Lawsuit filed to block $900 million subsidy for Lincoln Yards

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Rev. Marshall Hatch talks to reporters Wednesday about a lawsuit filed to stop the Lincoln Yards project. | Fran Spielman/Sun-Times

A $900 million tax increment financing subsidy approved by the City Council to unlock the development potential of the $6 billion Lincoln Yards project violates both the Illinois Civil Rights Act and the “but, for” requirement of the TIF statute.

That’s the bottom line of an unprecedented lawsuit filed Wednesday by the Grassroots Collaborative and Illinois Raise Your Hand for Public Education.

One week after aldermen approved the record subsidy by a vote of 32-to-13, the two groups marched into Circuit Court seeking a preliminary injunction.

If granted, the injunction would prevent developer Sterling Bay from spending any money on infrastructure that would ultimately be reimbursed by funds generated by the newly-created Cortland and Chicago River TIF.

The lawsuit specifically alleges two violations of the state TIF statute on grounds that the 168-acre site along the Chicago River between Lincoln Park and Bucktown does not meet the “statutory requirement for blight and is not the type of area that qualifies as dependent on the use of public taxpayers funds to spur economic development.”

The complaint further alleges the city’s administration of the TIF program violates the state’s Civil Rights Act.

Aneel Chablani, chief counsel for the Chicago Lawyers Committee for Civil Rights, said the lawsuit is bigger than Lincoln Yards.

It’s a “systemic challenge” to a TIF system used to benefit wealthy white areas — areas “not intended” to benefit from the system under state law. That means the system is perpetuating racial inequity and “negatively impacting low-income communities of color, the very neighborhoods that TIF was intended to benefit,” Chablani said.

“These disparities cannot be dismissed or simply blamed upon the city’s existing patterns of wealth and racial segregation. On the contrary, this is a reflection of a rampant abuse of the TIF system by the city by committing public subsidies to areas that should never qualify under the statutory requirements,” Chablani said.

“This is exactly what the Lincoln Yards process has vividly brought to light. Instead of using TIFs to invest in communities most in need, the city’s approval of the Cortland and Chicago River TIF has taken a step furthering the city’s wealth inequality and increasing economic inequities experienced by low-income communities of color.”

Ald. Brian Hopkins (2nd), whose ward includes Lincoln Yards, poked holes in the argument that the TIF is located in a wealthy white neighborhood that doesn’t need help.

“If you drive down Cortland and Kingsbury and, better yet, take a boat ride down the river, you will see the legacy of 150 years of industrial abuse. You’ll see toxic waste, a deteriorating shoreline — what can only be characterized as blight. It’s there in plain view,” Hopkins said.

Protesters rallied outside City Hall on April 10, the day $1.6 billion in subsidies for two mega-developments, Lincoln Yards and “The 78,” were approved by the Chicago City Council. | Ashlee Rezin/Sun-Times

Protesters rallied outside City Hall on April 10, the day $1.6 billion in subsidies for two mega-developments, Lincoln Yards and “The 78,” were approved by the Chicago City Council. | Ashlee Rezin/Sun-Times

If the lawsuit is successful, one of the largest developments in Chicago history with the potential to reshape the North Side would be stopped dead in its tracks.

The city would be forced to reform the way it administers a TIF program that has fast become Chicago’s favorite — and, former Mayor Richard M. Daley was known to argue, only — economic development tool.

Amisha Patel, executive director of the Grassroots Collaborative, said Lincoln Yards is a “starting point” because the legal argument is stronger. The group is also “exploring our legal options on taking on ‘The 78’ as well.”

The 141-acre Roosevelt/Clark TIF includes a $700 million subsidy to reimburse developer Related Midwest for a host of infrastructure projects that includes new roads, relocated and enclosed Metra tracks, a new bridge and a new CTA Red Line stop at 15th and State.

“We are very excited about the new Council and the fact that we had six or seven aldermen-elects do civil disobedience with us as this vote to approve this Lincoln Yards TIF was happening. These are very promising signs. We have huge allies in the Council [who] are gonna continue to push … to correct the wrongs of the approach on TIF,” she said.

“We also know that’s not gonna be enough alone. This lawsuit gives us another strategy and another tool to take on the misuse and abuse of TIFs. … It makes a very clear case for why we actually will be successful.”

An update to open space acreage in the plans for Lincoln Yards. | Provided photo

An update to open space acreage in the plans for Lincoln Yards. | Provided photo

Law Department spokesman Bill McCaffrey refused to comment on the lawsuit.

Soon-to-be ousted Ald. Pat O’Connor (40th), Rahm Emanuel’s City Council floor leader, likened Wednesday’s lawsuit to the one that ultimately prompted movie mogul George Lucas to move his Lucas museum to Los Angeles.

“If they want to go in and stop it, by all means. I mean — we stopped the Lucas Museum and we still have a really nice parking lot out on the lake,” he said.

“We don’t have that much money laying around to do this infrastructure. So if they’re waiting for us to do it, they’ll be waiting a long time.”

O’Connor then added his own “but, for” take on the controversy: “But for this investment, those developments won’t be there.”

He portrayed the lawsuit as a natural outgrowth of a false narrative peddled by opponents of Lincoln Yards.

“You have a number of people out there [who] believe the city is giving this money to these [developers] as opposed to just paying them for doing the infrastructure,” O’Connor said.

“These folks were dead-set against seeing this passed. And this is just an attempt for them to see if they can block it through the courts because they couldn’t block it here.”

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