Metra station, extending the 606 trail under the Kennedy Expressway and reconfiguring the intersection of Ashland, Elston and Armitage avenues, city planners said during a presentation of the proposal in November.
The agreement was advanced Tuesday just two weeks after city officials took a similar step to create a 141-acre TIF district on the city’s Near South Side, which would set aside up to $1.1 billion in tax dollars to fund infrastructure around Related Midwest’s 62-acre The 78 mega-development proposal.
But unlike Related, Sterling Bay has not won city full city approval for its project. The Chicago Plan Commission approved the Lincoln Yards plan last month, but Alderman James Cappleman (46th), who took over as chairman of the City Council zoning committee after embattled Alderman Danny Solis (25th) stepped down, said he would hold up its final approval by the City Council unless Sterling Bay adds more affordable units to the plan.
The development’s location inside a TIF district gives it a 20 percent affordable housing mandate, meaning it would have to charge rents below market rate on at least 1,200 of its 6,000 planned units. But Sterling Bay has proposed to include just 300 affordable units inside the development, planning to pay for another 600 to be built off-site. It would opt out of the rest of the mandate with a payment into the city’s Affordable Housing Trust Fund.
The Lincoln Yards proposal has been swamped from the outset by intense scrutiny from community groups and Alderman Brian Hopkins (2nd).
A coalition of local music venue owners formed in opposition to Sterling Bay’s deal with concert promoter Live Nation to build an “entertainment district” and 20,000-seat soccer stadium in the development. Sterling Bay dropped that plan after Hopkins rejected it.
Hopkins later came out in support of the amended Lincoln Yards proposal.
Sterling Bay tried to drum up support for the plan over the weekend with full-page newspaper ads and an op-ed by managing principal Andy Gloor in the Chicago Sun-Times, in which Gloor wrote that the $5 billion project would be “progressive and inclusive.”
The proposals for TIF districts around Lincoln Yards and The 78 must now be approved by the City Council’s Finance Committee, which is chaired by Alderman Pat O’Connor (40th), and by its Housing and Real Estate committee, chaired by Alderman Joe Moore (49th). Both leaders are locked in competitive races for re-election next week.
The plans would then need to be approved by the full City Council. At least 12 of the 50 alderman have pledged to vote against the Lincoln Yards proposal in its current form.