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  #881  
Old Posted Aug 27, 2019, 4:11 PM
SamInTheLoop SamInTheLoop is offline
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Originally Posted by Khantilever View Post
Let's be honest. The "but-for" standard, as people like to use it, is nonsensical. In theory, any and all parcels can and likely will be developed at some point without subsidies, once demand is sufficient. The question is really when and at what intensity.

There is no way Lincoln Yards would be developed at this intensity and so soon without significant TIF subsidies.

Also, saying that the TIF wouldn't have qualified if we accounted for rising land prices, which are themselves a function of expectations regarding the TIF... By that logic, no TIF can ever be justified. This was a long time coming and expected by everyone. If you look at assessments the moment the TIF deal is about to be signed, it would be surprising if they didn't already significantly capitalize the revised expectations of accelerated development.

Under your logic, everything could pass but-for, because a developer could just propose something that is denser/larger/in some way wouldn't be able to be built without public assistance. Nice try. That's not what TIFs are for.

At it's core, LY is a poorly planned project, and a horrible use of TIF.

I do hope the lawsuits at minimum cause a great deal of delay here, if not meet with some success. And, that the Lightfoot administration heavily renegotiates everything after the first allocation of TIF $ to something that is much more reasonable and justifiable. And, that investigative journalists continue to dig. There just may be more to find - we shall see.

Finally, I see the SB bots have swarmed into action.
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  #882  
Old Posted Aug 27, 2019, 4:12 PM
SamInTheLoop SamInTheLoop is offline
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Originally Posted by Mr Downtown View Post
Related's Clark-Roosevelt site ticks a lot more of the "blighted" designation boxes, including a complete absence of infrastructure. It's pretty unrealistic to expect it to develop but for the presence of a TIF.

The same is not true of land that's already served by streets and sewerage in between Lincoln Park and Bucktown.

Very well stated. It's night and day, LY and 78.
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  #883  
Old Posted Aug 27, 2019, 4:22 PM
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ardecila ardecila is offline
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Originally Posted by Mr Downtown View Post
Related's Clark-Roosevelt site ticks a lot more of the "blighted" designation boxes, including a complete absence of infrastructure. It's pretty unrealistic to expect it to develop but for the presence of a TIF.

The same is not true of land that's already served by streets and sewerage in between Lincoln Park and Bucktown.
Maybe, but the development that occurs there in the absence of TIF (and in the absence of new infrastructure) might not be what we want. Do we really want more townhouse developments? Can low density development really underwrite the kinds of public green spaces that the community, and the city at large, is demanding along the river?

I think LY is probably too intense for the infrastructure that's available, and even too intense for the infrastructure that is planned... but the density shown by Sterling Bay is just a maximum, I fully expect the final build-out will be more along the lines of Fulton Market than Hudson Yards.
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  #884  
Old Posted Aug 27, 2019, 5:16 PM
Khantilever Khantilever is offline
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Originally Posted by SamInTheLoop View Post
Under your logic, everything could pass but-for, because a developer could just propose something that is denser/larger/in some way wouldn't be able to be built without public assistance. Nice try. That's not what TIFs are for.
How in the world did you infer that? I see logic isn't your strong suit.

I simply said a "but-for" test, as commonly used, is a poor criteria for rejecting a TIF because everything fails the "but-for" test if we take it literally.

But that doesn't mean we should accept every TIF. There can and should be rules for when TIFs should be implemented. The test should be whether the resulting development with the TIF (accounting for its cost) is better for the city than the development that would result if the TIF was not implemented. In other words, the classic test we use for any cost benefit analysis of a subsidy program.

The benefits way outweigh the costs here.
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  #885  
Old Posted Aug 27, 2019, 6:14 PM
BrinChi BrinChi is offline
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Originally Posted by Khantilever View Post
The test should be whether the resulting development with the TIF (accounting for its cost) is better for the city than the development that would result if the TIF was not implemented. In other words, the classic test we use for any cost benefit analysis of a subsidy program.

The benefits way outweigh the costs here.

How do we know that the benefits outweigh the costs here? Has this been measured? I would say that for this to be true, the additional tax revenue above and beyond what would have developed without the TIF must be greater than the amortized cost of paying for and maintaining the new upgraded infrastructure. That's the only way this is a long-term net gain for the city; otherwise it's a subsidy for a neighborhood that doesn't need a subsidy.
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  #886  
Old Posted Aug 27, 2019, 7:46 PM
Khantilever Khantilever is offline
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Originally Posted by BrinChi View Post
How do we know that the benefits outweigh the costs here? Has this been measured? I would say that for this to be true, the additional tax revenue above and beyond what would have developed without the TIF must be greater than the amortized cost of paying for and maintaining the new upgraded infrastructure.
The object of government is not the maximization of tax revenue. A given policy does not have to increase tax revenue to increase the general welfare. Though I would be surprised if this TIF isn't profitable from that narrow perspective anyway, if we properly account for all of its tax effects.

