Lessons Learned from Lawndale

13 Tips for Effective TIF Advocacy

Presented to the Washington Park Community
by Valerie F. Leonard of the Lawndale Alliance
July 30, 2011
•Washington Park Chamber of Commerce
•Washington Park Advisory Council
•Washington Park Neighborhood Association
•Washington Park Concerned Residents
•Washington Park Neighborhood Association
What is a TIF?
• A TIF (Tax Increment Financing) district is an
area within a city that, after much careful study
by the city and expert consultants, is found to be
“blighted” and without hope of attracting private
investment without some governmental
intervention.

Source: ABC’s of Tax Increment Financing

TIF Eligibility Factors
• Under state law, areas proposed for TIF designation must
possess numerous blighting factors to be eligible:

-Age – Inadequate utilities

-Obsolescence – Deleterious land use or
-Code violations layout
-Excessive vacancies – Lack of physical
-Overcrowding of maintenance
facilities – Lack of community
-Lack of ventilation, light, planning
sanitary facilities – Dilapidation or
-Excessive land coverage deterioration

TIF assistance for eligible projects usually exceeds $1 million.

1) Source: City of Chicago website

How TIFs Work
• "Freezing" the Tax Base and Collecting
"Increment"
▫ TIFs are politically appealing tools because they do not
require the City to raise your tax rate. Instead, TIFs
generate money for redevelopment by raising the value
of the property that is taxed. (raising the value of
the base upon which we are taxed)
▫ It works like this:
 When the TIF is established, the County looks at the
value of all the property in the TIF. (The County uses the
term "EAV," or "Equalized Assessed Value," to describe
property value.) This is the "Base EAV.“

Source: Cook County Clerk website

How TIFs Work
• TIFs capture money by devoting all new property taxes
to redevelopment. That means that once a TIF is
established, taxing bodies (the City of Chicago's general
treasury, the Chicago Public Schools, the Chicago Park
District, etc.) get no new revenue from the TIF. Their
share of the property taxes is "frozen" at the level it was
at just before the TIF was approved.
• The taxes on all the new property value in the TIF go into
the TIF fund and are reinvested in that area.
• Over time, the TIF gets more tax revenue than the
general funds of the taxing bodies from which the taxes
were diverted when the TIF was created
Source: Cook County Clerk website
How TIFs Work

• Where does this new property value come from? It can

happen in one of three ways.
1. New development on vacant land that, before the new project
was built, paid little or no taxes.
2. Improvements to existing properties, such as an addition to a
house, a factory, or a store.
3. Taxes on existing properties could go up, either because of
inflation (sometimes called "natural growth" in property
values) or because of gentrification in the neighborhood.
• In any of these cases, the new tax dollars go to the project
fund controlled by the TIF district, not to the City, the
schools, or any other taxing body. Money can be transferred
between TIFs, but only between adjacent TIFs.

Source: Cook County Clerk website

Here's an example:

Example
Step Description Amount
1. Base EAV The total value of all property in the $10,000,000
TIF just before the TIF district was
established.

2. Year One EAV The total property value of the TIF $11,000,000
one year after it was created.

3. Growth in EAV The difference between the Base $1,000,000

EAV and the current EAV.

4. Tax Rate The percentage of EAV (property 10%

value) that goes to taxes.

5. Increment The growth in property value 10%

multiplied by the tax rate - i.e., the
new taxes that go to the TIF fund.

Source: Cook County Clerk website

Long Term Impact of TIFs

Source: Wikipedia
TIF Programs
▫ Neighborhood Improvement Program (NIF)
▫ TIFWorks
▫ Small Business Improvement Fund (SBIF)
▫ Streamlined TIF
▫ Riverfront Improvement Fund
▫ Laboratory Facilities Fund

Source: City of Chicago website.

