VALLAS’ STATEMENT:

I am joining with the coalition calling for a delay of the TIF for Lincoln Yards that I spoke with earlier today at City Hall. We should not be approving any more TIF’s, or even TIF expansions, until there is a new mayor in office.

The City needs a new paradigm for using Tax Increment Financing (TIF). Major redevelopment projects, such as Lincoln Yards, are essential for the City to grow and thrive, but they must also be fully vetted and supported by the community. They must also be able to leverage City investment in Chicago’s poor and long-neglected communities. Further, the City must provide greater transparency to taxpayers to clearly show how their tax money is being used and how they benefit from the investment of their funds.

The current “game show” approach in which winning developers are showered with goodies and taxpayers pick up the tab has grossly failed the city time and again. Those days must end. Under a Vallas administration, developers will have a clear roadmap for how the City will grant TIF funds and other financial investments to assist in the necessary growth projects for our city.

The Vallas approach will end the current practice in which the mayor has the power to play favorites which opens the door to the possible extraction of personal quid pro quos while making decisions with taxpayer money.

Developers should have a clear understanding of what the city can offer so that they can make decisions confidently on how new projects can be structured financially. There must also be a clear understanding that any development that involves TIF will include a “fair share” provision that sets aside a portion of the increment growth for development efforts in long neglected communities for which TIF’s are not a viable economic development tool.

As for taxpayers, since they bear the cost of these outlays, they should be able to understand how they benefit. Currently they have no clue what they get in exchange for the billions of dollars of their money that has been spent on TIF over the years.  What the taxpayers do see is their money going out the door never to come back, while their own property taxes, fees and fines surge, and while crime runs rampant, schools underperform, budget crises linger endlessly, and infrastructure in many parts of the City deteriorates.

The taxpayers deserve to know what they are getting for these massive investments, that communities throughout the City are benefiting from them and that full transparency is the rule. This will happen under a Vallas administration.

KEY COMPONENTS OF A NEW TIF PARADIGM

  • All existing TIF’s should be assessed for progress and retired early if warranted. Even with successful TIFs, none should be allowed to be extended beyond their original lives.
  • A minimum of one-third of all TIF proceeds should be dedicated to a Chicago Equity Investment Fund (CEIF) to provide capital for investment in blighted areas of the City, with priority given to the 133 federally-designated Opportunity Zones.
  • TIF revenues and other City subsidies and grants to businesses and developers should be made in the form of an “equity investment,” allowing the City to realize a return on its investment that can in turn be used for other future investments.
  • The drawing of TIF boundaries should be as narrow as possible to ensure that they do not capture and divert existing property tax growth revenues away from the schools and other local governments, thereby shifting even more tax burden onto other taxpayers.
  • Full transparency on how TIF proceeds will be used, with “claw back” provisions for developers that don’t live up to their commitments.”