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Mayor Rahm wants to turn Lathrop Homes into his next TIF slush fund

The city's calling it the Diversey/Chicago River TIF district, but it might as well be called Mayor Rahm's piggy bank.

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Lathrop Homes was once considered a model public housing complex. - JASON REBLANDO
  • Jason Reblando
  • Lathrop Homes was once considered a model public housing complex.

For the last few months, I've been watching the twists and turns of the ongoing Lathrop Homes saga, waiting for the TIF shoe to drop.

And last week it fell, with a resounding thud.

Actually, it was more like a muffled shuffle. In typical city fashion—perhaps hoping no one was paying attention—Mayor Emanuel quietly moved to create a new tax increment financing district for Lathrop Homes.

If existing TIF districts are any indication, this new one, located on some of the most valuable riverfront property in the city, would undoubtedly collect tens of millions of dollars in what would have been tax revenue to subsidize—well, the mayor hasn't told us where the money's going to go.

This being a TIF, the mayor generally lets us know how he's spending the money only after he's already spent it.

On April 5, the city will hold a public hearing to discuss the proposed TIF. I'll get to that—and what we need to look out for at that meeting. But first, here's a brief explainer about Lathrop—and about why this new TIF district is particularly galling.

Built in 1938 by the federal government, Lathrop Homes is a low-density public housing complex of 925 apartment units sitting on about 35 acres of prized north-side real estate, along Clybourn near Diversey, just east of the Chicago River.

For years, Lathrop was regarded as one of the Chicago Housing Authority's more successful developments. It's also listed on the National Register of Historic Places. But by the 1990s, Lathrop had fallen into disrepair thanks to underfunding and weak management from CHA and the feds.

By 2000 the CHA had stopped filling vacant apartments; currently only about 140 units are inhabited.

In 2011, the CHA authorized a development group called Lathrop Community Partners to redevelop the property as a mixed-use facility, with a blend of low-income and market-rate rental housing. (Partners is a collaboration of Related Midwest, a for-profit developer, and two nonprofit developers, Bickerdike Redevelopment and Heartland Housing.)

In February, the developers unveiled the latest version of their Lathrop plan, which calls for about 1,200 housing units, of which roughly 400 will be public, 222 affordable, and the rest market rate.

They also plan to build 50,000 square feet of retail and a revamped river walk, including a kayak dock.

After the plan was announced, Lathrop Homes residents and low-income housing activists pointed out that the plan cuts about 500 public housing units from the city's total stock at a time when there's a citywide waiting list of reportedly more than 125,000 people for such units.

First Ward alderman Proco Joe Moreno, the plan's chief backer, pressured Eugene Jones Jr., CEO of the CHA, to provide a letter committing to replace the 500 units lost at Lathrop with other affordable units somewhere else in Chicago.

But the activists don't trust the CHA to make good on that promise, and say they won't sign on to any deal until the agency provides specific, legally binding plans, with funding, to replace the housing.

Despite these objections, the city's Plan Commission approved the project in February, and the City Council's zoning committee OK'd it March 14.

It was only after these meetings that the city acknowledged the project would include a new TIF district.

On March 18, planning commissioner David Reifman sent a letter to residents saying, "Good news, you're about to get fucked. . ."

Oh, wait. I guess that's how I'd phrase the letter if Mayor Emanuel put me in charge of planning.

Instead, Reifman wrote of "a proposed designation or amendment of a Tax Increment Financing district in which your property or residence is located."

As you may know from my many previous columns, when the city creates a TIF district, it essentially freezes the amount of tax dollars that the city—and its schools and other taxing bodies—get from property in that district, for up to 24 years.

Instead, the extra property tax money that's generated in the new TIF district goes to a TIF fund, which the mayor's free to spend as he wants. (Sometimes some of that money is spent on redevelopment projects in the TIF district, sometimes not.)

But here's the thing: Because Lathrop Homes is currently owned by the CHA, the land in the proposed TIF district is currently tax exempt. That means it pays no property taxes.

That will change once the property is controlled by the developers. The land will stop being tax exempt, and they'll start paying property taxes.

Without a TIF district, that money would go to the city, and the schools. But if the city creates a TIF district, all the taxes the developers pay—every nickel and dime—will go to the newly created TIF fund.

The schools would get nothing. Hear that, teachers and parents fighting for scraps? Your schools get nothing!

The city's calling it the Diversey/Chicago River TIF district, but they might as well call it Mayor Rahm's piggy bank.

Now we're getting to the big question: How much slush money would the new TIF gather over the next 24 years? The city hasn't said. When I called Alderman Moreno, he said he didn't even know—because the city hadn't told him either.

Hey, Proco Joe—when are you going to stop trusting these guys?

One thing Moreno and I agree on: as I mentioned, the TIF could gather tens of millions of property tax dollars over the next two decades, because it's prime land right on the riverfront.

That brings us to that April 5 meeting, which takes place at 6 PM at the New Life Community Church, 2958 N. Damen.

If this meeting goes like most of these informational hearings, you'll hear a whole lot of gobbledygook about TIFs—some of which may even be true.

But here's the A, B, and C that you need to know about this TIF:

A is how much the TIF will gather in property taxes over the course of the next 24 years.

B is how much of that money the city plans to spend on the Lathrop project.

And C is A minus B—or, the leftover slush for the mayor.

I wouldn't sign on to this deal until the mayor guarantees to disband the TIF district as soon as he's used it to pay off whatever project he swears he needs to fund with the money.

My guess is the administration—slicksters that they are—will try to woo us with talk of a near north side river walk while telling us that that they can't build low-income housing on the site without a TIF handout.

'Cause, you know, it wouldn't be a TIF project if they weren't pretending it was for poor people. v


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