Council racing clock to authorize transit TIF
Without a day to spare, the City Council will hold a special meeting Wednesday to authorize a transit tax- incrementfinancing district in hopes of nailing down $ 1.1 billion in federal grants to modernize the CTA’s Red Line before President Barack Obama leaves office.
Planning and Development Commissioner David Reifman has described the timing as “threading a needle.”
Wednesday is literally the deadline for Chicago to demonstrate its commitment to provide the $ 622 million in local matching funds needed to access that so- called “core capacity grant.”
The remaining $ 428 million in matching funds will come from the CTA.
“Under the TIF statute, we cannot take this to City Council earlier than Nov. 30. Under the timeline the feds have given us for this grant, we can’t get them this later than Nov. 30. So, we are literally threading the needle to make the Nov. 30 date,” Reifman told reporters this month.
“The agreements and the ordinances — our part of the match — has to be fully in effect, then has to go to Congress for 30 days before it can be approved and closed under that grant agreement.”
The mayor’s intention was always to try and seal the deal before the Jan. 20 inauguration of a new president because of normal slowdown that takes place whenever there is a changing of the guard inWashington.
But City Council approval of the transit TIF legislation took on a bit more urgency after Donald Trump defeated Democrat Hillary Clinton, the mayor’s candidate for president.
Under a normal TIF, property taxes are frozen at existing levels for 23 years. During that time, the “increment” or growth in property taxes are held in a special fund and used for specific purposes that include infrastructure, public improvements and developer subsidies.
The transit TIF would remain in place for 35 years.
The financially strapped Chicago Public Schools would get its 50 percent share of the growth off the top. The transit TIF would get 80 percent of the rest. The remaining 20 percent would be shared by the city and other taxing bodies.
In the race to nail down the $ 1.1 billion to complete the $ 2.1 billion Red- Purple Modernization project, top mayoral aides and CTA officials have held a series of public hearings and aldermanic briefings on the transit TIF. The taxing district has actually shrunk since the original plan. It would now run for roughly six miles — from North Avenue to Devon — and include one- half mile on either side.
To make way for the Belmont Flyover, 23 parcels would be seized; the Flyover is an elevated structure intended to clear up a bottleneck where the Brown Line separates from the Red and Purple lines; that will allow the CTA to run up to 15 additional trains per hour on the Red, Purple and Brown lines.
Lincoln Park residents already hit with rising property taxes and increased assessments have warned that the transit improvements could send their property taxes through the roof.
Those fears could be fueled by the debt service table released by the city.
It shows the transit TIF generating $ 803,251 next year, $ 8.4 million in 2018 and $ 26.9 million in 2021. The revenue would rise to $ 46.3 million in 2024, $ 67.1 million by 2027 and $ 113.5 million by 2033. By 2033, the total take would be $ 851 million.
“You have some very steep increments — up to 800 percent between 2015 and 2018… What are you using to kind of establish how this will increment?” Ald. John Arena ( 45th) asked at the second of two “subject matter” hearings before the Council’s Finance Committee on Monday.
Reifman replied: “Those larger shifts represent triennial reassessments. That’s what accounts for those big jumps in three- year increments. … It’s simply a projection but it’s based on historical jumps.”
Budget Director Alex Holt has argued the tax rate used to determine the property tax bill would actually decline over the life of the transit TIF as the 144 other TIFs across the city expire.
Lincoln Park Ald. Michele Smith ( 43rd) was not appeased. She’s “very wary of the open- ended nature” of the transit TIF.
“It’s creating a precedent for how things get funded that shouldn’t be funded through TIF,” Smith said.