City creating TIF to draw $100 million to transform hospital into Olympic Village
Chicago taxpayers must spend $100 million to transform the old Michael Reese Hospital site on the Near South Side into an Olympic Village.
On Wednesday, Mayor Daley’s Olympic bid team confirmed the $100 million pricetag to install roads, sewers and utilities, raising questions about how the Chicago 2016 organizing committee and Daley can continually say the games won’t cost taxpayers a dime — especially at a time when the city is dealing with a mounting fiscal crisis.
While Chicago won’t know until October if it beat out its competition to win the 2016 Summer Games, the city has agreed to create a tax-increment-financing (TIF) district surrounding Michael Reese to generate the $100 million subsidy.
TIFs re-direct taxes away from schools, parks and other local government agencies bankrolled by property taxes. Property taxes within a TIF district are frozen at existing levels for 23 years.
The decision to draw a $100 million subsidy from the tax-increment-financing (TIF) — or create a TIF within a TIF to generate even more money — comes at the worst possible time for Chicago taxpayers.
Most of the city’s unionized employees have been forced to swallow furlough days and other concessions to eliminate a threatened $300 million year-end shortfall. More than 430 members of two unions that refused to make concessions have been laid off.
Next year threatens to be even worse. Daley’s preliminary 2010 budget has a $520 million gap that can only be closed with service cuts, tax increases or a combination of the two. Some aldermen want to use unallocated TIF money to eliminate that shortfall.
Ald. Joe Moore (49th) said the $100 million subsidy “doesn’t come as a shock,” given the expense of building new streets, water and sewer lines to the Michael Reese campus.
But, he said, “It begs the whole question about whether this is a good time for the Olympics, given our financial straits.”
