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13 Tips for Effective TIF Advocacy
Presented the Washington Park Community by Valerie F. Leonard of the Lawndale Alliance
•Washington Park Advisory Council •Washington Park Neighborhood Association •Washington Park Concerned Residents •Washington Park Neighborhood Association
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
1) Source: City of Chicago website .TIF Eligibility Factors • Under state law. areas proposed for TIF designation must possess numerous blighting factors to be eligible: -Age -Obsolescence -Code violations -Excessive vacancies -Overcrowding of facilities -Lack of ventilation. sanitary facilities -Excessive land coverage – Inadequate utilities – Deleterious land use or layout – Lack of physical maintenance – Lack of community planning – Dilapidation or deterioration TIF assistance for eligible projects usually exceeds $1 million. light.
" or "Equalized Assessed Value. the County looks at the value of all the property in the TIF." to describe property value. (The County uses the term "EAV.) This is the "Base EAV. Instead. TIFs generate money for redevelopment by raising the value of the property that is taxed.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. (raising the value of the base upon which we are taxed) ▫ It works like this: When the TIF is established.“ Source: Cook County Clerk website .
the Chicago Public Schools. taxing bodies (the City of Chicago's general treasury. That means that once a TIF is established.) get no new revenue from the TIF. • The taxes on all the new property value in the TIF go into the TIF fund and are reinvested in that area. the Chicago Park District. Their share of the property taxes is "frozen" at the level it was at just before the TIF was approved.How TIFs Work • TIFs capture money by devoting all new property taxes to redevelopment. • 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 . etc.
3. not to the City. or any other taxing body. either because of inflation (sometimes called "natural growth" in property values) or because of gentrification in the neighborhood. Improvements to existing properties. 2. but only between adjacent TIFs. paid little or no taxes. Taxes on existing properties could go up. • In any of these cases. such as an addition to a house.How TIFs Work • Where does this new property value come from? It can happen in one of three ways. Money can be transferred between TIFs. the schools. a factory. New development on vacant land that. Source: Cook County Clerk website . 1. or a store. the new tax dollars go to the project fund controlled by the TIF district. before the new project was built.
. Increment 10% Source: Cook County Clerk website . the new taxes that go to the TIF fund. The total property value of the TIF one year after it was created.i.000.000.e. The percentage of EAV (property value) that goes to taxes. Tax Rate 10% 5.000. The difference between the Base EAV and the current EAV.000 4. Growth in EAV $1.000 TIF just before the TIF district was established.Here's an example: Example Step 1. Base EAV Description Amount The total value of all property in the $10. The growth in property value multiplied by the tax rate .000 2. $11. Year One EAV 3.
Long Term Impact of TIFs Source: Wikipedia .
TIF Programs ▫ ▫ ▫ ▫ ▫ Neighborhood Improvement Program TIFWorks Streamlined TIF Riverfront Improvement Fund Laboratory Facilities Fund Source: City of Chicago website. .
Ogden-Pulaski TIF .
22 Date Created-4/9/08 Termination-4/9/33 Uses-Residential. economically and racially diverse. LCDC Consultant.Commercial TIFWorks Eligible ▫ Preservation and enhancement of historic or architecturally significant buildings in the Project Area ▫ New investment and development opportunities .Ogden-Pulaski TIF There are approximately 173 blocks 133 blocks (77%) are in the 24th Ward 40 blocks (23%) are in the 22nd Ward • Project Goals ▫ Community that is stable. secure and beautiful ▫ Comprehensive housing program that serves homeowners and renters of all income groups • Boundaries ▫ Revitalized commercial base highlighted by Ogden Avenue as the main corridor Particulars Sponsors/Developers-City of Chicago. Steans Family Foundation. LISC.Johnson Research Group Wards-24.
• Up to 300 units of new housing (including affordable housing units) • New job opportunities for local residents.000 square feet commercial development along Ogden Avenue. including welfare to work programs and jobs for ex-offenders. 16th 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. Pulaski Avenue.Project Highlights • Up to 20. .
Likewise. There is no TIF Advisory Council. with a median income of $18. • There are no mechanisms in place for community oversight for development in the Lawndale community. • The plan calls for racial and economic diversity. This is of particular concern in a community that is currently 93% African.000 in property taxes over the next 23 yearsseems to be ignored in favor of a handful of influential foundations and taxexempt organizations. 635 residential units (1.Issues • The will of local property owners-. There is no indication that the City Department of Planning and Development is 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. • The plan was not developed with broad based community input. • There are a substantial number of errors in the acquisition plan and the list of homes potentially displaced by the TIF. • Up to 1.200 people) could be impacted by building code violations.200 persons could be potentially displaced as a result of the implementation of the proposed TIF.342.who collectively will pay over $250. The Lawndale Community Conservation Council was dissolved several years ago. . but does not articulate how this would be achieved.000.