Ogden-Pulaski TIF
Ogden-Pulaski TIF
There are approximately 173 blocks • Project Goals
133 blocks (77%) are in the 24th Ward
40 blocks (23%) are in the 22nd Ward
▫ Community that is stable,
economically and racially diverse,
• Boundaries secure and beautiful

▫ Comprehensive housing program

that serves homeowners and
renters of all income groups

▫ Revitalized commercial base

highlighted by Ogden Avenue as
the main corridor

Particulars ▫ Preservation and enhancement of

Sponsors/Developers-City of Chicago, historic or architecturally
LISC, Steans Family Foundation, significant buildings in the Project
LCDC Area
Consultant- Johnson Research Group
Wards-24,22 ▫ New investment and development
Date Created-4/9/08 opportunities
Termination-4/9/33
Uses-Residential,Commercial
TIFWorks Eligible
Project Highlights
• Up to 20,000 square feet commercial development along
Ogden Avenue, Pulaski Avenue, 16th Street (combination
commercial and residential)
• Potential re-zoning of the area in the vicinity of Kedzie
Avenue and Cermak Road from residential to
commercial/light manufacturing.
• Up to 300 units of new housing (including affordable
housing units)
• New job opportunities for local residents, including
welfare to work programs and jobs for ex-offenders.
Issues
• The will of local property owners-- who
collectively will pay over $250,000,000
in property taxes over the next 23 years-
seems to be ignored in favor of a handful
of influential foundations and tax-
exempt organizations.
• Up to 1,200 persons could be potentially
displaced as a result of the
implementation of the proposed TIF.
Likewise, 635 residential units (1,200
people) could be impacted by building
code violations.
• There are a substantial number of errors
in the acquisition plan and the list of
homes potentially displaced by the TIF.
• The plan calls for racial and economic
diversity, but does not articulate how this
would be achieved. This is of particular
concern in a community that is currently
93% African, with a median income of
$18,342.
• The plan was not developed with broad
based community input. There is no
indication that the City Department of
Planning and Development is willing to
change the proposed redevelopment plan
and budget to take into account the
suggestions provided during the two
public meetings they convened on the
TIF.
• There are no mechanisms in place for
community oversight for development in
the Lawndale community. The Lawndale
Community Conservation Council was
dissolved several years ago. There is no
TIF Advisory Council.
Strategies
• Educated ourselves on the
process by hosting experts
from other parts of the City;
reading articles; attending
forums
• Learned as much as we could
from folks like Jackie Leavy,
John Paul Jones, Joe Ann
Bradley and Ben Joravsky
• Teach-ins to review 385 page
TIF document with rank and
file residents
• Town hall meetings
• Meetings with elected officials
• Position papers analyzing
issues, impacts and solutions
• Attendance at every public
meeting held by various
agencies who had to approve
the process
• Press conferences prior to
meetings to approve the TIF at
various stages
• CAN TV series
• Guests on Radio Shows
• Press Releases
• Blog Posts
• Found allies from around the
City and beyond, including the
Institute for Justice
• Provided public testimony at
public meetings
 • Budget
• Major Projects
Project Type Amount
Analysis, Administration, Studies, etc. $7,500,000
▫ Actual
Property Acquisition, Site Prep, etc. $10,000,000  SBIF 2010
Rehabilitation of Existing Buildings $35,000,000  Private Funding-
Public Improvements $30,000,000 $2,000,000
Relocation Expenses $5,000,000
 TIF Funding-$1,000,000
Job Training/Welfare to Work $2,500,000
 2011 Allocation-$333,333
Day Care Services $6,000,000
Interest Subsidy $4,000,000
▫ Speculative
Total $100,000,000  Lawndale Corridor Initiative
Concept, July, 2008
Funds Expended to Date  Projects outlined in February,
2010 Fund Balance-$3,860,030
% to TIF in 2010-21%
2008, Gaper’s Block Interview
% to General Fund in 2010-79% with Alderman Munoz
Revenues Since Inception-$3,923,452  CTA Bus Barn
2010 Revenues-$2,354,679
2010 Expenditures-4$1,934
 Open Space
Beginning EAV- $216,455,015  Senior Housing
2010 EAV- $289,789,402  Industrial Corridor
% Growth in EAV- 33%
Ogden-Pulaski TIF
Projected Revenues and Expenses
Item Year Amount
Incremental Property Tax Revenue (100% Collected) 2011 2,736,900.00
Incremental Property Tax Revenue (100% Collected) 2012 2,736,900.00
Incremental Property Tax Revenue (100% Collected) 2013 3,531,500.00
Unallocated Funds (Jan-11) 2011 3,755,053.00
Neighborhood Improvement Program 2011 (500,000.00)
Neighborhood Improvement Program 2012 (500,000.00)
Program Administration 2011 (24,700.00)
Program Administration 2012 (25,200.00)
Program Administration 2013 (25,700.00)
Street Resurfacing - Lawndale, Cermak to Ogden 2011 (49,040.00)
Green Alley - Grenshaw/ Roosevelt/ Keeler/ Kildare 2011 (287,000.00)
Reimbursement for TIF Eligibility Study 2011 (100,000.00)
Lighting - Cullerton, Pulaski to Keeler 2011 (130,000.00)
Street Resurfacing - Kevdale, 16th to 18th 2011 (48,904.00)
Lighting - Ridgeway Av., 16th to Ogden 2011 (195,000.00)
Lighting - Komensky, Roosevelt to 19th 2011 (390,000.00)
Small Business Improvement Fund 2011 (500,000.00)
Small Business Improvement Fund 2012 (250,000.00)
Small Business Improvement Fund 2013 (250,000.00)
Residential Lighting - Drake, Ogden to Cermak 2011 (100,000.00)
Alley Reconstruction - 13th St, Karlov, Kedvale, 14th St. 2011 (219,000.00)
Residential Lighting - Harding, 16th to Ogden 2011 (260,000.00)
Residential Lighting - Lawndale, 16th to Ogden 2011 (195,000.00)
Alley Construction - Cullerton, Kildare, 21st St, Kostner 2011 (295,000.00)
Projected Remaining Balance 2013 8,415,809.00
Ogden-Pulaski TIF
Lawndale Corridor Development Initiative Project Concepts

