What gets funded when

South Loop district slated for closure, despite project talks

12/23/2009 10:00 PM

By MICAH MAIDENBERG
Editor

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How money collected by a special taxing district on the edge of the South Loop will be spent has proved to be a moving target this fall and winter.

The Calumet-Cermak Tax Increment Financing district was created in 1998. Stretching over 11 acres near McCormick Place, the district contains more than $59 million, according to its most recent annual report.

What it didn’t contain were active projects using up that money, said Pete Scales, a spokesman for the city’s budget department. The only spending detailed in its latest annual report were two disbursements for city employees working on TIF programs.

Tax increment financing districts are designed to create economic development in blighted areas. TIFs freeze property taxes sent to local taxing bodies within district boundaries. Any new taxes collected above the frozen rate can be used for a wide range of projects within the district.

With no active projects, the Calumet-Cermak district was slated for closure in the 2010 city budget, a spending plan aldermen approved 38-12 this month.

The Chinatown Basin district, a few miles to the west, was also voted closed as part of the budget pact. Shuttering both will send $8 million back to the city’s coffers; the remaining money in each will be distributed to other taxing bodies, such as the board of education and park district.

Even as the Calumet-Cermak district faces its demise, the city is negotiating with an unnamed private entity for a future potential TIF-supported project in the Calumet and Cermak area.

The existence of that project was made public on a list the Chicago Reader obtained through the Freedom of Information Act and recently published online. The list, which the city has now posted to its Web site, shows various projects that tax increment financing dollars will fund or potentially fund through 2011.

Among the items included in the Calumet-Cermak district was a “Potential Redevelopment Project” costing $60 million. Molly Sullivan, a spokeswoman for the Department of Community Development, declined to discuss specifics of that project because she said talks with the unnamed entity are ongoing.

Asked why the city would close a district while it’s negotiates for a possible new project, Sullivan said the city could “de-TIF” and then “re-TIF” the area, a move that would be subject to a vote in city council.

Under this scenario, the unspecified $60 million project “could be refunded and the money reappropriated under a new TIF. The city is not saying that’s going to happen,” Sullivan said. But such a move is “entirely possible under the law.”

There would be new boundaries, and a longer life span for the TIF district should one be recreated in the area after the Calumet-Cermak district is closed.

Sullivan emphasized that she did not know if this was the scenario being contemplated, only that it was allowable.

This fall, it appeared that money in the Calumet-Cermak district might pay for a long-discussed new station on the Green Line.

South Loop residents first gathered more than a year ago at a planning session held to discuss a new Green Line stop at either 18th or Cermak.

In October, the Chicago Reader published lists of projects funded by TIF dollars, or possibly so, that three aldermen, including 2nd Ward Ald. Robert Fioretti, shared with the newspaper.

The 2nd Ward project list showed two multimillion-dollar transfers from the Calumet-Cermak district to the Michigan-Cermak district, which includes the Green Line.

The transfers were, under this earlier list, to possibly take place this year and next. The first totaled $25 million, the other $13 million.

But no mention of a new Green Line station — at either 18th or Cermak — appears in the more current, citywide TIF project list.

Sullivan said a Green Line stop on the Near South Side won’t be funded by TIF dollars.

“It’s possible different funding streams could be found,” Sullivan said. The potential $60 million redevelopment project did not use up available funds for a Cermak stop, according to Sullivan.

Fioretti said he did not have information about the $60 million negotiations.

He said his priorities for TIF money in the South Loop included a new Jones College Preparatory High School facility and a new stop on the Green Line, at 18th.

Where all the money will fall isn’t clear just yet, Fioretti said.

Contact: mmaidenberg@chicagojournal.com


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