000.000 $5.679 2010 Expenditures-4$1.500. Property Acquisition. Site Prep.333 ▫ Speculative Interest Subsidy Total $4.000.000 $100.000.860. 2008 Projects outlined in February.000 $30. etc.000 $10.000 2011 Allocation-$333.000 $2.000 TIF Funding-$1. 2008. etc.015 2010 EAV.000 ▫ Actual SBIF 2010 Private Funding$2.934 Beginning EAV.452 2010 Revenues-$2.000 Funds Expended to Date 2010 Fund Balance-$3.000 $35. July.923.402 % Growth in EAV.000.000. Administration.• Budget Project Type Analysis.000.500.$216.33% Lawndale Corridor Initiative Concept. Studies.789.354.000.030 % to TIF in 2010-21% % to General Fund in 2010-79% Revenues Since Inception-$3. Rehabilitation of Existing Buildings Public Improvements Relocation Expenses Job Training/Welfare to Work Day Care Services • Major Projects Amount $7.000 $6.$289.000.000. Gaper’s Block Interview with Alderman Munoz CTA Bus Barn Open Space Senior Housing Industrial Corridor .455.
Kildare. 16th to Ogden Residential Lighting .000. 21st St.000.Cullerton.00) (25.00) (195.00 (500. Residential Lighting .736.500.000.00) 8. Kedvale.00) (250.Lawndale. Roosevelt to 19th Small Business Improvement Fund Small Business Improvement Fund Small Business Improvement Fund Residential Lighting .Grenshaw/ Roosevelt/ Keeler/ Kildare Reimbursement for TIF Eligibility Study Lighting .000.Drake.00) (48. Cermak to Ogden Green Alley . Karlov. Ogden to Cermak Alley Reconstruction .00) (130.000.00) (500. 16th to 18th Lighting .Ogden-Pulaski TIF Projected Revenues and Expenses Item Incremental Property Tax Revenue (100% Collected) Incremental Property Tax Revenue (100% Collected) Incremental Property Tax Revenue (100% Collected) Unallocated Funds (Jan-11) Neighborhood Improvement Program Neighborhood Improvement Program Program Administration Program Administration Program Administration Street Resurfacing .00) (260.000.00) (287.Lawndale.Ridgeway Av.900. 16th to Ogden Alley Construction .200.00) (195.700.00) (49.000.00 3.000.Kevdale.040. Pulaski to Keeler Street Resurfacing .00) (100.00) (100.00) (500.000.00) (24.00) (390.00) (25.900.755.809.Komensky.00 3. Kostner Projected Remaining Balance 2013 Year 2011 2012 2013 2011 2011 2012 2011 2012 2013 2011 2011 2011 2011 2011 2011 2011 2011 2012 2013 2011 2011 2011 2011 2011 Amount 2.00) (295.000.700.000.00) (250.415..904.053.531.00 2.Harding.00 .736.00) (219.000.000.Cullerton.13th St.000.000. 16th to Ogden Lighting . 14th St.
Mixed Use Development Example Site: West Ogden Avenue and N.828 SF 5 Small Retail Stores Residential Space 68. Millard Street 6-Story.4 Million Loss: $100.000 Commercial Space 4. Millard Street 5-Story.000 SF 20% Affordable Total Cost: $16.6 Million Loss: $340.720 SF 30% Affordable Total Cost: $18.000 Commercial Space 13.Ogden-Pulaski TIF Lawndale Corridor Development Initiative Project Concepts Example Site: West Ogden Avenue and S.600 SF 10 Small Retail Stores . Mixed Use Development Residential Space 80.
000 SF 20% Affordable Commercial Space 8.160 SF 6 Small Retail Stores Total Cost: $22. Mixed Use Development Residential Space 95.000 .Example Site: 19th Street and Pulaski 3-5-Story.2 Million Loss: $645.
13 Tips for TIF Advocacy .
Tip #1: Know the Issues What factors led to the creation of the TIF? What are the current events in the community? How does the proposed plan address development issues? How does the manner in which the plan addresses the issues impact the community as a whole? Me as an individual? What do developers have to gain and how much? What do tax payers have to lose? Are the benefits greater than the cost? What is the proposed budget for the redevelopment plan? How were local taxpayers involved in the creation in the plan? If there are deficiencies in the plan. how can they be corrected? .
Tip #2: Know the Approval Process and the Rules of Engagement Public Community Meeting Introduction to Community Development Commission Review by the Joint Review Board Public Hearing before the Community Development Commission Introduction to City Council Review by City Council Finance Committee Approval by the Full City Council .
cityofchicago.) • City of Chicago Website (Go to www. Ordinances. City land sales.gov/and search under Tax Increment Financing to see what bills come up.ilga.Tip # 3: Know the Laws. interested party) • TIF Redevelopment Plan Ordinances • Housing Impact Study ▫ Ask Chicago Department of Planning and Development to see copies of any plans referenced in the TIF Redevelopment Plan ordinance .org and search under TIF. Policies and Plans that Drive the TIF • State Code (Go to the State of Illinois General Assembly website. freedom of information request. www.
