1

Neoliberalism on Trial: A History of Tax Increment Financing in Chicago1

By Chris Wright

In a world of continually increasing economic inequality, the subject of “tax increment

financing,” or TIF, is of far greater importance than one might infer from its lack of public
recognition. This tool of urban policy in the United States, used in 49 states and Washington, D.C.,
has contributed significantly to rising class polarization in cities and to the accumulation of
municipal debt, which has begun to reach crisis proportions since the recession of 2009. As
American municipalities grapple with the fiscal crisis of which pundits speak daily, and as social
movements are birthed to defend populations against the depredations of fiscal austerity, activists
and intellectuals will have to become more familiar with this thing called tax increment financing
if they are to influence policy and comprehend “The City’s” future.
In this paper, therefore, I will review the history of TIF in a single city, Chicago. Its use
began under Harold Washington in the mid-1980s, escalated under Richard M. Daley in the early
1990s, and then exploded after 1998. By the early 2000s, Chicago was widely viewed by scholars
and journalists as the poster child for what can go wrong with TIF, due to the inequitable,
autocratic, and un-transparent ways in which Daley deployed it. As we’ll see, TIF started out under
Harold Washington as a relatively democratic and effective tool to encourage development in
“blighted” neighborhoods; as its use became more common, however, it was appropriated for the
neoliberal project of subsidizing big property developers and siphoning wealth from the lower and
middle classes to the upper. This was manifested, for example, in the prosperity and the
beautification of the central business district and its environs at the expense of poorer
neighborhoods, and in the gentrification of areas near downtown. This history belongs not only to
Chicago but to many cities around the country, indeed all over the world. What I describe in the
paper can thus be considered emblematic of trends elsewhere and is usefully compared with them.
A great deal of scholarship and investigative journalism has been dedicated to tax
increment financing, but I have been unable to find a comprehensive history of the program in
Chicago. This paper is admittedly not quite comprehensive, being too brief, but it does adopt a
broad historical perspective apparently absent in the literature. My purpose is to outline a story of
neoliberal “declension,” from the popular hopes and democratic stirrings of the Harold
Washington years to the corporatizing, polarizing trends of the recent past.
This declensionist narrative is not new even in the “politically neutral” realm of academic
writing, but its application to Chicago’s history through the prism of tax increment financing is. A

1
[This is a student paper from 2012. It was brutal to write. Incredibly boring. But hopefully it will prove of
use or interest to someone out there.]
 2

number of scholars of neoliberalism have described how this political-economic system has
functioned to redistribute wealth upwards and exacerbate working-class insecurity. The celebrated
geographer David Harvey, for example, argues that neoliberalism began in the U.S. in the mid-
1970s, when New York City’s fiscal crisis gave investment bankers and their political
representatives an opportunity to undo many of the historic achievements of working-class New
York by dismantling much of the city’s social and physical infrastructure. Public resources were
used to build new infrastructure for finance, legal services, the media, and consumerism, as
“working-class and ethnic-immigrant New York was thrust back into the shadows, to be ravaged
by racism and a crack cocaine epidemic of epic proportions in the 1980s.”2 New York City’s
investment bankers thus paved the way for a political economy of privatization, the privileging of
financial institutions, and “urban entrepreneurialism,”3 all of which proceeded in the 1980s and
1990s to conquer not only the U.S. but much of the world.
The contributors to the volume Spaces of Neoliberalism: Urban Restructuring in North
America and Western Europe (2002) analyze some of the means by which neoliberalism has
spread across the world. Jamie Peck and Adam Tickell argue that, given high capital mobility,
cities are forced to compete against each other to attract business, by establishing “favorable
business climates.” What this entails is deregulation, the undermining of labor unions, and public
subsidies to multinational companies. “The serial reproduction of cultural spectacles, enterprise
zones, waterfront developments, and privatized forms of local governance” is the natural product
of this worldwide inter-urban competition. 4 In her contribution to the volume, Rachel Weber
argues that tax increment financing is an especially significant manifestation of urban
entrepreneurialism, in fact that “by the 1990s, TIF had become the most popular means of
financing redevelopment in the U.S.”5 That is to say, it was one of the most popular tools of urban
neoliberalism.
Two other recent works take dim views of neoliberalism as it has unfolded specifically in
Chicago: Paul Street’s Racial Oppression in the Global Metropolis: A Living Black Chicago
History (2007) and the collection The New Chicago: A Social and Cultural Analysis (2006), edited
by John P. Koval, Larry Bennett, et al. We’ll return to the latter work below; it consists of a series
of essays on seemingly every aspect of “the new Chicago,” including its economic restructuring,
the culture and politics of its immigrant populations, the policies of school reform, public housing,

2
David Harvey, A Brief History of Neoliberalism (New York: Oxford University Press, 2007), 57.
3
David Harvey, “From Managerialism to Entrepreneurialism: The Transformation in Urban Governance
in Late Capitalism,” Geographiska Annaler, Vol. 71, No. 1 (1989): 3-17.
4
Jamie Peck and Adam Tickell, “Neoliberalizing Space,” in Spaces of Neoliberalism: Urban Restructuring
in North America and Western Europe, eds. Neil Brenner and Nik Theodore (Malden, MA: Blackwell
Publishing, 2002), 46.
5
Rachel Weber, “Extracting Value from the City,” in Spaces of Neoliberalism, 187.
 3

the police force, urban beautification, etc. The essays on Chicago’s political economy describe
how the city has recently been trying to pursue both the “low-road” and the “high-road” strategy
of competing in the world, the first by offering cheap labor, lower taxes, and direct public subsidies
to business, and the second by emphasizing research, education, skilled workers, and high wages.
As David Moberg says, it will ultimately prove impossible to pursue both roads, since the low
undermines the potential for the high. But in the wake of deindustrialization—the closing of steel
mills and the stockyards, and the decline of printing and publishing, electronics and electrical
equipment, apparel, chemicals, fabricated metal products, etc.—the low road, the truly
“neoliberal” road, has proven to be the “path of least resistance,” the simplest strategy for attracting
global business.6
Paul Street, on the other hand, focuses on the tragedies of Chicago’s racial segregation,
which has in some ways been exacerbated by the policies of Richard M. Daley. Even during the
“booming” 1990s, regression occurred in Chicago’s “overall racial distribution of income, the
relative wealth of black and white neighborhoods, and the access of the black poor to public family
cash assistance and to affordable housing.” The percentage of blacks who experienced “deep
poverty” also got worse. Just between 1999 and 2004, for example, black poverty rose from 28.5
percent to 33.9 percent, compared to a decrease in the white poverty rate by two percentage points.
As Street says, “while white and Latino poverty declined in the city between 1999 and 2004, black
poverty fell back to its 1989 level, at the nadir of the urban crisis.”7 As I’ll argue, these levels of
inequality are inseparable from the pro-downtown policies Daley has pursued, in particular his
inequitable use of TIF.
It’s time, though, that we considered the fundamentals of tax increment financing, before
investigating its history in more depth. TIF was born in California in 1952, when the state
legislature recognized that the existence of “blighted” areas—“characterized by unsafe buildings,
incompatible adjacent land uses, and lack of necessary commercial facilities”—was hurting the
quality of life in California neighborhoods.8 However, TIF didn’t spread to many states until the
1970s and later, in the midst of the “urban crisis” caused by deindustrialization and white flight
from central cities. Federal aid to cities was decreasing around this time from its heights in the
1960s, and municipalities needed alternative means of encouraging development and raising
revenue. So some states turned to tax increment financing; for instance, Illinois passed TIF-

