Emanuel’s share-the-wealth fund generates $4 million so far
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Mayor Rahm Emanuel’s plan to let downtown developers build bigger and taller projects provided they share the wealth with impoverished neighborhoods has already generated $4 million and City Hall is preparing to dole out the first round of grants.
Starting Feb. 27 and continuing until late April, applications will be accepted for grants covering up to 65 percent of total costs. Interested applicants are asked to visit the city’s website at www.neighborhoodopportunityfund.com.
Eligible projects must be located in low-to-moderate income census tracts. Priority will be given to South, Southwest and West Side projects that bring retail to struggling commercial corridors, grocery stores to food deserts and cultural amenities to neighborhoods without them.
Grants of up to $250,000 are expected to be distributed shortly after the application window closes. City Council approval is required for grants exceeding $250,000. Those projects will be submitted to aldermen later this spring.
The $4 million in initial seed money was generated by more than a dozen downtown projects.
Those downtown developers were allowed to build bigger and taller projects in a 20-percent-larger downtown area that includes 800 additional acres — provided they contributed to a share-the-wealth fund for neighborhood development.
“This is a unique opportunity for us to drive economic development and job growth in our most challenged neighborhoods and make sure the entire city is benefitting from the growth downtown,” Emanuel was quoted as saying in a press release.
“Through our Neighborhood Opportunity Fund, we are leveraging millions of dollars to catalyze economic activity and create amenities in our neighborhoods that need it most.”
Planning and Development Commissioner David Reifman has billed the Robin Hood-style plan as a “critical way to level the playing field for under-served communities. … Our neighborhoods cannot thrive unless our downtown is strong and supports them.”
He has promised a “robust and transparent process” for determining which neighborhood projects get funded and which don’t.
“We have all kinds of protections. We talk about very specific types of projects it can fund and specific areas where those funds can be used. Those that can have a catalytic effect in neighborhoods, create jobs, provide goods and services that are lacking,” Reifman told the City Council on the day the mayor’s plan was approved.
Until last year, the city’s “Zoning Bonus Ordinance” allowed downtown developers to build additional square footage if they agreed to build underground parking garages, outdoor plazas, winter gardens and other features that benefited the project itself — but offered limited public benefits.
By eliminating those outdated bonuses and closing “loopholes,” the mayor hoped to generate a pool of money that could be used to bankroll projects in long-neglected inner-city neighborhoods like Englewood, Auburn-Gresham and Garfield Park.
The program is patterned after an affordable housing ordinance that requires developers to build affordable units or make hefty contributions to a fund that would be used to build affordable housing.
“The mayor’s priority with this program and in the second term is to create resources for the city as a whole. This is a way of leveraging our downtown growth while at the same time creating resources for our neighborhoods. It’s a false dichotomy: neighborhoods vs. downtown. This is a way of demonstrating that with a program that supports both,” Reifman has said.
Since early 2012, 24 downtown projects used 38 bonuses to add two million additional square feet.
The revised density bonuses in a broader downtown area are expected to generate at least $10 million-a-year.
The money is divided into three different pools. Eighty percent goes to the neighborhood opportunity fund. And 10 percent apiece goes to a citywide “adopt-a-landmark” fund and to a “local impact fund” to support mass transit, streetscapes and other public improvements within one mile of the sites generating development funds.
During a contentious Zoning Committee meeting last year, aldermen accused Emanuel of creating a mayoral “slush fund” akin to tax-increment-financing.
Downtown Ald. Brendan Reilly (42nd) warned his colleagues on that day that they were “handing over an incredible amount of control” to Emanuel and Reifman by allowing them to award grants under $250,000 without City Council approval.
“Some people whom I’ve talked to have equated this to a slush fund,” Reilly said on that day.
Unlike the small business improvement fund, Reilly warned then that there was no “third-party insulated from all of the pressures that come in politics” to vet grant applications and decide who gets “gap financing for key investments in struggling commercial corridors.”
“To my colleagues who care about having some control over what happens in their wards and being able to be part of the conversation on how funds are spent, we’re handing over an incredible amount of control to the commissioner of planning and to the administration without our input and consent,” he said.
Last year, Emanuel blamed his dismal showing among African-American voters in a recent New York Times poll on “40 years” of disinvestment on Chicago’s South and West Sides.
The share-the-wealth program was just one of several steps the mayor has taken to try and reverse that trend and win back support from black voters who believe their unsafe neighborhoods have been left behind.
So was the creation of a $100 million Catalyst Fund to bridge the funding gap outside the downtown area and the hiring of former Chicago Urban League President Andrea Zopp as Chicago’s $185,000-a-year deputy mayor and chief neighborhood development officer.