There are employment gains, amenity improvements, and increases in property values that will result. Not just for the development itself, but spillover benefits to other workers and residents of the city. Those taxed and untaxed benefits need to be accounted for as well.
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  #887  
Old Posted Aug 27, 2019, 8:18 PM
BrinChi BrinChi is offline
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Originally Posted by Khantilever View Post
The object of government is not the maximization of tax revenue.
I'm not saying that the government should be making money off of property taxes, but it does need to balance budgets and be at least revenue neutral. This is for the general welfare. The government is supposed to provide equal services in pricey neighborhoods (i.e. Lakeview) as well as the least dense/lowest price neighborhoods (e.g. Englewood). For the city to be able to sustainably lose money in Englewood they need to get extra revenue in the affluent neighborhoods. Right now I'm not seeing equal levels of service across the city, which means we either need more net revenue or what we have is being mismanaged.

Applied to planned developments, this doesn't mean that every development needs to make money for the city, but it's the ones that do make money (i.e. Lincoln Yards) that enable TIFs to subsidize development in areas where development cannot currently self-sustain (95th street).
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  #888  
Old Posted Aug 27, 2019, 8:53 PM
Vlajos Vlajos is offline
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Originally Posted by BrinChi View Post
I'm not saying that the government should be making money off of property taxes, but it does need to balance budgets and be at least revenue neutral. This is for the general welfare. The government is supposed to provide equal services in pricey neighborhoods (i.e. Lakeview) as well as the least dense/lowest price neighborhoods (e.g. Englewood). For the city to be able to sustainably lose money in Englewood they need to get extra revenue in the affluent neighborhoods. Right now I'm not seeing equal levels of service across the city, which means we either need more net revenue or what we have is being mismanaged.
I'm curious what is not equal. Schools are funded the same all over the city. Police and fire protection is all over the city. Roads are the same all over. Garbage collection the same. Those are the main functions of city government.
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  #889  
Old Posted Aug 27, 2019, 9:04 PM
SamInTheLoop SamInTheLoop is offline
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Originally Posted by Khantilever View Post
How in the world did you infer that? I see logic isn't your strong suit.

I simply said a "but-for" test, as commonly used, is a poor criteria for rejecting a TIF because everything fails the "but-for" test if we take it literally.

But that doesn't mean we should accept every TIF. There can and should be rules for when TIFs should be implemented. The test should be whether the resulting development with the TIF (accounting for its cost) is better for the city than the development that would result if the TIF was not implemented. In other words, the classic test we use for any cost benefit analysis of a subsidy program.

The benefits way outweigh the costs here.


You misunderstand what the but-for actually is about.

The requirement is not that the specific proposed development would not occur but for the Tax Increment Financing. It is that economic development would not occur on the property without this assistance. Economic development most certainly would occur on the Lincoln Yards land. It may or may not be what you would like to see built - and would not be what Sterling Bay has planned, but that's not the point at all.

What we're talking about is a matter of the legislation. Cost-benefit analysis is a separate matter.
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  #890  
Old Posted Aug 27, 2019, 9:10 PM
SamInTheLoop SamInTheLoop is offline
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Originally Posted by ardecila View Post
Maybe, but the development that occurs there in the absence of TIF (and in the absence of new infrastructure) might not be what we want. Do we really want more townhouse developments? Can low density development really underwrite the kinds of public green spaces that the community, and the city at large, is demanding along the river?

I think LY is probably too intense for the infrastructure that's available, and even too intense for the infrastructure that is planned... but the density shown by Sterling Bay is just a maximum, I fully expect the final build-out will be more along the lines of Fulton Market than Hudson Yards.
Something reasonably dense would be built on the Lincoln Yards land in absence of TIF help. There is this narrative out there that it would be nothing but townhomes or a combination of them with SFH's. Very well might be part of the mix (and that's appropriate, actually), but my bet is it would be more dense overall.

Regardless, TIF certainly should not be used in affluent areas to guide development as a planning tool (even if well-intentioned in steering toward better urban planning principles). Not what TIF is for....
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  #891  
Old Posted Aug 27, 2019, 9:59 PM
Khantilever Khantilever is offline
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Originally Posted by SamInTheLoop View Post
You misunderstand what the but-for actually is about.