6
David Moberg, “Economic Restructuring: Chicago’s Precarious Balance,” in The New Chicago, eds. John
P. Koval et al. (Philadelphia: Temple University Press, 2006), 41.
7
Paul Street, Racial Oppression in the Global Metropolis: A Living Black Chicago History (New York:
Rowman & Littlefield Publishers, Inc., 2007), 220.
8
Matthew Gray and Cecily Barclay, “California: TIF and Community Development Law,” in Tax
Increment Financing, eds. David Callies and W. Andrew Gowder Jr. (Chicago: ABA Publishing, 2012),
37.
 4

enabling legislation in 1977. The basic idea behind TIF is that a government subsidizes
(re)development out of the higher tax revenue this development makes possible in the future (by
raising property values). The way it works is that the assessed value of all the property in a
particular TIF district is “frozen” at the time of the formation of the district; for the duration of the
TIF, local taxing bodies such as schools and park districts may tax only this frozen property value.
The tax revenue from growth (the “increment”) accrues instead to the TIF fund, “to be spent on
capital improvements, developer and rent subsidies, job training, and other expenditures meant to
spur new development.”9 In Chicago, the mayor is effectively able to disburse these funds as he
sees fit, with little accountability or transparency. A TIF district lasts for 23 years in Illinois
(though the option exists of extending it to 35); upon its expiration, the taxing bodies again have
access to all the property value of that former district.
One potential source of controversy with respect to TIF is already clear: it deprives
government bodies of tax revenue from development. If no development would have occurred but
for the existence of a particular TIF district, then of course this objection to tax increment financing
is baseless. In fact, this “but for” requirement is usually a key criterion for determining whether a
given TIF should be established. As we’ll see, however, many TIFs have been created in areas of
Chicago that were already developing, which means that taxing bodies have unfairly been
deprived of a certain amount of revenue. In a time when municipalities and school districts are
drowning in deficits, a lack of revenue is no trivial matter.
Later in the paper I’ll return to criticisms that have been made of TIF, in particular by
scholars, task forces, and journalists. Now, however, we’ll review the background to Richard M.
Daley’s embrace of TIF in the 1990s, focusing on the relatively progressive years of Harold
Washington’s mayoralty.

Washington was elected in 1983 on the back of a popular insurgency, an electoral uprising
against rule by the “Machine” that had been consolidated by Richard J. Daley and persisted into
the 1980s, albeit in a weaker and less efficient form than in the 1960s. Since the 1950s, this political
machine had functioned primarily in the interests of Daley’s downtown-oriented “pro-growth”
coalition of real estate developers, financial companies, large retailers, and other commercial
forces based in the central business district. It was this elite that determined the agenda of postwar
urban renewal, which tended to sacrifice the interests of neighborhoods and communities for the
sake of downtown revitalization and corporate profits. Popular resistance to the trampling of

9
Mike Quigley, A Tale of Two Cities: Reinventing Tax Increment Financing (2007), 1.
 5

neighborhoods’ and minorities’ rights had been growing in Chicago since the 1960s, and in 1983
it succeeded in electing a black mayor for the first time.10
The approach to development that Washington adopted is indicated by the title of his
administration’s 1984 economic plan, “Chicago Works Together.” On the first page are set out
the goals, namely “to create and retain jobs, to rebuild neighborhoods, to renew housing and the
City’s physical assets, to aid businesses, and to inform and involve the public at every step of the
way.”11 As the plan notes, most of these priorities are new: hitherto, job creation and neighborhood
development had been decidedly secondary to growth in the central business district. “Balanced
growth” thus became one of Washington’s slogans. Equally novel was the emphasis on
transparency and public participation, which Washington valued so highly that in the following
years his staff grew frustrated with the necessity to get the public’s input on decisions about
projects. Such a focus on democracy was wont to cause delays. 12
“Chicago Works Together,” which is some sixty pages long, is an extremely detailed and
ambitious plan that aims at nothing less than the renewal of Chicago’s infrastructure and economy
and the halting of deindustrialization. Its goals for 1985, for example, include the creation of over
10,000 permanent jobs (which could stimulate an additional 15,000 more jobs), job training for
12,000 people, the rehabilitation and construction of 6000 housing units, the provision of volunteer
architect assistance to neighborhood revitalization projects, the development of a long-term
economic strategic plan, the implementation of affirmative action programs, and the provision of
technical assistance to 4000 businesses. In the long run, a major goal was to prevent the further
erosion of industry in Chicago by establishing “planned manufacturing districts,” in which zoning
changes from manufacturing to commercial or residential designations would be prohibited. These
districts, which continued to be established in the 1990s, turned out to be one of Washington’s
most important legacies.13
The job-creating, worker-empowering, industry-protecting approach of the Washington
administration can be contrasted with that of Chicago’s commercial business elite as represented
by the Commercial Club. In December, 1984 this group published its own economic development

10
For the history of Chicago’s political economy in the postwar era, see Gregory Squires et al., Chicago:
Race, Class, and the Response to Urban Decline; Gregory Squires, ed., Unequal Partnerships: The Political
Economy of Urban Redevelopment in Postwar America (New Brunswick, NJ: Rutgers University Press,
1989); and Joel Rast, Remaking Chicago: The Political Origins of Urban Industrial Change (DeKalb,
Illinois: Northern Illinois University Press, 1999).
11
The Harold Washington administration, “Chicago Works Together”: Chicago Development Plan 1984
(Chicago, 1984), 1.
12
Elizabeth Hollander, “The Department of Planning under Harold Washington,” in Harold Washington
and the Neighborhoods: Progressive City Government in Chicago, 1983-1987, eds. Pierre Clavel and Wim
Wiewel (New Brunswick, NJ: Rutgers University Press, 1991), 143.
13
“Chicago Works Together,” 1, 5, 11, 12, 14; Rast, Remaking Chicago, 116.
 6

