With chances for Amazon fading, Rahm sets sights on developments
Emanuel pushes $1.7 billion in subsidies to unlock potential of 4 sites
Mayor Rahm Emanuel was planning to fast-track $1.7 billion in subsidies to unlock the development potential of four massive projects in and around downtown even before Chicago appeared to have lost the competition for Amazon’s second North American headquarters.
But now that Amazon appears to have made a split decision to divide its 50,000-employee second headquarters between Virginia and New York, the mayor’s push to use tax-increment financing (TIF) to bankroll infrastructure improvements at the four sites takes on an even greater sense of urgency.
Not surprisingly, all four sites piqued Amazon’s interest.
They include a Chicago River district where Tribune Media wants to build 15 office and residential towers; “The 78,” a 62-acre site at Roosevelt and Clark once owned by convicted felon Tony Rezko, where Gov. Bruce Rauner dreams of building an innovation center led by the University of Illinois; the Lincoln Yards site, which includes the old Finkl Steel plant among 100 acres along the river, and the Burnham Lakefront, an area that includes the old Michael Reese Hospital site.
“These are not developer giveaways. These are huge parcels that will create jobs, opportunity, affordable housing. None of them will create any value if we can’t solve the infrastructure problems,” Planning and Development Commissioner David Reifman said Tuesday without mentioning the Amazon sweepstakes.
“We’re talking about opening up private development in excess of $10 billion or $15 billion that doesn’t exist today and would not occur without that assistance. We don’t have other sources to do it.”
Reifman noted that all of the TIF subsidies will be structured in a way that insulates Chicago taxpayers from risk.
Instead of fronting developers the money and being reimbursed when property taxes generated by new development start rolling in, developers will be asked to bankroll infrastructure improvements and be repaid after the fact.
The largest subsidy — up to $800 million — will be earmarked for Sterling Bay’s Lincoln Yards project. That will require the city to create a new TIF with a public hearing scheduled for Nov. 14.
“We have several new potential crossings at the river — at Armitage and Dominick — a potential relocation of the Clybourn Metra station. It’s very constrained and has no access and no parking. And . . . realignment and reconfiguration of the Elston-Armitage intersection along the lines of what was done at Damen and Elston,” Reifman said.
The South Loop site known as “the 78” needs $500 million worth of infrastructure improvements and will also require a new TIF with a public hearing on that plan scheduled for Nov. 15.
Key improvements include a new CTA Red Line station, realignment of Metra tracks that run through the site and “hold it back by isolating Clark Street,” construction of a new bridge at Taylor Street to open a “different path across the river,” improvements to 15th and Clark and completion of the Wells-Wentworth connector.
The old Michael Reese hospital site acquired by former Mayor Richard M. Daley for an Olympic Village that was never built needs up to $200 million worth of improvements that will require “some adjustments to the existing Bronzeville TIF,” the commissioner said.
The potential laundry list includes street connections, traffic and pedestrian bridges across Metra tracks and Lake Shore Drive, and the possibility of relocating the Metra station south to 31st Street, Reifman said.
The River District that got zoning approval last week needs roughly $150 million worth of improvements that will also require a new TIF. Most of that money would bankroll a new transit-way that could run all the way to the downtown commuter rail stations.
To avoid resurrecting the argument that Emanuel’s development efforts are downtown-centric, Reifman mentioned the NorthPoint project at 120th and Avenue O on the Southeast Side, which needs roughly $54 million worth of site improvements and the stubbornly vacant USX site.
Ald. Brian Hopkins (2nd), whose ward includes Lincoln Yards, said he’s all for the massive taxpayers subsidy.
“We need at least another bridge over the Chicago River, possibly two. We need road and highway improvements, traffic signal modernization, a complete reconstruction of the existing intersection at Ashland and Armitage. All of these things have been on the wish list for some time,” Hopkins said.
“Without Amazon, someone else will be coming along.”
At a time when mayoral candidates are vowing to rein in TIFs, Ald. Scott Waguespack (32nd) argued that Emanuel shouldn’t be able to send a “going-away gift” to developers that will tie the new mayor’s hands.
“Taxpayers are footing a larger and larger bill every year because of the number of TIFs he’s created,” Waguespack said.