The requirement is not that the specific proposed development would not occur but for the Tax Increment Financing. It is that economic development would not occur on the property without this assistance. Economic development most certainly would occur on the Lincoln Yards land. It may or may not be what you would like to see built - and would not be what Sterling Bay has planned, but that's not the point at all.

What we're talking about is a matter of the legislation. Cost-benefit analysis is a separate matter.
You seem to have completely missed my point.

Mr Downtown said with respect to the 78: "It's pretty unrealistic to expect it to develop but for the presence of a TIF." His point being that the 78 is a better candidate for a TIF since it passes the test.

I responded by saying the "but-for" test in its strictest interpretation is a stupid standard since every development, including the 78, should fail it.

The fact that the "but-for" test is often interpreted to mean that the TIF is only allowed if no development of any kind--not just the particular project as proposed--would occur without the subsidy is precisely the problem with it.

ALL parcels can eventually be developed to some extent without subsidies. If every single case fails the rule, the rule is itself a failure.

Does anyone really believe a huge parcel next to the CBD could never become valuable enough to be developable without some subsidies? In 30 or 50 years, when the CBD is bursting at the seams, it's not going to be worth it for a developer to invest more in local infrastructure?

[Of course, most people and lawmakers would not apply such a strict interpretation of the test in such cases. They just want to use that interpretation for a project they don't like, precisely because they know they can delay and shrink the project by cutting the subsidy.]

Last edited by Khantilever; Aug 27, 2019 at 10:13 PM.
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  #892  
Old Posted Aug 27, 2019, 10:32 PM
BrinChi BrinChi is offline
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Originally Posted by Vlajos View Post
I'm curious what is not equal. Schools are funded the same all over the city. Police and fire protection is all over the city. Roads are the same all over. Garbage collection the same. Those are the main functions of city government.
Drive around the south and west sides sometime and just pay attention to public infrastructure like school buildings, roads, sidewalks, public trash cans & trash pickup, parks. Then come tell me whether everything is funded the same. In pockets of growing/gentrifying areas? perhaps. but by and large, no way.
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  #893  
Old Posted Aug 27, 2019, 10:40 PM
Vlajos Vlajos is offline
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Originally Posted by BrinChi View Post
Drive around the south and west sides sometime and just pay attention to public infrastructure like school buildings, roads, sidewalks, public trash cans & trash pickup, parks. Then come tell me whether everything is funded the same. In pockets of growing/gentrifying areas? perhaps. but by and large, no way.
I do that often enough. Roads are the same everywhere on average. There are massive pot holes on my street right now in Lincoln Square. Every CPS school is funded on the same formula, some extremely poor schools actually got reprieve during Rahm's time from the per pupil funding formula. I haven't noticed sidewalks being different. I have noticed more trash lying around in some areas but I'm not sure that has anything to do with garbage collection.
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  #894  
Old Posted Aug 27, 2019, 11:30 PM
SamInTheLoop SamInTheLoop is offline
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Originally Posted by Khantilever View Post
You seem to have completely missed my point.

Mr Downtown said with respect to the 78: "It's pretty unrealistic to expect it to develop but for the presence of a TIF." His point being that the 78 is a better candidate for a TIF since it passes the test.

I responded by saying the "but-for" test in its strictest interpretation is a stupid standard since every development, including the 78, should fail it.

The fact that the "but-for" test is often interpreted to mean that the TIF is only allowed if no development of any kind--not just the particular project as proposed--would occur without the subsidy is precisely the problem with it.

ALL parcels can eventually be developed to some extent without subsidies. If every single case fails the rule, the rule is itself a failure.

Does anyone really believe a huge parcel next to the CBD could never become valuable enough to be developable without some subsidies? In 30 or 50 years, when the CBD is bursting at the seams, it's not going to be worth it for a developer to invest more in local infrastructure?

[Of course, most people and lawmakers would not apply such a strict interpretation of the test in such cases. They just want to use that interpretation for a project they don't like, precisely because they know they can delay and shrink the project by cutting the subsidy.]

There is no interpretation of but-for that holds an area would otherwise “never” be developed - or for that matter would otherwise not be developed in a mere decade or two. You’re just engaging in thought exercises - nothing more.
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  #895  
Old Posted Aug 27, 2019, 11:53 PM
BrinChi BrinChi is offline
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I do that often enough. Roads are the same everywhere on average. There are massive pot holes on my street right now in Lincoln Square. Every CPS school is funded on the same formula, some extremely poor schools actually got reprieve during Rahm's time from the per pupil funding formula. I haven't noticed sidewalks being different. I have noticed more trash lying around in some areas but I'm not sure that has anything to do with garbage collection.
Alright fair enough. Let's assume roads, sidewalks, parks etc. are just as shitty on average across the entire city. There are some shiny new bright spots, sure. Why would we use a TIF to build brand new infrastructure in the middle of an affluent neighborhood when the city can barely maintain what it has, unless that TIF is a true "investment" such that it creates more measurable wealth across the city than it costs in public funds?
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  #896  
Old Posted Aug 28, 2019, 12:11 AM
LouisVanDerWright LouisVanDerWright is offline
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Originally Posted by Mr Downtown View Post
Related's Clark-Roosevelt site ticks a lot more of the "blighted" designation boxes, including a complete absence of infrastructure. It's pretty unrealistic to expect it to develop but for the presence of a TIF.