plan, entitled Make No Little Plans: Jobs for Metropolitan Chicago. Job creation was clearly not
its primary goal, but the plan was given its subtitle in recognition of the new political atmosphere
fostered by Washington’s mayoralty. The Commercial Club’s report barely mentioned traditional
manufacturing at all, focusing instead on financial services, retail, communications, high-tech
industry, tourism, the marketing of Chicago for international business, and in general the creation
of a “favorable business climate.” What the last point entailed, as the report frankly admitted, were
reductions in the costs of workers’ compensation and unemployment insurance. Needless to say,
this commercial agenda did not receive a very sympathetic hearing by the Washington
administration—or, at least, not as sympathetic a hearing as it would later by the second Daley.
Tax increment financing did not figure centrally in Washington’s plans. In fact, from 1983
to 1987 (the years when Washington was mayor), only three TIF districts were established. The
mayor adhered strictly to the idea that TIF should be used only to help blighted communities,
neighborhoods that had little hope of growth without assistance from the government.
Accordingly, a TIF district (of six acres) was designated in West Ridge, a relatively impoverished
community on the north side of Chicago; another, of ten acres, was designated in the low-income
community of Washington Park on Chicago’s south side; a third, of 27 acres, was in the North
Loop, which was suffering from “decay and obsolescence.”14 The TIFs in West Ridge and
Washington Park provided resources for such things as environmental remediation, demolition, a
new retail center, and several other commercial structures for nearby residents; the funds went to
“utility relocation, street and sidewalk improvements, security features, traffic signalization, and
job training.”15 These two TIF districts proved to be quite successful, having generated by the time
of their expiration a compound annual growth rate in total property values of 9% (in West Ridge)
and 20% (in Washington Park).16
The North Loop TIF was a much bigger affair. The project to redevelop the North Loop
already had a ten-year history of setbacks and failures when Washington came to power. A 1984
report by the Washington administration noted that the neighborhood “is not perceived as an
attractive or safe area, particularly after office hours. State Street retail sales volumes and the
quality of merchandise have fallen, and entertainment and cultural facilities and programming have

14
Illinois Department of Commerce and Community Affairs, Office of Urban Assistance, Tax Increment
Financing: Case Studies (1986), 5.
15
City of Chicago, Housing and Economic Development, “Ryan/Garfield TIF” at
http://www.cityofchicago.org/city/en/depts/dcd/supp_info/tif/ryan_garfield_tif.html and “West
Ridge/Peterson TIF” at
http://www.cityofchicago.org/city/en/depts/dcd/supp_info/tif/west_ridge_petersontif.html (accessed
November 7, 2012).
16
“An Analysis of Five Chicago TIF Districts,” Polsky & Associates Ltd., at
http://www.polskylaw.com/blog/?p=386 (accessed November 7, 2012).
 7

severely deteriorated.”17 Washington was not very enthusiastic about the TIF, being more
interested in redevelopment outside the central business district, but because of its momentum
among the downtown commercial elite, he accepted its inevitability. His administration convinced
the city council to approve a tax increment financing arrangement—the city’s first—to raise the
necessary funds, and in 1984 the project got underway. 18 As the Illinois Department of Commerce
and Community Affairs reported, “the city [planned] to spend $283 million on public
improvements and facilities in the district, including: purchase of a site for the relocation of the
bus station, construction of a below-grade service tunnel linking parts of the areas with Lower
Wacker Drive, adjustments to sewer and water lines, street improvements, pedestrian walkways
and sewer bank improvements and new or rehabilitated transit stations along the ‘Loop’ elevated
transit line.”19 As we’ll see, in 1997, under Daley, the TIF was expanded enormously—a move
that was of dubious legitimacy, in light of the fact that according to Illinois law TIFs can be
established only in areas exhibiting urban blight, which the Loop in the 1990s definitely was not.
Harold Washington died in 1987, just when many of his reforms were starting to become
institutionalized. It was a terrible blow to neighborhood and community movements, and to
progressive politics in general. 20 His successor, Eugene Sawyer, was not as charismatic or effective
as Washington, and his tenure lasted only until 1989, when Richard M. Daley was elected mayor.
At that time there were only eight TIF districts in Chicago, though this would soon change.

From early on, it was clear to political observers that Daley’s mayoralty would be quite
different from Washington’s. For one thing, he was the son of the Boss, the first Daley; many
feared he would resurrect the Machine of the 1960s and ’70s. More concretely, the sources of his
campaign funding indicated what kinds of policies he would enact if elected. While the incumbent
Eugene Sawyer got most of his money from individual donations of less than $1500, Daley
received many donations of more than $10,000, which ensured that he had far more resources than
Sawyer and his other opponents combined. Among Daley’s biggest supporters were the city’s top
developers, lawyers, traders, and financiers—the downtown business community, in short. For
instance, the law firms Bell, Boyd & Lloyd and Schiff & Hardin were quite generous to Daley,

17
Harold Washington administration, North Loop Tax Increment Redevelopment Area: Redevelopment
Plan and Project (January 1984), 2, 3.
18
Gregory Squires et al., Chicago, 169-175.
19
Illinois Department of Commerce and Community Affairs, Tax Increment Financing, 5.
20
See John T. Betancur and Douglas C. Gills, “Community Development in Chicago: From Harold
Washington to Richard M. Daley,” Annals of the American Academy of Political and Social Science, Vol.
594 (July, 2004): 92-108.
 8

and the construction industry was especially munificent.21 In the end, he managed to raise $7
million, vastly more than his competitors.22
Accordingly, after Daley’s election in April 1989, newspapers reported that “Chicago’s
business community is breathing a collective sigh of relief,” in fact that it “is beside itself with
joy.” The business leaders who had financed his campaign expected him to refocus development
efforts downtown, make financing easier for city projects, enact policies that would increase real
estate values, and in general foster a “cooperative relationship between city government and
business.”23 Corresponding to business’s optimism was the pessimism of constituencies that
favored community empowerment. Members of the city’s Economic Development Commission,
for example, worried that neighborhood development, which had been emphasized by
Washington, would wither. Their concerns proved to be well-founded.
Throughout his six terms, Daley’s priorities would be largely consistent with those of three
powerful business groups: the Commercial Club, the Civic Committee, and World Business
Chicago, which was formed in 1999. The latter two were outgrowths of the first, which was
founded over a century ago, in 1877. The Commercial Club currently consists of 350 active
members, who are all business and civic leaders in the metropolitan area. The most powerful law
firms are represented, as are consulting groups, financial institutions, medical centers, and
Chicago’s universities. Since the club’s founding there has been a striking continuity in the
interests it represents, as shown by its sponsorship of Daniel Burnham’s famous 1909 report The
Plan of Chicago, which laid out a very modern and post-industrial vision for the city. It prioritized
urban beautification, the development of highways, new parks, railroad terminal improvements,
civic and cultural centers, a more systematic arrangement of streets, and the gradual eviction of
industry from the central city by means of zoning regulations and an increase of property values.
This vision has been largely implemented from the 1920s to the present, the Commercial Club
providing assistance and guidance at every step of the way. In the 1980s, in the midst of the urban
crisis, it formed the Civic Committee—“a smaller group of member CEOs and senior executives
from Chicago’s leading businesses, professional firms and universities”—to help plan for the
region’s rejuvenation.24 The first product of this new effort was the 1984 study mentioned above
called Make No Little Plans, which set out a twenty-year (or more) agenda for economic

