While the Madison/Austin Tax Increment Financing (TIF) fund has generated over $3 million in property taxes, West Side residents have had little to no say as to how these taxes dollars are spent.
Few community residents are even aware what a TIF is or that a tax-generating vehicle aimed at economic development exists in their community. The fund was started in 1999 as a way to spur economic development in an area neglected by private investors. The fund is created by accumulation over a period of time, siphoning a portion of commercial and some residential property taxes into it. The city can then use the fund to attract new development and assist existing businesses in making construction improvements to their business sites with a portion of the fund, called the Small Business Improvement Fund (SBIF).
How the fund is regulated, and why certain projects are funded, however, is vague and not necessarily consistent, critics say.
The Madison/Austin TIF has assisted in the construction the DePriest Elementary School, at 139 S. Parkside; the Mount Vernon Manor senior apartment building, at 30 N. Waller St.; a Grandma Sally restaurant, slated to open this fall at 5223 W. Madison; and streetscaping along Madison Avenue from Pulaski Avenue to Keeler Street.
One community watchdog group believes the money is being mismanaged, that the public is uninformed about the usage and shifting of these tax dollars, and that too much of the fund is going toward school construction and streetscaping instead of its intended purpose-to attract business development.
“When it comes to commercial attraction plans, these plans are sitting on the shelf while schools are being fast-tracked. That wasn’t the initial promise,” said John Paul Jones, director of Community Outreach for the Neighborhood Capital Budget Group, a watchdog organization that monitors public spending.
“The city is reneging on its promise to the West Side to stimulate economic development,” Jones said.
The bulk of the fund has been used to build DePriest Elementary School, which is part of Mayor Daley’s new schools plan. DePriest received $1.2 million of the Madison/Austin TIF funds, compared to about $750,000 that has been allocated for the small business SBIF fund, which assist companies in improving their sites with various construction projects. About $1.3 million has gone toward public works projects, such as streetscaping and general infrastructure rehabbing.
Officials with the City of Chicago’s Department of Planning and Development, the department that oversees the administration of the fund, contends that building better schools is part of building a better community.
“I don’t believe that it’s unreasonable to assist with the development of a school that’s going to help with the future of a community,” said Connie Buscemi, spokesperson for the Department of Planning and Development.
And while few can argue that schools aren’t good for the community, it appears clear to critics that the city has dragged its feet in informing the general community about the funds and the usage of the money. Buscemi, though, said that decisions in how the funds are used are made at City Hall council meetings. She added that developers work at informing community residents about their upcoming projects, and that annual reports are distributed as a means to inform the public about fund activity.
Ald. Ed Smith (28th) said there were several meetings at the inception of the TIF fund to inform residents about its existence. However, he was unsure whether subsequent meetings have been held to let residents know how the funds are being spent.
Jones said the TIF was initially established for economic development projects, such as the clearing of land for commercial development, assisting small businesses in making improvements to their sites, attracting developers, and matching private investors with the type of businesses the public wants to see in their community.
Jones adds that West Side community organizers are being swayed from the big picture of attracting long-term economic development for the area, and that they’re being shortsighted by streetscaping and new schools. The Garfield Park Chamber of Commerce, which acts as one of the community conduits between the city and some West Side businesses, argued that it’s not being swayed from the big picture. The chamber is currently on the frontline of streetscaping on Madison to improve the area around the Garfield Park Conservatory. Chamber President Ernestine King said local businesses have asked for beautification in the form of streetscaping, and that she’s doing her best to assist with that project.
“In no way did we get thrown off course because we’re focused on streetscaping,” King insisted.
Some organizers believe when funds are shifted from business development, fewer dollars are available to the local business vendors.
“When they shift dollars without the community’s knowledge, they also downsize the amount of funds available to leverage private development deals,” said Jones. “Furthermore, they deny local merchants the opportunity to tap this fund to expand or improve their properties, monies which are theirs in the first place.”
