WHAT WE WILL COVER

• WHAT TIFS ARE, HOW THEY WORK, AND THEIR IMPACT
• 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: ABC’s 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 DIDN’T
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, GAPER’S 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.

Sign up to vote on this title
UsefulNot useful

Master Your Semester with Scribd & The New York Times

Special offer for students: Only $4.99/month.

Master Your Semester with a Special Offer from Scribd & The New York Times

Cancel anytime.