21
Dick Simpson, Rogues, Rebels, and Rubber Stamps: The Politics of the Chicago City Council from 1863
to the Present (Boulder, Colorado: Westview press, 2001), 280, 281.
22
Mark Brown, “Small donors a big part of mayor’s funding,” Chicago Sun-Times, February 16, 1989; Ray
Gibson, “Daley campaign raises $2 million,” Chicago Tribune, February 7, 1989; Thomas Hardy, “1
million to decide mayor race,” Chicago Tribune, April 4, 1989.
23
Cindy Richards, “City’s execs cheer Daley, look forward to stability,” Chicago Sun-Times, April 6, 1989.
24
“Purpose and History,” The Commercial Club of Chicago, at
http://www.commercialclubchicago.org/purpose/index.html (accessed October 31, 2012).
 9

development. After his election, Daley adhered to its services-oriented, post-manufacturing, anti-
labor vision much more closely than Harold Washington had.
Given the power of these organizations—including World Business Chicago, which I’ll
discuss below—as well as the interests they represent, it isn’t surprising that Daley essentially
adopted their agenda. For example, in Make No Little Plans, the Civic Committee and Commercial
Club had suggested that the city “renovate Navy Pier to house retail establishments and
recreational facilities.”25 Daley promptly set about doing so, obtaining within a few months of his
election $150 million from the state legislature to modernize the pier.26 Soon afterwards he helped
organize a $987 million expansion of the McCormick Place convention complex—another project
long favored by the downtown business community, especially developers—and he also
announced plans to build a third major airport in Chicago, which developers and other downtown
interests had long been advocating.27 (This project was never completed.) In addition, he pressed
vigorously for a $775 million trolley system downtown and a $2 billion casino and entertainment
complex, as well as engineering the construction of the $175 million United Center, a new
basketball and hockey stadium on the Near West Side.28 Whatever merit these projects had, the
point is that their chief advocates belonged to the downtown business elite.
It is true that in these early years, arguably more so than later, Daley was willing to
contravene the wishes of property developers. After all, he had the progressive legacy of Harold
Washington to deal with, the legacy of community mobilization. In particular, job creation had
come to be recognized as a priority, one not always consistent with the prioritizing of high property
values. Even developers often pitched their proposals on the politically popular basis of how many
jobs they would create. However, political task forces and projections by the city’s Departments
of Planning and Economic Development sometimes concluded that industrial land-use would
create more jobs than commercial land-use (and would contribute more to the Gross Regional
Product), which put pressure on the mayor to approve the former rather than the latter. This was
the case, for instance, with the Goose Island and Elston Corridor planned manufacturing districts,
which had been proposed in the late 1980s. Their advocates, including unions and neighborhood
groups, feared that Daley would cancel the projects, but he proved them wrong (due in large part
to pressure from his planning commissioner, David Mosena29). Initially hesitant, in 1990 Daley
announced that he was reversing his campaign position and would support the Goose Island and

25
The Commercial Club, Make No Little Plans: Jobs for Metropolitan Chicago (Chicago, 1984), 28.
26
R. Bruce Dold, “Navy Pier remains in uncharted waters,” Chicago Tribune, July 9, 1989.
27
Henry J. Hyde, “Daley’s proposed third airport: too little and too late,” Chicago Tribune, March 2, 1990.
28
John Kass, “Edgar trolley-funding switch angers Daley,” Chicago Tribune, September 22, 1994; Joel
Rast, Remaking Chicago, 136.
29
Rast, Remaking Chicago, 142.
 10

Elston Corridor PMDs. The real estate community and the editors of the Chicago Tribune were
appalled, but with Daley’s support the initiatives sailed through the city council. 30
In the coming years, as we’ll see, the Daley administration continued on occasion to flout
the wishes of its core constituency, the downtown commercial sector. This became more difficult,
however, as the West’s agenda of property development, urban beautification, tourism,
entertainment, gentrification in neighborhoods surrounding the downtown, and marketing of cities
for global business came to predominate. Much scholarship has demonstrated that Daley grew
enthusiastic, indeed passionate, about this kind of urban planning, that he came to see it as his
mission to make Chicago a beautiful, global city. As early as 1989, he told an audience, “The city
is changing. You’re not going to see factories back.... I think you have to look at the financial
markets—banking, service industry, the development of O’Hare Field, tourism, trade. This is
going to be an international city.”31 Daley and his administration came to the conclusion that in
order to reverse the city’s economic decline they would have to transform and expand the Loop
“through the support of high-density office development and retailing as well as the reintroduction
of a substantial downtown population [i.e., ‘gentrification’],” and through Chicago’s repositioning
as a global city. 32
In fact, Daley was not alone in his embrace of this new agenda. All over the U.S., mayors
in the 1980s and 1990s pursued economic revitalization by means not of progressive social policies
but of downtown gentrification, beautification, and remaking their cities as “tourist meccas.”33
Dennis Judd notes that “between 1976 and 1986, in the service of [this] new downtown
development strategy, 250 convention centers, sports arenas, community centers, and performing
arts facilities were constructed or started, at a cost of more than $10 billion, and over the next
decade, the competition continued unabated.”34 Costas Spirou, too, observes that “waterfront
districts, museum campuses, sport complexes, large outdoor festival venues and elaborate
entertainment locales have come to be significant forms of urban development,” because they can
draw large numbers of visitors and generate considerable profits.35 Spirou calls these trends the
“disneyfication” of urban space.

