Sunday, June 08, 2008

Tales from the Crypt: City To Bury $300 Million Mistake under Block 37?

Any doubts that Chicago's corrupt TIF (tax increment financing) system, which diverts somewhere around $500 million a year from general revenues, is a debilitating scam on the city's taxpayers, should be erased by Greg Hinz's story in this week's Crain's Chicago Business, which reports another $20 million in TIF funds are about to be appropriated for the $320 million CTA "superstation" under Block 37. And what will that get us? According to Hinz, a mothballed station.

That's right. After nearly a third of a billion of dollars in spending - currently about $100 million over the original budget - Hinz says the "superstation" will be left unfinished, unusuable, and unopened. No one appears to know just how much more it would cost to complete, so, according to Hinz, it will be sealed to stop the bleeding. Kind of like Tut's tomb, if Tut's tomb had been filled not with artifacts of gold but copies of construction contracts.

The Block 37 "superstation" was a pet project of former CTA head Frank Kruesi. Even as he allowed standard maintenance to be deferred, "slow zones" proliferate, and the CTA make expensive payouts to settle lawsuits resulting from subway derailments, Kreusi still found $60 to $70 million to pour into block 37. On top of that, Block 37 developer Joseph Freed was shaken down to chip in another $19 million to cover the overruns.

And on top of that, $42,000,000 in TIF funds went into the mix, with Hinz reporting another $20 million in TIF funds are about to be sent down the same drain. How can this be?

Because TIF money is spent with a minimum of accountability and transparency. The mayor proclaims; the checks are written. No one got to ask Kreusi or the mayor whether it was really a good idea to construct a transfer point between Red and Blue rail lines at what is probably the most expensive place in Chicago to build it, or a superstation for a express service to the city's airports that didn't exist, and won't exist until someone comes up with another $1.5 billion to fund it.

And will Chicago's teflon mayor Richard M. Daley be held accountable for a boondoggle that in most any other city would be the end of a political career? Don't be ridiculous.

As Ben Joravsky reports in the Chicago Reader, the massive Central Loop TIF from which the Block 37 funds came, by law was supposed to expire at the end of 23 years, which was on June 20, 2007. But in 1999, the mayor's forces in Springfield quietly pushed through an amendment revising the period to 24 years. And so a TIF that had already diverted $900 million in tax revenue has diverted, since its scheduled expiration, another $48,000,000 and counting. $48 million that didn't go to schools, or police or pensions or city services, as the mayor shed crocodile tears about having no alternative but to raise taxes and fees by hundreds of millions of dollars.

And now, Joravsky reports, there are signs Daley will look to extend the Central Loop TIF for another 15 years.

So don't be fooled by the crowds and the shoppers, the sold out theater performances, and all the construction. In a way the city's truly poor neighborhoods can only look on with envy, the Loop is chronically depressed, and the Daley administration has every intention of keeping it that way for a very long time. A billion and half dollars accumulating in the city's hundreds of TIF districts could go a long way towards covering those Olympic overruns.


Anonymous said...

Look on the bright side, now there's a pre-dug hole just the right size for a children's museum!


Anonymous said...

I seem to remember that the main driving force behind the block 37 superstation was none other than the mayor himself.

He wanted it, regardless of whether or not it was viable.

Now, he's hoping to get the Olympics to throw untold billions of TIF dollars at. Lots of people are gonna get rich.