A new analysis of the $1.2 billion Chicago has awarded in Tax Increment Financing (TIF) over the past 10 years has found that much of the money has been gone to large corporations and other institutions operating in thriving neighborhoods, not struggling businesses in blighted areas. These findings are not shocking: we’ve noticed the abuse of TIF around Chicago and other metro areas for years. So too have local observers like the now defunct Neighborhood Capital Budget Group and Ben Joravsky at The Chicago Reader.
The new study, conducted by journalism students at Columbia College in Chicago, analyzed hundreds of documents obtained through Freedom of Information Act requests. The students have also mapped the TIF deals—something the city has long declined to do—and posted the TIF agreements. See the map and the documents: here.
Of the 171 TIF deals provided to companies over the decade, the study found that more than half were clustered in or around Chicago’s vibrant central business district, the Loop. Chicago has 77 community areas, but few as prosperous as the Loop, whose residents (62 percent white) have a median income of $75,000. More depressed neighborhoods like Englewood (median income of $19,000, 98 percent Black), West Garfield Park ($23,000, 96 percent Black), and North Lawndale ($18,000, 94 percent Black) got only a handful of projects.
About $600 million went to private sector entities, accounting for the largest share of the $1.2 billion. These included subsidies to companies like United Airlines [Struggling Chicago finds $25 million for United Airlines] ($31 million), USG Corp. ($7 million), and NAVTEQ ($5 million). Some $100 million was used to lure companies to the city or to discourage them from leaving. In many cases, subsidies went to big box retail stores that supplanted small businesses. Target received at least $18.5 million at five locations throughout the city.
Housing developments received $340 million in subsidies, while $200 million went to non-profits, hospitals, and cultural institutions like the Chicago Symphony Orchestra. Many of these non-profits have enormous philanthropic bases. Numerous hospitals in Illinois are under scrutiny as to whether they ought to remain tax-exempt. Some housing developers used TIF money to create luxury condos. Other TIF deals have actually been documented to create blight.
Chicago has yet to implement its 2009 sunshine law and shed light on how taxpayer money is spent. The 2009 law required the city to put online searchable copies of every redevelopment agreement since 2004. Many were not posted and journalists at Columbia College had to undergo arduous Freedom of Information Act Requests to collect the information. The efforts of the students have both provided a useful analysis of the troubled TIF program as well as a valuable public data resource.