30
Rast, Remaking Chicago, 138-142; “Don’t Stop the Clock on Goose Island,” Chicago Tribune, June 18,
1990.
31
Quoted in Fassil Demissie, “Globalization and the Remaking of Chicago,” in The New Chicago, 22.
32
Ibid., 27.
33
Dennis Judd and Susan Fainstein, “Global Forces, Local Strategies, and Urban Tourism,” in The Tourist
City, eds. Judd and Fainstein (New Haven: Yale University Press, 1999), 12.
34
Dennis Judd, “Constructing the Tourist Bubble,” in The Tourist City, 36.
35
Costas Spirou, “The Evolution of the Tourism Precinct,” in City Spaces—Tourist Places: Urban Tourism
Precincts, eds. Bruce Hayllar, Tony Griffin, and Deborah Edwards (Burlington, MA: Elsevier Ltd., 2008),
22, 23.
 11

One of the keys to this urban agenda was tax increment financing. This is ironic,
considering TIF’s original purpose. Nevertheless, it is a fact that as the 1990s progressed, mayors
all over the country—none more so than Daley—began to use TIF in a decidedly “neoliberal” way,
i.e., as a means of raising property values around the central business district and transferring
wealth from the lower and middle classes to the upper.36 It took some time, however, for Daley to
enthusiastically embrace this new agenda for TIF. From 1987 to 1997, there was an average of
about four new TIF districts created each year in Chicago. In 1997 the city had a total of 41 TIFs.
From 1998 to 2002, it created 86 new TIFs, more than twice as many as during the previous
fourteen years and more than all of suburban Cook County during the same five-year period.37 The
number has continued to climb, so that in 2012 Chicago has 163 TIF districts, covering more than
30 percent of the city’s land area.38 As we’ll see below, the majority of all this TIF money has
gone to the wealthiest areas, in and around the central business district.
Since 1998, the city’s total revenue from TIF has increased dramatically, as is clear from
the following numbers:39
1987 $5.1 million
1990 $20.1 million
1996 $50.1 million
1998 $77.2 million
2000 $129.3 million
2002 $216.6 million
2005 $386.5 million
2007 $555.3 million
2010 $509.9 million
2011 $453.7 million

TIF revenue declined after the economic collapse of 2008, but this trend may be reversed as
property values rise again.
To understand how tax increment financing has evolved over the last twenty years, it will
be useful to consider some examples of TIF districts (commonly called “TIFs” for brevity). Many
of them have been quite small, designed purely for the benefit of one or two businesses. In 1993,

36
See Craig L. Johnson and Joyce Y. Man, eds., Tax Increment Financing and Economic Development:
Uses, Structures, and Impact (New York: State University of New York, 2001).
37
Mike Quigley, A Tale of Two Cities: Reinventing Tax Increment Financing, 2007, 1-2.
38
This figure of 30 percent is from 2008, so it is certainly higher by now. Adam Verwymeren, “Chicago,
TIF by TIF,” Medill Reports, June 5, 2008.
39
“City of Chicago TIF Revenue Totals by Year,” Cook County Clerk,
http://www.cookcountyclerk.com/tsd/tifs/Pages/TIFReports.aspx (accessed November 4, 2012).
 12

for instance, a district was created for Tru-Vue, an 80-employee company that had to expand its
location on Goose Island in order to relocate its New York operations to Chicago. Similarly,
Culinary Foods moved from West George Street to a TIF district in the Stockyards industrial park,
thus providing this neighborhood with a few more jobs. Nabisco benefited from a 105-acre district,
more than half of which included the company’s enormous bakery employing 2400 people.
Nabisco had suggested it might leave Chicago unless the city provided some funding for the
facility’s $500-million expansion and modernization, which Daley obligingly did.40
On the other hand, some TIFs created in the 1990s were very large—and very
controversial. In 1997 the city council, which rubber-stamped virtually every Daley proposal,
approved a major expansion of Harold Washington’s original North Loop TIF, so that it now
covered about a quarter of all buildings downtown and became known as the Central Loop TIF.41
Community groups, such as the Chicago Coalition for the Homeless, organized to prevent the
expansion from taking place, but to no avail. Speaking for them, the president of ACORN declared
at a rally in front of City Hall that “a [Central Loop] TIF is nothing more than another corporate
welfare business raising its ugly head again. We would much rather see the money spent in the
neighborhood than being spent with big corporations.”42 Even the Chicago Tribune criticized
Daley’s plans for the Central Loop TIF, saying that the mayor had been “maddeningly vague”
about how the projected $300 million would be spent.43 The Tribune also noted that nearly half of
this future “tax increment” consisted of money that, in the absence of the TIF, would have gone to
the Board of Education. “Now that the mayor is running the schools via appointees,” the Tribune’s
editors observed, “who’s going to howl if and when the expanded TIF district starts squandering
badly needed educational funds?”44 This criticism of TIF—that it diverts taxes from schools (and
the county, parks, libraries, etc.) to the real estate industry—was to become more and more
common in the next fifteen years.
Another controversial TIF district was the one in the South Loop, in the neighborhood
called Central Station (where Mayer Daley lived). The Chicago Coalition for the Homeless
protested the TIF’s passage in 1994, arguing that unless certain provisions were added to the
proposal, the result of development would be to displace low-income and minority residents from
the area. For instance, the coalition demanded that 20 percent of all new housing in the area be set
aside for low-income families, and that 50 percent of the jobs created by development be filled by

40
Nancy Ryan, “City on a roll with deals to save jobs,” Chicago Tribune, August 12, 1993.
41
David Roeder, “Taxes to rebuild loop,” Chicago Sun-Times, October 4, 1996
42
Paul David, “Community groups protest against city’s misuse of TIF in Loop area,” Chicago Weekend,
December 15, 1996.
43
In fact, from 1984 until its expiration in 2008, about a billion dollars was spent in TIF money in and
around the Central Loop. Ben Joravsky, “A TIF Under the Microscope,” Chicago Reader, July 15, 2010.
44
“Daley’s Loop TIF plan too vague,” Chicago Tribune, November 12, 1996.
 13

women, minorities, and the homeless. 45 These and other demands were not met, but aldermen did
tack on an amendment stipulating that at least 300 units of housing be provided for low- and
moderate-income residents.46 This, unfortunately, was not enough to save the neighborhood from
gentrification, as the fears of advocates for the homeless have largely come to pass.47
Neighborhood advocates had less cause to complain, however, with regard to the mayor’s
support for the city’s industrial corridors. We have already seen that Daley prevailed on the city
council to establish two planned manufacturing districts in 1990; since then, he had continued to
juggle support for industry with his deeper commitment to commercial and residential
development downtown and elsewhere. Among the TIFs he proposed in 1997, therefore, were six
that were designed to preserve historic industrial areas by either encouraging revitalization or—in
the districts that were close to the Loop, such as the Pilsen one—protecting them from an invasion
of commercial and residential property, which would drive up land values to the point that
manufacturers would be forced out. To this end, the Daley administration backed a zoning change,
for example, in the Kinzie industrial corridor, which would keep residential development to a
minimum. In addition, the administration promised to use the future TIF money for such industry-
friendly purposes as constructing new sewers, improving viaducts, funding job-training programs
for local employees, and modernizing buildings that were obsolete for modern manufacturing
needs.48 In subsequent years, most of these industrial TIFs proved to be fairly successful. 49
Nevertheless, despite such moves to accommodate the interests of industry, workers, and
even a few neighborhoods on the West and South sides of the city, it is undeniable that Daley’s
chief passion was to beautify, develop, and market Chicago for global business. The TIFs he was
establishing downtown were facilitating the construction of new office buildings, the recycling of
older buildings into condominiums, the creation of affluent new communities near the Loop, and
a glittering array of initiatives to beautify the gentrifying portions of the city. Daley seemed
particularly fond of wrought iron—“wrought-iron fencing erected by the mile,” as one newspaper
reported, “new bridges sporting wrought-iron trim and obelisks and sculptures, wrought-iron
lampposts with fanciful curlicues”50—but he also put up flowers all around the business district

