Back in October, when the Merc and the Board of Trade announced they were merging, I got a call from a source in City Hall, who said, "Just watch, they'll wind up getting TIF cash out of this."
Well, it took longer than we expected, but according to a recent article in Crain's Chicago Business, city officials are proposing to fork over a $40 million TIF handout to CME Group Inc., the combine created when the Chicago Mercantile Exchange bought out the Chicago Board of Trade.
As part of the merger, CME plans to fire over 400 employees so it can reduce expenses, improve productivity, and make even more money for shareholders and top executives as the group consolidates in the board's headquarters at 141 W. Jackson. (A prediction: this deal could well wind up biting property tax payers twice, if the city, as I suspect it will, dishes out TIF money to help the Merc convert its old trading floor at 30 S. Wacker Drive into offices.)
I guess I shouldn't expect the people at the Merc and the Board of Trade to have a conscience about taking city money after firing their employees. If the little guys get kicked in the teeth from time to time, hey, that's just the way things go in our free-market system -- right?
The thing is, TIFs are intended to protect Chicago from the ravages of the free market, stimulating new property taxes for our schools, parks, etc, by subsidizing development in blighted communities.
They're supposed to create jobs, not reward companies for eliminating them. Typically, Mayor Daley measures a TIF's effectiveness by the number of jobs it creates or maintains. For instance, the city recently gave Navteq, the computer-mapping company, a $5 million TIF handout to keep 900 jobs in Chicago. That amounts to $5,555 for every Navteq job retained or created.
In this case, the city's effectively offering CME $100,000 property tax dollars for every job it eliminates. As one TIF critic at the county put it, "We have officially gone through the looking glass with this one."