Here is a copy of the presentation I did for the Chicago West Side Branch NAACP Community Concerns Panel. This was a part of their housing resource forum held on June 29, 2014. The presentation shares lessons learned from TIF advocacy in North Lawndale and covered the following: What tifs are, how they work, and their impact; Common TIF programs; Case study-Ogden Pulaski TIF in North Lawndale; Lessons learned
Here is a copy of the presentation I did for the Chicago West Side Branch NAACP Community Concerns Panel. This was a part of their housing resource forum held on June 29, 2014. The presentation shares lessons learned from TIF advocacy in North Lawndale and covered the following: What tifs are, how they work, and their impact; Common TIF programs; Case study-Ogden Pulaski TIF in North Lawndale; Lessons learned
Here is a copy of the presentation I did for the Chicago West Side Branch NAACP Community Concerns Panel. This was a part of their housing resource forum held on June 29, 2014. The presentation shares lessons learned from TIF advocacy in North Lawndale and covered the following: What tifs are, how they work, and their impact; Common TIF programs; Case study-Ogden Pulaski TIF in North Lawndale; Lessons learned
COMMON TIF PROGRAMS CASE STUDY-OGDEN PULASKI TIF IN NORTH LAWNDALE LESSONS LEARNED WHAT IS A TIF? A TIF (TAX INCREMENT FINANCING) DISTRICT IS AN AREA WITHIN A CITY THAT, AFTER MUCH CAREFUL STUDY BY THE CITY AND EXPERT CONSULTANTS, IS FOUND TO BE BLIGHTED AND WITHOUT HOPE OF ATTRACTING PRIVATE INVESTMENT WITHOUT SOME GOVERNMENTAL INTERVENTION. Source: ABCs of Tax Increment Financing HOW TIFS WORK "FREEZING" THE TAX BASE AND COLLECTING "INCREMENT" TIFS ARE POLITICALLY APPEALING TOOLS BECAUSE THEY DO NOT REQUIRE THE CITY TO RAISE YOUR TAX RATE. INSTEAD, TIFS GENERATE MONEY FOR REDEVELOPMENT BY RAISING THE VALUE OF THE PROPERTY THAT IS TAXED. (RAISING THE VALUE OF THE BASE UPON WHICH WE ARE TAXED) IT WORKS LIKE THIS: WHEN THE TIF IS ESTABLISHED, THE COUNTY LOOKS AT THE VALUE OF ALL THE PROPERTY IN THE TIF. (THE COUNTY USES THE TERM "EAV," OR "EQUALIZED ASSESSED VALUE," TO DESCRIBE PROPERTY VALUE.) THIS IS THE "BASE EAV.
Source: Cook County Clerk website TIFS CAPTURE MONEY BY DEVOTING ALL NEW PROPERTY TAXES TO REDEVELOPMENT. THAT MEANS THAT ONCE A TIF IS ESTABLISHED, TAXING BODIES (THE CITY OF CHICAGO'S GENERAL TREASURY, THE CHICAGO PUBLIC SCHOOLS, THE CHICAGO PARK DISTRICT, ETC.) GET NO NEW REVENUE FROM THE TIF. THEIR SHARE OF THE PROPERTY TAXES IS "FROZEN" AT THE LEVEL IT WAS AT JUST BEFORE THE TIF WAS APPROVED. THE TAXES ON ALL THE NEW PROPERTY VALUE IN THE TIF GO INTO THE TIF FUND AND ARE REINVESTED IN THAT AREA. OVER TIME, THE TIF GETS MORE TAX REVENUE THAN THE GENERAL FUNDS OF THE TAXING BODIES FROM WHICH THE TAXES WERE DIVERTED WHEN THE TIF WAS CREATED
Source: Cook County Clerk website WHERE DOES THIS NEW PROPERTY VALUE COME FROM? IT CAN COME FROM THREE SOURCES. 1. NEW DEVELOPMENT ON VACANT LAND THAT, BEFORE THE NEW PROJECT WAS BUILT, PAID LITTLE OR NO TAXES. 2. IMPROVEMENTS TO EXISTING PROPERTIES, SUCH AS AN ADDITION TO A HOUSE, A FACTORY, OR A STORE. 3. TAXES ON EXISTING PROPERTIES COULD GO UP, EITHER BECAUSE OF INFLATION (SOMETIMES CALLED "NATURAL GROWTH" IN PROPERTY VALUES) OR BECAUSE OF GENTRIFICATION IN THE NEIGHBORHOOD. IN ANY OF THESE CASES, THE NEW TAX DOLLARS GO TO THE PROJECT FUND CONTROLLED BY THE TIF DISTRICT, NOT TO THE CITY, THE SCHOOLS, OR ANY OTHER TAXING BODY. MONEY CAN BE TRANSFERRED BETWEEN TIFS, BUT ONLY BETWEEN ADJACENT TIFS.