45
Flynn McRoberts, “Protest right in Daley’s backyard,” Chicago Tribune, July 28, 1994.
46
Fran Spielman, “Council blocks bid to void police sergeant promotions,” Chicago Tribune, August 4,
1994.
47
Martha Baybe, “The booming South Loop has a tortuous and tawdry tale to tell,” Chicago Reader, March
13, 2008.
48
David Roeder, “6 new TIF districts proposed,” Chicago Sun-Times, October 3, 1997; Gary Washburn,
“City officials seeking TIF designation for 6 industrial areas,” Chicago Tribune, October 8, 1997.
49
Greg Hinz, “A tough TIF trip,” Crain’s Chicago Business, July 29, 2002.
50
Raad Cawthon, “Mayor’s beautification of city has plenty of critics and copycats,” Houston Chronicle,
December 26, 1999. Another article notes that, once, “when Daley got tired of looking at a wooden barrier
around an entire city block downtown, he had the wood ripped out and a wrought-iron fence put in, paying
 14

(hanging from lampposts and such), invested in rooftop gardens, planted hundreds of thousands of
trees, and encouraged “nightly illumination of as many downtown facades as possible, to create a
Midwestern ‘City of Light.’” Many millions of dollars in TIF funds were spent on this sort of
landscaping, for which Chicago was famous already by the late 1990s. The old gritty image of the
industrial, and then the deindustrializing, city was making way for the new image of a sparkling,
cosmopolitan, desirable place to live. The landscaping and beautifying rarely extended to lower-
income neighborhoods on the West and South sides of the city, but around the business district
Chicagoans could readily see their TIF money at work.
At the same time, such organizations as the Commercial Club, the Chamber of Commerce,
and the World Trade Center Chicago were doing their part to improve the city’s image in the eyes
of global businesses. Specifically, in 1998 they founded World Business Chicago, a group that,
according to its original managing partners, would be devoted to “telling Chicago’s story” to
international businesses in order to attract them to the area. In 2000 it merged with the Chicago
Partnership for Economic Development, created by Daley in 1999, which enlarged the
organization and gave it a more clearly defined corporate structure. The mayor was, and remains,
the chairman; the board of directors consists of some of Chicagoland’s leading corporate
executives.51 Major initiatives of the last twelve years, including the colossal “Millennium Park”
project, have borne this organization’s imprimatur.
The outlook and goals of World Business Chicago are those of the Commercial Club and
the Civic Committee. They have not changed much since the 1980s, although the business elite
has grown more savvy regarding public relations, so that, for example, none of the reports now
published by these commercial organizations explicitly states that workers’ compensation and
unemployment insurance should be reduced (as Make No Little Plans stated in 1984). The public
would probably not approve of such a frank admission. One can get a sense of the downtown
business elite’s current views by reading the Commercial Club’s publication Chicago Metropolis
2020: The Chicago Plan for the Twenty-First Century (2001). Modeled on Daniel Burnham’s 1909
Plan of Chicago, it lays out a comprehensive and ambitious vision for the region’s social and
economic future. The framework is what the author calls “regionalism,” an insistence on the
necessity of coordinating political and economic initiatives in the Chicagoland region, including
the Cook, DuPage, Lake, McHenry, Kane, and Will counties. More pertinent to this paper,
however, is the plan’s casual dismissing of manufacturing in favor of services, such as

the $158,000 bill from TIF money.” Ray Gibson and Rebecca Cohen, “King Richard’s buried treasure,”
Chicago Tribune, November 2, 1997.
51
Author’s correspondence with World Business Chicago; Mike Comerford, “Selling Chicago abroad,”
Daily Herald, February 17, 1998.
 15

entertainment, tourism, education, health services, financial services, and publishing. Tax
increment financing is declared “indispensable,” and the entire region is urged to make use of it.52
Not coincidentally, it was around the time of this report’s publication that the Daley
administration’s use of TIF really started to become obsessive. It is true that some of the new TIF
districts and programs faced little opposition from neighborhood groups. For example, to help
small businesses, the city initiated a program called the Small Business Investment Fund, whereby
businesses in a TIF district could apply for up to $50,000 of funding for capital improvements.53
This program still exists and is very popular. In addition, a number of TIF districts continued to be
created in underprivileged communities on the South and West Sides. To mention one or two at
random: nearly 400 jobs were expected to be created and retained by means of the city’s assistance
with building a high-quality daycare center on the West Side, expanding a barrel recycling
business, and expanding a North Side computer software development firm. 54 One could argue
that these are exactly the kinds of projects for which TIF was originally intended.
However, as one peruses newspaper articles and editorials and critical studies of TIF, one
realizes that the majority of TIF funding has, apparently, gone to politically connected businesses
that are not located in the most “blighted” parts of the city. Jacqueline Leavy, executive director
of the Neighborhood Capital Budget Group, said it well in 2000: she remarked that “the city has
negotiated too many subsidies to private developers without adequate public oversight or a reliable
accounting of the jobs supposedly created.”55 The Chicago Tribune, Chicago Sun-Times, and other
newspapers have scores of articles describing deals made with particular companies, subsidies
given to them ostensibly for the purpose of convincing them to stay in Chicago. But there is little
transparency or accountability with respect to TIF, so who is to say what really happened? When
Quaker Oats Co. got $9.75 million in TIF funding to convince it to keep its headquarters in the
city, who is to say what sort of negotiations went on between the company and the Daley
administration?56 Maybe Quaker would have stayed in the city anyway, and that $9.75 million
could have gone to such taxing bodies as schools and parks instead of to the company.
In the early 2000s, political observers were growing more concerned not only over the lack
of transparency or fairness of tax increment financing but also its fiscal costs. The nonprofit
Neighborhood Capital Budget Group published a report in which it studied 36 TIF districts and

