THE ENTERPRIZE ZONE
Chicago’s tax-increment financing program is designed to eradicate blight, create jobs and promote economic development in neighborhoods that need it most.
But TIFs-which diverts property tax dollars to private developers in an effort to spur growth-appears to be doing little to help Austin residents.
Of the 184 private-sector TIF projects authorized in Chicago since 2000, just four were for Austin, one of the city’s more economically distressed neighborhoods and its most-populated community area.
According to ChicagoTalks.org, more than half of the nearly 200 private-sector TIF projects approved citywide between Jan. 1, 2000, and July 30, 2010, are clustered in or near the Loop. Few if any projects can be found in many of Chicago’s most blighted communities on the west and south sides. And many of those projects haven’t been completed, if started at all.
That’s true in Austin, where only one of the four projects approved over the last decade has met the legal terms in agreements signed with city development officials. A four-month investigation by AustinTalks has found that that one project has created few jobs for Austin residents.
The project-a Coca-Cola distribution facility at 1401 N. Cicero in the 37th Ward- employed just 28 people who live in or near Austin. That’s 10 percent of the 244 total people employed in 2009, according to documents the company submitted to the Chicago Housing and Economic Development Department, which oversees the TIF program.
The documents included those 244 worker’s names and zip codes. Twenty-five jobs came from three zip codes – 60639, 60651 and 60707 – that include Austin, as well as other Chicago neighborhoods and Elmwood Park. Three jobs came from 60644, located solely in Austin. The most current job-monitoring documents obtained from the city are for 2010 and do not include zip codes, so it’s impossible to determine how many workers now come from the Austin area.
Coca-Cola declined to provide this information to AustinTalks.
The developer is not required to provide employee zip codes, said Molly Sullivan, director of community outreach and communications for the city’s housing and economic development agency.
According to the 2009 documents-obtained by AustinTalks through a Freedom of Information Act request- about 103 jobs came from other Chicago neighborhoods, including Albany Park, Belmont Cragin, North and South Lawndale, and Roseland.
Under the terms of the agreement the developer signed with the city in 2006, the remaining jobs were transferred from other Coca-Cola facilities in the surrounding suburbs and states, the farthest being Saint Paul, Minn., and Salem, Wis.
Some TIF critics and West Side residents wonder whether Chicago’s TIF program, which began in the 1980s, has worked for Austin.
“A neighborhood that truly needs investment is not getting it,” said David Merriman, an economics professor and associate director of the University of Illinois’ Institute of Government & Public Affairs.
According to Merriman, there has been little private development in Austin over the last 10 years. He calls it, “terribly surprising, because the economy is in bad shape and private investment is down. At the same time, the lack of Austin TIF projects is distressing.”
Austin resident Dwayne Truss, who’s also a member of the South Austin Coalition Community Council, said the Coca-Cola project is a prime example of how low-income neighborhoods in TIF districts don’t get what they deserve. Property tax dollars, Truss added, are wrongly diverted from city services, such as fire and police protection, schools and parks, for the benefit of big corporations. He calls it “legalized corruption.”
“The TIF program is a failure for poor communities and a bonanza for big businesses,” Truss said. “Economic development hasn’t yielded any significant jobs – at least on the West Side.”
Instead of paying companies to relocate their corporate headquarters and otherwise subsidize big businesses, Truss maintained that TIF money should be used for job training in areas with high unemployment rates – areas like Austin.
Austin’s unemployment rate hit nearly 21 percent – the seventh-highest in the nation compared to other similar geographic regions – according to a Chicago Reporter analysis of 2008 U.S. Census data. Austin’s unemployment is still much higher than the city’s 8.7 rate recorded earlier this spring, as well as the Downtown area, which has had many more TIF projects than Austin, according a four-month investigation by ChicagoTalks.
Of the $1.2 billion in TIF subsidies promised for projects citywide since 2000, about $22 million was allocated for Austin. But as of late June, only $1.4 million has been paid out, most of it for the Coca-Cola distribution center.