Example Site: Example Site:

West Ogden Avenue and S. Millard Street West Ogden Avenue and N. Millard Street
6-Story, Mixed Use Development 5-Story, Mixed Use Development

Residential Space Commercial Space

Residential Space Commercial Space
68,000 SF 13,600 SF
80,720 SF 4,828 SF
30% Affordable 5 Small Retail Stores 20% Affordable 10 Small Retail Stores

Total Cost: Total Cost:

$18.4 Million $16.6 Million

Loss: Loss:
$100,000 $340,000
Example Site:
19th Street and Pulaski
3-5-Story, Mixed Use Development

Residential Commercial Total Cost:

Space Space $22.2 Million
95,000 SF 8,160 SF
Loss:
20% Affordable 6 Small Retail
$645,000
Stores
13 Tips for TIF Advocacy
Tip #1: Know the Issues
 What factors led to the creation of the TIF?
 What are the current events in the community?
 How does the proposed plan address development issues?
 How does the manner in which the plan addresses the issues
impact the community as a whole? Me as an individual?
 What do developers have to gain and how much?
 What do tax payers have to lose?
 Are the benefits greater than the cost?
 What is the proposed budget for the redevelopment plan?
 How were local taxpayers involved in the creation in the plan?
 If there are deficiencies in the plan, how can they be corrected?
Tip #2: Know the Approval Process
and the Rules of Engagement
Introduction to
Public Community Community Review by the Joint
Meeting Development Review Board
Commission

Public Hearing before

Review by City
the Community Introduction to City
Council Finance
Development Council
Committee
Commission

Approval by the Full

City Council
Tip # 3: Know the Laws, Ordinances,
Policies and Plans that Drive the TIF
• State Code (Go to the State of Illinois General
Assembly website, www.ilga.gov/and search under
Tax Increment Financing to see what bills come up.)
• City of Chicago Website (Go to
www.cityofchicago.org and search under TIF, City
land sales, freedom of information request,
interested party)
• TIF Redevelopment Plan Ordinances
▫ Ask Chicago Department of Planning and
Development to see copies of any plans referenced in
the TIF Redevelopment Plan ordinance
• Housing Impact Study
Tip #4: Know What Questions to Ask
 What are the goals and objectives for the TIF? Are these in conflict with the
best interests of the community?
 How do we make sure developers are held accountable to the community?
 How has this TIF and other TIFs in the community performed in the past?
 Have other TIFs lived up to their expectations?
 How many people from the community have been hired? Do they still have
the jobs?
 How do we improve the skill level of our workforce and business community
to take advantage of opportunities the TIF brings?
 How many local minority-owned businesses have received TIF assistance?
 How many home owners and local residents have received TIF assistance?
 What economic development plans are in place to supplement the TIF?
 How have our schools and parks been impacted?
Tip # 5: Analyze the Redevelopment
Plan from Your Own Vantage Point
 If you are a resident, read to learn how your taxes may be impacted,
or what’s in it for you as a resident
 Will my taxes go up?
 Will I or my neighbors be displaced?
 Will my property be taken through eminent domain?