52
Elmer Johnson, Chicago Metropolis 2020: The Chicago Plan for the Twenty-First Century (Chicago:
University of Chicago Press, 2001), 104-106.
53
David Roeder, “New TIF targets small businesses,” Chicago Sun-Times, July 12, 2000.
54
Anonymous, “Mayor Daley introduces ordinances to City Council to create and retain jobs,” Chicago
Defender, November 27, 1999.
55
David Roeder and Fran Spielman, “9.75 million keeps Quaker in Chicago,” Chicago Sun-Times, March
2, 2000.
56
Ibid.
 16

found that in all of them, property values had already been growing prior to TIF designation. In
other words, subsequent development was not solely or even primarily a result of the TIF, which
meant that government bodies were being unfairly deprived of tax revenue from growth in property
values. In fact, the NCBG calculated that over the lifetime of these 36 districts, the taxing bodies
would lose $1.3 billion in revenues they would have collected had the areas not been designated
as TIFs. The Chicago Public Schools, for example, was losing a total of $631.7 million from these
36 districts, and the City of Chicago $254.8 million. These numbers alone go a long way towards
explaining the dire fiscal straits in which Chicago finds itself in 2012.57
It is not hard to find examples of the profligacy of the Daley administration. Millennium
Park ended up costing about $500 million, $280 million of which were provided by the Central
Loop TIF.58 (Would any sane person argue that Millennium Park was built in order to counteract
downtown blight?) In 2008, the city committed $75 million to Rush University Medical Center—
a private hospital—an allocation that Cook County Commissioner Mike Quigley criticized as not
“the proper use of TIF money.”59 On a smaller scale, the Chicago Symphony Orchestra has
received $2.5 million. 60 The privately owned Willis Tower downtown was awarded at least $28
million for remodeling.61 In 2005, $4 million went to Jewel Food Stores Inc. to build a store on
the Near West Side, not a low-income area.62 In fact, between 2000 and 2011, nearly half of TIF
money designated for private sector projects went to some of the area’s most profitable
corporations, including CareerBuilder, UPS, Target, and Quaker Oats.63 Amisha Patel, executive
director of the Chicago-based Grassroots Collaborative, aptly summarized the inequitable history
of TIF in the 2000s: “Of the $2.45 billion in TIF dollars spent from 2004 through 2008,” she said,
“the Loop, Near North, Near South, and Near West communities received $1.56 billion, or 63%.”64
The incredibly lucrative Central Loop TIF expired in 2008, but in 2006 the city had
designated another TIF downtown that would prove to be almost as lucrative: the controversial
LaSalle TIF around Chicago’s financial district. As usual, the legal restriction of TIF to blighted
neighborhoods did not pose a problem: city officials simply argued that some of the buildings in
the area were “old” and “deteriorating,” and that new infrastructure was needed. 65 This was

57
Neighborhood Capital Budget Group, Who Pays for the Only Game in Town? (Chicago: Neighborhood
Capital Budget Group, 2000).
58
Ben Joravsky, “A TIF Under the Microscope,” Chicago Reader, July 15, 2010.
59
Dave Newbart, “$75 million windfall for Rush?,” Chicago Sun-Times, January 8, 2008.
60
Ellyn Fortino and Margaret Smith, “Corporate Giants Received TIF Money, Records Show,” New York
Times, February 26, 2011.
61
Anonymous, “It’s our money,” Chicago Tribune, November 9, 2009.
62
Tribune staff, “City to consider TIF for grocer,” Chicago Tribune, March 8, 2005.
63
Fortino and Smith, “Corporate Giants Received TIF Money, Records Show,” New York Times.
64
Jennifer Nunez, “TIF money is people’s money, says Grassroots,” Gazette Chicago, November 3, 2011.
65
Yvette Shields, “Chicago Considering TIF for Financial District,” The Bond Buyer, July 13, 2006.
 17

apparently sufficient to cover the legal requirements for TIF designation. The Daley administration
estimated that over its lifetime the TIF would capture at least $550 million in tax revenue, to be
used for “high-quality retail development, improvements to the Chicago River seawall, new and
improved open spaces, enhanced transit stations and public right-of-ways, and improvements to
streets and alleys. Funds are also targeted for land assembly projects, public works improvements,
job training, day care, and efforts that improve traffic and pedestrian circulation throughout the
49-block district and its environs.”66 These sound like worthy projects, but the fact is that in 2006
property values were already growing—tremendously—in the Loop, and TIF designation entailed
that taxing bodies would collect less revenue from this property growth. Fed up with the city’s
shenanigans, Mike Quigley proposed in 2006 that the state study how TIFs were applied and
whether the law was working as intended. His proposal, however, was rejected by the Cook County
Finance Committee—which was chaired by John Daley, Richard Daley’s brother.67
Even Crain’s Chicago Business, no opponent of financial help to the business district,
criticized the LaSalle TIF. Among other things, its editors observed that “roping off downtown tax
revenues for 23 years would put hundreds of millions of dollars off-limits to county government
for most purposes,” at a time when the county was already experiencing a fiscal crisis. They were
also concerned that Daley would have no accountability on how he spent the money. 68
In part because of the LaSalle TIF, calls for TIF reform grew more frequent after 2006.
Liberal journalists such as the Reader’s Ben Joravsky started popularizing the idea that tax
increment financing was just a “slush fund” for the mayor; Cook County Commissioner Mike
Quigley published a long primer on how TIF was being abused by the mayor and how it could be
reformed; even aldermen, who hitherto had rubber-stamped every Daley TIF proposal, began to
have second thoughts because the administration was routinely moving funds from ward to ward.69
Some aldermen made proposals for reform, which went nowhere.70 In 2006 the Cook County
Clerk, David Orr, started publishing a four-part annual report on TIF, an online TIF primer to help
the public understand what was at stake, and online TIF district maps. In 2007, for example, he
observed that since 1986 Chicago’s taxpayers had paid more than $3 billion in TIF money. 71 (Four
years later, that number had risen to $4.6 billion.)72 In 2009 he called for a “moratorium of new

66
Ibid.; “LaSalle/Central TIF,” City of Chicago, Housing and Economic Development, at [etc.] (accessed
November 8, 2012).
67
Steve Stanek, “LaSalle Street TIF Proposal Has Chicago Politician Calling for Moratorium,”
Heartlander.org, December 1, 2006, at [etc.] (accessed November 8, 2012).
68
“LaSalle Street TIF proposal needs more work,” Crain’s Chicago Business, July 17, 2006.
69
“Another form of TIF abuse,” Chicago Tribune, April 30, 2007.
70
See, e.g., anonymous, “Time for TIF sunshine,” Chicago Tribune, April 21, 2009.
71
David Orr, “2007 TIF report shows 11.5% jump in revenue,” at [etc.] (accessed November 10, 2012).
72
David Orr, “2010 TIF revenue down 4% countywide,” at [etc.]
 18

