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Rahm’s fleet-facility deal helps the north side more than the south side

The north side gets upscale development and at least $14 million a year in TIFs. The south side gets garbage trucks, and if all goes well, a dry cleaner.

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On August 28, Mayor Emanuel had one of his infamous "Oh happy day" press conferences, proclaiming great news for the south side.

The cause for celebration? He's moving a fleet of garbage trucks and other city-owned vehicles from North Avenue and the Chicago River to vacant city-owned land at 67th and Wentworth.

The north-side land would be sold to some as of yet unselected developer, who will presumably make a fortune building housing and retail on the site.

"This announcement is the latest example of our efforts to revitalize the south side," the mayor said.

Or as the Chicago Tribune—in a burst of goodwill for the mayor—put it: "For Emanuel, the move fits into a broader strategy of trying to leverage valuable real estate assets to create economic development in some of the city's struggling neighborhoods."

Well, folks, it's not that I don't automatically believe absolutely everything I see in the Tribune, but I must confess I had my doubts about this deal as I read about the presser.

I mean, it's rare, if ever, that this mayor—or his predecessor, for that matter—puts the needs of the south side first in such endeavors.

So I wondered: Is Rahm leveraging north-side development to benefit Englewood, or is he using Englewood to shield attention from a lucrative handout that's about to come down the pike for some very fortunate north-side developers?

Let's take a look at what we know right now.

The motor vehicle facility—which stores most of the city's garbage trucks—is squeezed between Wicker Park and Lincoln Park on the banks of the Chicago River.

Historically this area's primarily been filled with factories and warehouses. But in April, Emanuel announced he was planning to accelerate its transformation by phasing out the zoning protection that shelters industry from encroaching residential development.

In other words, time for developers to make some real money!

Of course, the city's got to park its garbage trucks somewhere. So the mayor's proposing to put them at 67th and Wentworth, where Kennedy-King College used to be.

The land was cleared in 2010 after Mayor Daley moved the college to 63rd and Halsted. A steady stream of students, faculty, and other employers—along with a $10 million TIF handout—has drawn development to that new location, including a Whole Foods and a Starbucks. (It wouldn't be Chicago without a TIF handout.)

Just to remind you, a tax increment financing district is an area designated by the city in which property tax dollars that would otherwise go to the schools and other taxing bodies are frozen for up to 24 years. As land in the district increases in value, the higher taxes paid by property owners get funneled to TIF bank accounts instead. The mayor can spend the money on almost anything he wants.

I think we could call this a slush fund—but let's not get distracted.

The fleet facility deal involves TIF districts on both ends of town. The facility's currently located in the North Branch (South) district. And the mayor's proposing to move it to the 67th and Wentworth district.

Interestingly enough, the North Branch TIF was created to help protect existing industries from encroaching residential development.

And the Wentworth TIF was intended to spark residential and commercial development in the absence of Kennedy-King.

So now the mayor's flipped the whole thing, with the north side getting housing and retail and the south side getting garbage trucks.

This doesn't speak well of the Planning Department's ability to follow through on its plans—unless it's being ironic, as in the John Lennon song, "Life is what happens to you while you're busy making other plans."

The mayor says he'll compel whoever buys the north-side site to construct a motor vehicle facility on 67th and Wentworth, saving the city from building one itself.

My guess is that the asking price on the north side will be cut to cover the costs of building the south-side facility. So some lucky developer will be getting prime real estate at bargain-basement costs.

But maybe the mayor will fool me and drive a hard bargain when he sells the north-side land.

Another thing you need to know about this venture: Neither the south-side site nor the north-side site pays property taxes, as they're both owned by the city. But as soon as the developer buys the fleet facility land, extra property tax dollars will pour into the north-side TIF.

Second Ward alderman Brian Hopkins tells me that the North Branch TIF will thus increase its yield by "about 80 percent" after the fleet facility is sold and developed.

This year the North Branch will collect about $7.5 million in property taxes. So we're likely talking about a future annual yield of at least $14 million.

That's money the mayor—with input from Hopkins—is free to spend on sidewalks, traffic signals, planters—hell, he could pave North Avenue with gold, if he wants.

Meanwhile, 67th and Wentworth won't be getting any TIF yield, because the motor vehicle facility will still be owned by the city.

I'm not sure how it will result in many new jobs for Englewood either, because the city's simply moving the existing jobs at the fleet center to the site.

My guess is that most fleet facility workers will drive in and out of Englewood without spending much money in the community—as seems to be the case with the north-side facility.

One of the mayor's aides told the Tribune in late August that he thinks the facility will draw a bank and a dry cleaner to Englewood. I haven't seen such optimism since Little Orphan Annie.

In sum, the north side's getting upscale residential and commercial development and most likely at least $14 million a year in TIF money. And the south side's getting garbage trucks, no TIF funds, and, if all goes well, a dry cleaner.

Here's hoping that future mayoral proclamations about this venture are a little more honest.   v

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