 If you are a business owner or leader of a chamber of commerce, read

to learn how you or your members may be impacted
 Does the plan bring in other businesses that are competitive with mine or
my members?
 What incentives are offered to existing businesses?
 Will my business’ property or any of my members’ business properties be
taken over through eminent domain?
Tip #6: Find Allies Who
Share Common Interests
 Activists from other communities
 Politically connected or neutral people who have the
ear of those you need to influence
 Elected officials who are promoting issues and
ordinances that are consistent with your positions
 Research, policy and advocacy groups
 Local journalists and reporters
 Bloggers
 Community based organizations
 Engaged residents
Tip # 7: Know Your Rights
and Legal Standing

• Is the TIF being carried out in a manner

consistent with the local, state and federal laws?
• Has the TIF somehow deprived homeowners of
any of their fundamental rights (property rights,
civil rights, etc.)?
• Has the TIF effectively discriminated against a
group of people?
Tip #8: Understand the Ethics Behind
the Plan
• Are there potential conflicts of interest?
▫ Is there adequate separation between the roles of planner, real estate developer, major
land holder, real estate investor and the advisory group (if such a group exists)?
• Is there a potential for divided loyalty?
▫ In some cases, elected officials sit on boards of directors of organizations that
sponsor or support TIFs. How do they handle the competing interests of the
electorate and the community-based organization?
• Is there potential for the plan to displace one group of people in favor of
another?
• Are advisory committees staffed through an open, nonpartisan political process?
• Are the interests of low income taxpayers, who must ultimately pay for and
reimburse all costs, adequately represented? What do they get out of the deal?
• Do special interest groups have a greater voice than local residents?
• Are there win-win strategies to minimize conflicts and even the playing field?
Tip #9: Know Where Your Elected
Officials Stand on the Issues

• Have meetings with Alderman, Cook County

Commissioner, State Representative, State
Senator, Congressman, Senators
• Host town hall meetings and other public
meetings
• Review voting records
• Read articles in local press
Tip #10: Keep Your Constituency
Informed of the Latest Developments
 Telephone
 Door to Door Canvassing/Flyering
 CAN-TV
 Community Newspaper Ads and Articles
 Local and National Newspapers
 Radio
 Websites
 Blogs
 Newsletters
 Direct Mail
 E-Mail
Tip # 11: Be Transparent in
Your Communications
 Integrity is Key
 Utilize language of the City to the greatest extent possible
when describing official proceedings, even if you have to
simplify it for people who may not be familiar
 Never distribute flyers that could be intentionally misleading
just to generate a crowd. The truth is more than sufficient to
generate interest
 If you send out materials with errors of fact, correct the
mistake immediately, through the same channels you
provided the incorrect information, even if it means
retracting statements in the local newspapers, or re-sending
1,000’s of e-mails and mailers.
Tip # 12: Accept the Consequences
of Your Actions
 Speaking Truth to Power has consequences
 Positive
 Effect changes to systems that result in win-win solutions
 Heightened awareness of the issues
 More engaged community
 Negative
 Attempts to discredit groups and their messages advocating
change
 Leaders are often isolated and labeled as trouble makers
 Exclusion from key meetings by community “gatekeepers”
 Key stakeholders begin to “distance” themselves
 Retaliation
Tip #13: Document Your Work
• Note changes in systems, policies, increased learning
• Keep copies of meeting notices, sign in sheets, meeting
notes
• Post as much documentation on websites and blogs as
possible
 Focusing on past successes serves as encouragement when
chips are down
 Communicating success maintains momentum
 Documentation of progress attracts others to your process
 Documenting mistakes helps you keep from repeating them
 Sharing lessons learned with others provides an excellent
opportunity to promote your agenda, increase capacity of
others; receive constructive feedback and establish long term
relationships.
Further Information
• For further information regarding this
presentation, contact Valerie F. Leonard at
773-21-3137 or valeriefleonard@msn.com.
• This presentation has been archived at
http://lawndalealliance.blogspot.com. You may
visit this blog to review archived files from the
Lawndale Alliance.