Chicago tax increment financing districts until new leadership is installed and a thorough review
of existing TIFs can be conducted.”73 Needless to say, a moratorium did not happen.
Meanwhile, as taxpayers and the city were paying hundreds of millions of dollars to
beautify the downtown area and its environs, hundreds of thousands of African-Americans were
languishing on the city’s South and West sides. The historian Paul Street observes that, as of 2005,
a fourth of the Chicago metropolitan area’s black households were officially poor, compared to
5.6 percent for white and 16 percent for Latin households. More than a third of black children lived
in poverty. (Lately that has increased to more than a half.)74 According to the 2000 census, black
median household income was 58 percent of white median income. Economic development was
so lacking in some neighborhoods that one of them, Auburn Gresham on the South Side (a
neighborhood that is 98 percent black), celebrated the opening of its first sit-down restaurant in
2004. It took “seven years, some arm-twisting, and a complex financial arrangement that included
$55,000 in contributions from parishioners” for this restaurant to be built.75 When one recalls that
tax increment financing was intended precisely to remedy economic decay in neighborhoods like
those on the South Side, facts like these are a terrible indictment of Chicago politics, indeed of
contemporary American politics in general.
In fact, not only did the poorest neighborhoods in Chicago fail to develop under Daley;
some of them actually de-developed. A 2006 study found that the poorest sections of the city lost
nearly 600 businesses and more than 14,000 jobs between 1995 and 2004. 76 As Jesse Jackson said,
“Right now, you go northwest, there’s, like, three jobs for every one person. If you go south,
there’re six people for every one job. Here, taxes are up. Services are down. He [Daley] has not
addressed structural inequalities.”77 More accurately, he has addressed them—by aggravating
them. With the help of tax increment financing, Daley has presided over an era of unprecedented
gentrification. 78
Mindful of this, politicians, journalists, and academics continued to make proposals for
TIF reform in the last few years of Daley’s mayoralty; it wasn’t until Rahm Emanuel was elected
mayor in 2011, though, that something was done about them. Several months after his election he
announced the creation of a task force to review the TIF system and recommend changes. In
August, 2011 it published its report, which essentially confirmed the claims of long-time critics:

73
Press release, Office of the Cook County Clerk, “Orr calls for moratorium on new Chicago TIFs,” at
[etc.] (accessed November 10, 2012.)
74
Steve Bogira, “Chicago’s growing racial gap in child poverty,” Chicago Reader, October 4, 2012.
75
Paul Street, Racial Oppression in the Global Metropolis: A Living Black Chicago History, 197, 202.
76
David Bernstein, “Daley vs. Daley,” in Twenty-First Century Chicago, eds. Dick Simpson and Constance
A. Mixon (San Diego: Cognella, 2012), 105.
77
Ibid.
78
“Income Segregation in Chicago and the Gentrification of America,” Chicago Magazine, August 2, 2012.
 19

the task force proposed ways for the city to increase its accountability, monitor its performance
with regard to TIF goals, and increase transparency. For example, it recommended that “every five
years TIF districts should be subject to strategic reviews which lead to continuation of the district,
revision of the district strategy or more significant change.”79 Mike Quigley, David Orr, and other
critics of Chicago’s TIF program praised Emanuel’s moves toward reform; on the other hand,
Quigley noted that “nothing in the Emanuel report would change the way TIF districts operate.”80
The tax increment financing program would continue to be basically a slush fund at the mayor’s
disposal; the main difference is that, if the task force’s recommendations were implemented, the
mayor would be a little more accountable than before.
In fact, after Emanuel announced the implementation of some of the proposed reforms in
January, 2012, it appeared that not much of real substance had changed. It’s true that a
comprehensive online TIF database would become available to the public and that monitoring of
TIF performance would be moved to the Department of Revenue, which would hire independent
auditors to perform random audits. None of this, however, has prevented taxpayers’ money from
continuing to go to some of the wealthiest people and corporations in the world, when Chicago
Public Schools is facing a deficit of at least $700 million in 2013 and the city will have a deficit
of $300 million. 81 For instance, $5.2 million are being diverted to the redevelopment of Harper
Court in Hyde Park, whose main beneficiaries are the University of Chicago and Hyatt Hotels.
That money could have gone instead to neighborhood schools and other public services. This is a
particularly egregious case because Chicago’s Pritzker family owns and controls Hyatt
Corporation, and Penny Pritzker serves on the boards of both Hyatt and CPS. So, as she proposes
a CPS budget that slashes $3.4 million from schools in the same TIF district that Harper Court is
in, she personally benefits from a TIF grant of $5.2 million.82 This is surely a conflict of interest,
of the sort that TIF reform has evidently done nothing to prevent. The Chicago Teachers Union
publicized this conflict of interest and abuse of TIF during its strike in September, 2012—marching
teachers held up signs with messages such as, “Silly Rich Guy, TIFs Are for Kids”—but to little
avail, as the Hyatt TIF has not been canceled. 83
It is a serious question, however, whether things can continue as they are for much longer.
As we have seen, the momentum behind TIF reform finally succeeded in accomplishing some of
its goals in 2011 and 2012; it is unlikely that the movement for greater equity and democracy in

79
“Tax Increment Financing Task Force Final Report,” City of Chicago, August 29, 2011.
80
“Daley versus Emanuel over TIF,” Chicago Examiner, August 30, 2011.
81
Noreen Ahmed-Ullah and Joel Hood, CPS budget for 2013 has huge shortfall,” Chicago Tribune, March
28, 2012; “Chicago mayor’s budget aims to shrink deficit,” Reuters, October 20, 2012.
82
David Orlikoff, “How Hyatt profits from 53rd St. TIF,” Hyde Park Herald, August 22, 2012.
83
Brandon Campbell, “Day 4 of CTU Strike Targets Pritzker, Use of TIF Funds,” Progress Illinois,
September 14, 2012.
 20

tax increment financing will simply dissolve away, so soon after it has tasted partial success.
California abolished TIF in February, 2012, thus giving the $6 billion a year that TIF was
consuming back to the state, to be spent on schools, roads, public transit, debt-servicing, and other
vital needs.84 Colorado might soon follow California’s example. 85 The Iowa legislature is
considering changes to the state’s TIF laws. 86 A nation-wide movement seems to be slowly
developing for TIF reform, as states, counties, municipalities, and school districts sink under the
burden of intolerable debt. More and more people are coming to realize that money locked away
in “redevelopment” programs would be better spent on necessities such as education. One can only
hope that these people will be able to convince the public of the wisdom of reform.

84
Nanette Miranda, “California redevelopment funding coming to an end,” ABC News, at [etc.]
85
“As California’s TIF goes, so might Colorado’s,” Denver Business Journal, January 13, 2012.
86
Rod Boshart, “Working group hopeful of TIF reform,” The Gazette, March 27, 2012.