What is the amendment – and what is its purpose?

First, TIF stands for Tax Increment Financing. This financial tool was created by the state to help foster development in areas where development was unlikely. The purpose of TIF is to add value to the entire community. They work by taking a snapshot of the current value of all property designated within the TIF District and then estimating the increase in value over a 23 year period as a result of future development. This increase (or increment) can then be used to finance development as well as for other uses designated by state law. This was the case with the Wilson Yard Development (at Broadway & Montrose) and Wilson Yard Tax Increment Financing District.

The proposed amendment is possible only because the Wilson Yard TIF has already increased property value in the community. The specific purpose of the amendment is to access that new value by increasing the TIF budget.The proposed amendment will also add several properties to the City’s acquisition list. Those properties are the former Salvation Army site at Sunnyside & Broadway and the vacant lots at Sheridan & Agatite. The Salvation Army site will become a “Farmer’s Market and Green Educational Center,” while the Sheridan/Agatite lots will be opened for competitive bidding to create off-street parking. It is important to note that after a property is placed on the acquisition list, there is a three year window to do something with the land.

When the TIF district was first created, it was with a budget that followed state guidelines. The State has laid out a series of categories.  All TIF expenses must fall within one of those categories.  When we established the Wilson Yard TIF District in 2001, we had a budget of $58 million in 2001 dollars. That figure was reached through a study of how much increment the TIF was expected to create over its 23 year life.  Expenditures are reported in the Wilson Yard Annual Reports.

Now, a new study has been completed and based on the level of development that has already taken place in the TIF District, the budget has increased to $112 million. This will allow us to spend money on the following allowable costs:

1. Infrastructure improvements
2. Public Transportation improvements
3. Local School improvements
4. Park District improvements
5. Improvements of Truman College
6. Public Way improvements such as street & alley paving, street & alley lighting, and sidewalk improvements
7. The preservation of affordable housing

These items and the aforementioned acquisitions are the only things that the new funds will be spent on. No new money will spent on the Wilson Yard development itself (at Broadway & Montrose).

To spend any of TIF money in the future (as in the past) requires an amendment passed by the Chicago City Council, as well as redevelopment agreements with any private developers and intergovernmental agreements with all taxing bodies. Those actions also require Council approval.

Why is it better to spend this money rather than return it to the taxing bodies?

We are actually contributing this money either directly or indirectly back to the taxing bodies – and the money is being spent locally. In some ways it is a much more equitable use of tax dollars. This money will go to the parks, schools, CTA, City Colleges and City of Chicago Departments that would not be available otherwise.

For example, the money going to Truman College will enable them to enroll more students, therefore increasing their revenue and educating more Chicago residents. And the same goes for the other taxing bodies. And even the Wilson Yard development itself is saving the Water Reclamation District money through the use of green technology which captures rainfall that would otherwise wash into their system and need to be treated.

By the end of the life of this TIF, we will have dramatically increased the property values in the area and the taxes received by all taxing bodies far beyond what they would have received otherwise.