search

The Real Deal Logo

Trending

Mohamed Hadid files for bankruptcy on Beverly Hills lot, owing $55M to creditorsMohamed Hadid files for bankruptcy on Beverly Hills lot, owing $55M to creditors99 Cents closures to open 3.8M sf of retail opportunities in SoCal 99 Cents closures to open 3.8M sf of retail opportunities in SoCal LA court strikes down SB9 law allowing single-family lot splitsLA court strikes down SB9 law allowing single-family lot splitsNYCB loan defaults surge 400% as rent-stabilized buildings bleedNYCB loan defaults surge 400% as rent-stabilized buildings bleed
Politics
Chicago

What Mayor Johnon’s TIF drawdowns could mean for real estate

Under budget plan, city will receive 24% of $434M surplus in TIF funds

What Mayor Johnon’s TIF Drawdowns Could Mean for Real Estate
Mayor Brandon Johnson (Getty)

With Mayor Brandon Johnson’s first budget proposal, Chicago may strike a balance between his progressive priorities and financial constraints by steering clear of property tax hikes while relying on tax-increment financing revenues often used by developers to close the city’s deficit.

Under the budget plan, the city would receive 24 percent of the $434 million surplus in TIF funds, a move that has been employed in previous Chicago budgets to address fiscal shortfalls, Crain’s reported. While TIF funds provide a temporary financial solution, they are not a sustainable long-term revenue source, according to 32nd Ward Alderman Scott Waguespack.

Still, the use of TIF surplus is not expected to thwart ongoing initiatives like the Invest South/West program or the conversion of vacant offices into affordable housing on and near LaSalle Street in the Loop, a former official of the Lori Lightfoot administration told the outlet. Those programs would rely on TIF mechanisms that offer developers temporary property tax breaks and can reimburse them for work on public infrastructure that’s required as part of their real estate projects.

Alderman Walter Burnett of the 27th Ward emphasized the need to safeguard existing commitments to TIF-funded initiatives in his district. He expressed concerns about the budget diverting TIF dollars away from projects in Skinner Park, Cabrini Green and Touhy-Herbert Park, all of which rely on the funds.

Sign Up for the undefined Newsletter

“I have a lot of things in the hopper to be done,” he told the outlet. “I got to make sure those things that had commitments for TIF continue to go on.”

Progressive groups, including the Chicago Teachers Union and United Working Families, have welcomed the budget for its commitments to spend $4.8 million on reopening mental health centers and $900,000 to reestablish the city’s Department of the Environment.

Critics, however, argue that the budget’s allocation of TIF surplus is a limited step compared to the more extensive progressive promises made by Johnson during his campaign.

— Quinn Donoghue

Read more

Companies and People
Brandon Johnson
Tags
BudgetInvest South/WestLaSalle Street ReimaginedTax-increment financingTIF