Source: Cook County Clerk website EXAMPLE Source: Modified from Cook County Clerk website example Step Description Amount Total Taxes Amount to Taxing Bodies Amount to TIF 1. Base EAV The total value of all property in the TIF just before the TIF district was established.
$10,000,000 $1,000,000 $ 1,000,000 $ - 2. Year One EAV The total property value of the TIF one year after it was created.
$11,000,000 $1,100,000 $ 1,000,000 $ 100,000 3. Growth in EAV The difference between the Base EAV and the current EAV.
$1,000,000 4. Tax Rate The percentage of EAV (property value) that goes to taxes.
10% 5. Increment The growth in property value multiplied by the tax rate - i.e., the new taxes that go to the TIF fund.
10% LONG TERM IMPACT OF TIFS Source: Wikipedia TIF PROGRAMS NEIGHBORHOOD IMPROVEMENT PROGRAM (NIF) TIFWORKS SMALL BUSINESS IMPROVEMENT FUND (SBIF) STREAMLINED TIF RIVERFRONT IMPROVEMENT FUND LABORATORY FACILITIES FUND
Source: City of Chicago website. CASE STUDY OGDEN-PULASKI TIF
OGDEN-PULASKI TIF PROJECT GOALS COMMUNITY THAT IS STABLE, ECONOMICALLY AND RACIALLY DIVERSE, SECURE AND BEAUTIFUL
COMPREHENSIVE HOUSING PROGRAM THAT SERVES HOMEOWNERS AND RENTERS OF ALL INCOME GROUPS
REVITALIZED COMMERCIAL BASE HIGHLIGHTED BY OGDEN AVENUE AS THE MAIN CORRIDOR
PRESERVATION AND ENHANCEMENT OF HISTORIC OR ARCHITECTURALLY SIGNIFICANT BUILDINGS IN THE PROJECT AREA
NEW INVESTMENT AND DEVELOPMENT OPPORTUNITIES BOUNDARIES
Particulars Sponsors/Developers-City of Chicago, LISC, Steans Family Foundation, LCDC Consultant- Johnson Research Group Wards-24,22 Date Created-4/9/08 Termination-4/9/33 Uses-Residential,Commercial TIFWorks Eligible
There are approximately 173 blocks 133 blocks (77%) are in the 24 th Ward 40 blocks (23%) are in the 22 nd Ward
PROJECT HIGHLIGHTS UP TO 20,000 SQUARE FEET COMMERCIAL DEVELOPMENT ALONG OGDEN AVENUE, PULASKI AVENUE, 16 TH STREET (COMBINATION COMMERCIAL AND RESIDENTIAL) POTENTIAL RE-ZONING OF THE AREA IN THE VICINITY OF KEDZIE AVENUE AND CERMAK ROAD FROM RESIDENTIAL TO COMMERCIAL/LIGHT MANUFACTURING. UP TO 300 UNITS OF NEW HOUSING (INCLUDING AFFORDABLE HOUSING UNITS) NEW JOB OPPORTUNITIES FOR LOCAL RESIDENTS, INCLUDING WELFARE TO WORK PROGRAMS AND JOBS FOR EX-OFFENDERS. ISSUES
THE PLAN CALLED FOR RACIAL AND ECONOMIC DIVERSITY, BUT DIDNT ARTICULATE HOW THIS WOULD BE ACHIEVED. THIS WAS OF PARTICULAR CONCERN IN A COMMUNITY THAT IS CURRENTLY 93% AFRICAN AMERICAN, WITH A MEDIAN INCOME OF $18,342.
THE PLAN WAS NOT DEVELOPED WITH BROAD BASED COMMUNITY INPUT. THERE WAS NO INDICATION THAT THE CITY DEPARTMENT OF PLANNING AND DEVELOPMENT WOULD BE WILLING TO CHANGE THE PROPOSED REDEVELOPMENT PLAN AND BUDGET TO TAKE INTO ACCOUNT THE SUGGESTIONS PROVIDED DURING THE TWO PUBLIC MEETINGS THEY CONVENED ON THE TIF.
THERE WERE NO MECHANISMS IN PLACE FOR COMMUNITY OVERSIGHT FOR DEVELOPMENT IN THE LAWNDALE COMMUNITY. THE LAWNDALE COMMUNITY CONSERVATION COUNCIL WAS DISSOLVED SEVERAL YEARS AGO. THERE IS NO TIF ADVISORY COUNCIL.