The same is not true of land that's already served by streets and sewerage in between Lincoln Park and Bucktown.
Exactly, the 78 was actually vacant for like 40 years because of its lack of infrastructure and the exitence of infrastructure (rail line) that would have to be adjusted and built over.

Then you have Lincoln Yards where the land was in use until Sterling Bay purchased a facility that had just been vacated and demolished it. Those Finkl Buildings would have had another use. They would probably be film studios by now if SB hadn't clouted their way to DX level zoning like a mile away from anywhere that could be considered "downtown" with zero transit access. Cinespace is now going after the Washburne site in Little Village across from their new annex at 31st and Kedzie that's fully lease by Netflix. The Ryerson Cinespace and Lagunitas complex was a former old school Steel mill just like Finkl. They even relocated to a new facility on the outskirts of the city just like Finkl did. The Ryerson complex is also PMD just like Finkl. So you are telling me that some adaptive reuse of those old school clear span buildings wouldn't be possible in Lincoln Park when it had already started happening 2 years before Lincoln Yards was even a public proposal in Douglas Park?

No, Finkl was not blighted and the developer chose to raze functional, marketable buildings. The desired use of DX district with no transit is not related to whether the buildings were "blighted" or not. If it weren't then you could, in fact, just go around calling anywhere in the city that's RS-3 two flats or bungalows "blighted" because it's not yet zoned DX-7 and you want to build 30 story buildings. Better shovel out $1 billion in TIF to build a new skyline for Dunning...

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Originally Posted by ardecila View Post
Maybe, but the development that occurs there in the absence of TIF (and in the absence of new infrastructure) might not be what we want. .

Very NIMBY of you. That's why we need an independent planning function in city hall that actually makes good policy that incentivizes and mandates some of what "We want".
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  #897  
Old Posted Aug 28, 2019, 1:56 AM
SamInTheLoop SamInTheLoop is offline
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Originally Posted by LouisVanDerWright View Post
The desired use of DX district with no transit is not related to whether the buildings were "blighted" or not. If it weren't then you could, in fact, just go around calling anywhere in the city that's RS-3 two flats or bungalows "blighted" because it's not yet zoned DX-7 and you want to build 30 story buildings. Better shovel out $1 billion in TIF to build a new skyline for Dunning...

Yes.
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  #898  
Old Posted Aug 28, 2019, 1:57 AM
SamInTheLoop SamInTheLoop is offline
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Originally Posted by LouisVanDerWright View Post
That's why we need an independent planning function in city hall that actually makes good policy that incentivizes and mandates some of what "We want".

Oh yes.



TIF is not a planning incentivization tool. It's an economic development tool for areas in need.
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  #899  
Old Posted Aug 28, 2019, 2:06 AM
SamInTheLoop SamInTheLoop is offline
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Originally Posted by Vlajos View Post
I do that often enough. Roads are the same everywhere on average.

This is decidedly not my experience, on average. I've seen residential streets in some low income neighborhoods in parts of the south side that looked like what I would imagine street conditions to be like in war zones, or third world countries. It's much rarer that I see that in middle-to-upper income neighborhoods. I recall a few years back, driving through the southern half of Back of the Yards - so this is the largely African American section south of ~50th or so - I'd never actually seen anything like the condition of those streets in the U.S. I'm not being hyperbolic here - it was shocking, and appalling. Livid.

I strongly suspect it is not just streets. Likely other types of vital infrastructure are not, in practice/actual lived experience (not policy or on the books), funded/maintained evenly throughout the city. Nothing would please me more than to be proven wrong - that this is not in fact the case. I'm not, however, naive.
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Last edited by SamInTheLoop; Aug 28, 2019 at 5:23 PM.
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  #900  
Old Posted Aug 28, 2019, 4:17 PM
sammyg sammyg is offline
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The question of the intent of the law to promote development in areas like Lincoln Yards or for areas truly in need, as well as what standards to apply, is exactly why Raise Your Hand and Generation All filed the lawsuit. Once we get actual caselaw governing the TIF statute, developers and planners will have concrete guidance on what qualifies and what doesn't.
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