Tip #4: Know What Questions to Ask What are the goals and objectives for the TIF? Are these in conflict with the best interests of the community? How do we make sure developers are held accountable to the community? How has this TIF and other TIFs in the community performed in the past? Have other TIFs lived up to their expectations? How many people from the community have been hired? Do they still have the jobs? How do we improve the skill level of our workforce and business community to take advantage of opportunities the TIF brings? How many local minority-owned businesses have received TIF assistance? How many home owners and local residents have received TIF assistance? What economic development plans are in place to supplement the TIF? How have our schools and parks been impacted? .
or what’s in it for you as a resident Will my taxes go up? Will I or my neighbors be displaced? Will my property be taken through eminent domain? If you are a business owner or leader of a chamber of commerce. read to learn how your taxes may be impacted. read to learn how you or your members may be impacted Does the plan bring in other businesses that are competitive with mine or my members? What incentives are offered to existing businesses? Will my business’ property or any of my members’ business properties be taken over through eminent domain? .Tip # 5: Analyze the Redevelopment Plan from Your Own Vantage Point If you are a resident.
Tip #6: Find Allies Who Share Common Interests Activists from other communities Politically connected or neutral people who have the ear of those you need to influence Elected officials who are promoting issues and ordinances that are consistent with your positions Research. policy and advocacy groups Local journalists and reporters Bloggers Community based organizations Engaged residents .
civil rights.)? • Has the TIF effectively discriminated against a group of people? . state and federal laws? • Has the TIF somehow deprived homeowners of any of their fundamental rights (property rights.Tip # 7: Know Your Rights and Legal Standing • Is the TIF being carried out in a manner consistent with the local. etc.
real estate developer. major land holder. nonpartisan political process? • Are the interests of low income taxpayers. adequately represented? What do they get out of the deal? • Do special interest groups have a greater voice than local residents? • Are there win-win strategies to minimize conflicts and even the playing field? . elected officials sit on boards of directors of organizations that sponsor or support TIFs. How do they handle the competing interests of the electorate and the community-based organization? • Is there potential for the plan to displace one group of people in favor of another? • Are advisory committees staffed through an open. real estate investor and the advisory group (if such a group exists)? • Is there a potential for divided loyalty? ▫ In some cases.Tip #8: Understand the Ethics Behind the Plan • Are there potential conflicts of interest? ▫ Is there adequate separation between the roles of planner. who must ultimately pay for and reimburse all costs.
State Representative. Cook County Commissioner.Tip #9: Know Where Your Elected Officials Stand on the Issues • Have meetings with Alderman. State Senator. Congressman. Senators • Host town hall meetings and other public meetings • Review voting records • Read articles in local press .
Tip #10: Keep Your Constituency Informed of the Latest Developments Telephone Door to Door Canvassing/Flyering CAN-TV Community Newspaper Ads and Articles Local and National Newspapers Radio Websites Blogs Newsletters Direct Mail E-Mail .
correct the mistake immediately. even if you have to simplify it for people who may not be familiar Never distribute flyers that could be intentionally misleading just to generate a crowd. The truth is more than sufficient to generate interest If you send out materials with errors of fact. even if it means retracting statements in the local newspapers.Tip # 11: Be Transparent in Your Communications Integrity is Key Utilize language of the City to the greatest extent possible when describing official proceedings. . through the same channels you provided the incorrect information.000’s of e-mails and mailers. or re-sending 1.
Tip # 12: Accept the Consequences of Your Actions Speaking Truth to Power has consequences Positive Effect changes to systems that result in win-win solutions Heightened awareness of the issues More engaged community Negative Attempts to discredit groups and their messages advocating change Leaders are often isolated and labeled as trouble makers Exclusion from key meetings by community “gatekeepers” Key stakeholders begin to “distance” themselves Retaliation .
Tip #13: Document Your Work • Note changes in systems. sign in sheets. . increase capacity of others. increased learning • Keep copies of meeting notices. receive constructive feedback and establish long term relationships. policies. meeting notes • Post as much documentation on websites and blogs as possible Focusing on past successes serves as encouragement when chips are down Communicating success maintains momentum Documentation of progress attracts others to your process Documenting mistakes helps you keep from repeating them Sharing lessons learned with others provides an excellent opportunity to promote your agenda.
. contact Valerie F. You may visit this blog to review archived files from the Lawndale Alliance.Further Information • For further information regarding this presentation. Leonard at 773-21-3137 or email@example.com. • This presentation has been archived at http://lawndalealliance.com.blogspot.