TIF votes paused for Lincoln Yards, The 78 after Emanuel gives stop signal

The last-minute move was a victory for the mayor-elect, who sought to slow down the approval process for the controversial incentives

Chicago /
Apr.April 08, 2019 10:21 AM
Mayor Rahm Emanuel and a rendering of The 78 (Credit: Getty Images)

Mayor Rahm Emanuel and a rendering of The 78 (Credit: Getty Images)

The City Council’s Finance Committee will wait until Wednesday, at the earliest, before taking steps to approve up to $2.4 billion in combined tax increment financing for the planned Lincoln Yards and The 78 megaprojects.

Acting finance committee chairman Alderman Pat O’Connor (40th) oversaw an hours-long discussion of both TIF proposals, but he said he would recess the meeting and convene it again on Wednesday for a potential vote. O’Connor made the decision after Mayor Rahm Emanuel called Monday morning to hold up approval of the new districts.

“While I firmly believe in the value of these projects to the entire city, out of respect for [Mayor-elect Lori Lightfoot’s] wishes and request, I will honor my commitment and delay the vote,” Emanuel wrote in a statement minutes before the committee was scheduled to consider approving both tax increment financing districts.

The creation of the two new districts was seen as the last major public approval needed to kick-start both megadevelopments.

Both Sterling Bay, the developer behind Lincoln Yards, and Related Midwest, which is planning The 78, have already secured planning and zoning approval for their projects. But Emanuel and other backers have pushed the new TIF districts in order to fund infrastructure improvements around both developments.

The last-minute decision was a victory for Lightfoot, who called for the delay. Fresh off her landslide victory in the runoff in Tuesday’s election, Lightfoot said she had “major concerns” over the “deeply flawed process” that led both development proposals to the brink of full approval.

When the finance committee meeting got underway Monday morning, O’Connor suggested the committee delay its vote until Wednesday morning, the same day the full City Council is scheduled to meet. The 48-hour delay would “allow representatives of the mayor’s office and mayor-elect’s office to determine if enough information has been given to allow the projects to move forward at that time,” said O’Connor, who lost his bid for re-election last week.

The city’s Community Development Commission advanced a plan Feb. 5 to create the 141-acre Roosevelt/Clark TIF district, which would have taxed future tax growth around the site of The 78 to fund up to $700 million in public infrastructure projects, plus another $400 million in potential interest payments. Two weeks later, the same body voted to approve the 168-acre Cortland/Chicago River TIF, which could generate up to $1.3 billion for infrastructure around the Lincoln Yards site during the next 23 years.

The votes kicked both decisions to the finance committee, whose approval would send the items to the full council for a final vote. O’Connor told the Sun-Times last week he had whipped up enough votes to pass them, but he was waiting to hear if Lightfoot wanted them delayed.

Emanuel released his statement while a coalition of opponents to the new TIF districts, including a handful of current and incoming aldermen, were staging a rally outside the City Council chamber. When the group heard the news, they broke into cheers and chants of “Si se puede.”

“I feel like I’ve got to shorten this now,” Alderman-elect Andre Vasquez, who defeated O’Connor in last week’s runoff election, said when he received the news while giving his remarks. “I feel heartened and glad that this vote has been delayed.”

But Alderman Brian Hopkins (2nd), whose ward includes the Lincoln Yards site, told reporters that he wanted the committee to vote anyway, saying Lightfoot has not been clear in her rationale for wanting to delay it.

“She hasn’t given us any specifics,” Hopkins said. “She says she still has unanswered questions, we don’t know what those questions are.”

The sweeping site plan for The 78 was publicly unveiled in May, and the Chicago Plan Commission approved it six months later. The proposal would create up to 13 million square feet of new residential, office and hotel space on a vacant 62-acre riverfront plot between the South Loop and Chinatown.

But Lincoln Yards has undergone a rockier public approval process since the plan first came to light in July. Sterling Bay has revised its proposal several times in the face of intense criticism, all leading up to a zoning committee hearing last month when acting chairman Alderman James Cappleman (46th) tried to delay its approval but was overruled.

Tax increment financing generates money for construction over time by diverting new revenue from property tax growth into funds that can be tapped for public or private construction projects. The city now has more than 130 TIF districts, including one created last year to benefit Jaffe Companies’ $58 million Edens Collection shopping center on the city’s Northwest Side.

The financing tool has come under intense scrutiny from Lightfoot and some aldermen, but city planning department commissioner David Reifman has fiercely defended it, saying it could unlock tens of billions of dollars in development that would not otherwise not be possible.

Reifman on Monday again called on aldermen to have get behind the process, saying a delay could risk Sterling Bay’s ability to finance its $6 billion proposal.

“Real estate cycles are fickle,” Reifman said Monday. “We’ve all been through recessions, and we’ve all had expectations of growth … if we don’t seize this opportunity, we may lose it.”

Last month, Hopkins said the Sterling Bay would be unlikely to begin construction until the TIF plan is approved, despite having its zoning entitlements in line.

“They need to know how they’re going to budget for the infrastructure, and that’s going to be finalized in their redevelopment agreement with the city,” said the alderman, who was re-elected this year to his second term on the council.

The Cortland/Chicago River TIF would repay Sterling Bay with interest after the developer fronts hundreds of millions of dollars for major infrastructure projects on the city’s agenda, including the construction of three bridges and the realignment of the busy intersection of Elston, Ashland and Armitage avenues.

Under a similar agreement with Related Midwest, the Roosevelt/Clark district would help fund the construction of a new CTA Red Line station at 15th Street, along with a series of roadway overhauls.

Representatives of Sterling Bay and Related Midwest did not immediately respond to requests for comment on Monday.


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