THE WILL OF LOCAL PROPERTY OWNERS-- WHO COLLECTIVELY WILL PAY OVER $250,000,000 IN PROPERTY TAXES OVER THE NEXT 23 YEARS-SEEMS TO HAVE BEEN IGNORED IN FAVOR OF A HANDFUL OF INFLUENTIAL FOUNDATIONS AND TAX-EXEMPT ORGANIZATIONS.
UP TO 1,200 PERSONS COULD HAVE POTENTIALLY BEEN DISPLACED AS A RESULT OF THE IMPLEMENTATION OF THE PROPOSED TIF (317 OCCUPIED HOUSING UNITS). LIKEWISE, 635 RESIDENTIAL UNITS (1,200 PEOPLE) COULD BE IMPACTED BY BUILDING CODE VIOLATIONS.
THE PLAN CALLED FOR THE ACQUISITION OF OVER 1,600 VACANT PROPERTIES TO BUILD 300 UNITS OF HOUSING, THE EQUIVALENT COMMERCIAL SPACE OF 1 JEWEL/OSCO STORE AND SOME OPEN SPACE.
THERE WERE A SUBSTANTIAL NUMBER OF ERRORS IN THE ACQUISITION PLAN AND THE LIST OF HOMES POTENTIALLY DISPLACED BY THE TIF.
PROJECT SUMMARY MAJOR PROJECTS ACTUAL SBIF 2010 PRIVATE FUNDING- $2,000,000 TIF FUNDING-$1,000,000 2011 ALLOCATION-$333,333 SPECULATIVE LAWNDALE CORRIDOR INITIATIVE CONCEPT, JULY, 2008 PROJECTS OUTLINED IN FEBRUARY, 2008, GAPERS BLOCK INTERVIEW WITH ALDERMAN MUNOZ CTA BUS BARN OPEN SPACE SENIOR HOUSING INDUSTRIAL CORRIDOR
BUDGET Funds Expended to Date 2010 Fund Balance-$3,860,030 % to TIF in 2010-21% % to General Fund in 2010-79% Revenues Since Inception-$3,923,452 2010 Revenues-$2,354,679 2010 Expenditures-4$1,934 Beginning EAV- $216,455,015 2010 EAV- $289,789,402 % Growth in EAV- 33% Project Type Amount Analysis, Administration, Studies, etc. $7,500,000 Property Acquisition, Site Prep, etc. $10,000,000 Rehabilitation of Existing Buildings $35,000,000 Public Improvements $30,000,000 Relocation Expenses $5,000,000 Job Training/Welfare to Work $2,500,000 Day Care Services $6,000,000 Interest Subsidy $4,000,000 Total $100,000,000 LESSONS LEARNED NORTH LAWNDALE COMMUNITY
1. Know the issues surrounding the creation of the TIF
2. Know the approval process and the rules of engagement
3. Know the laws, ordinances, policies and plans that drive the TIF
4. Know what questions to ask
5. Analyze the redevelopment plan from your vantage point
6. Find allies who share common interests 13 TIPS FOR EFFECTIVE ADVOCACY 7. Know your rights and legal standing
8. Understand the ethics behind the plan
9. Know where your elected officials stand
10. Keep your constituency informed of the latest developments
11. Be transparent in your communications
12. Accept the consequences of your actions
13. Document your work RECOMMENDATIONS CREATE MECHANISMS FOR LOCAL CONTROL TIF ADVISORY COUNCILS BRING BACK NORTH LAWNDALE COMMUNITY CONSERVATION COUNCIL PARTICIPATORY BUDGETING CREATE/STRENGTHEN LOCAL BLOCK CLUBS, COMMUNITY ASSOCIATIONS AND COMMUNITY DEVELOPMENT ORGANIZATIONS FURTHER INFORMATION FOR FURTHER INFORMATION REGARDING THIS PRESENTATION, CONTACT VALERIE F. LEONARD AT 773-521-3137 OR CONSULTING@VALERIEFLEONARD.COM. THIS PRESENTATION HAS BEEN ARCHIVED AT WWW.VALERIEFLEONARD.COM AND HTTP://LAWNDALEALLIANCE.BLOGSPOT.COM. YOU MAY VISIT THESE BLOGS TO REVIEW ARCHIVED FILES FROM THE LAWNDALE ALLIANCE AND GET UPDATES ON COMMUNITY AND ORGANIZATIONAL DEVELOPMENT.