Lightfoot to developers of ‘The 78,’ Lincoln Yards: ‘Enjoy your day in the sun’
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Mayor-elect Lori Lightfoot just might have seized victory from the jaws of an embarrassing defeat with her abrupt about-face on the two biggest tax increment financing deals in Chicago history.
Lightfoot had little choice but to go along as the City Council approved both Lincoln Yards and “The 78” on Wednesday.
But she also drew a line in the sand.
“I was very clear with the developers: Enjoy this moment in the sun, because you’re never going to get a deal like this again out of the city of Chicago as long as I’m mayor. And I’m going to hold them accountable, and I think they recognize that,” Lightfoot said after the vote.
“We had very, very candid conversations and I made sure that they understood exactly who I was and that I was going to use all the leverage at my disposal to hold them accountable to the taxpayers.”
That was after she’d already announced late Tuesday that the developers — Sterling Bay for Lincoln Yards and Related Midwest for “The 78” — had agreed to increase their minority- and women-owned business contracts.
The new tally was $400 million total on both projects, up from $320 million. Her staff said that instead of 26% for minorities and 6% for women, the bar was raised to 30% and 10%.
The revised redevelopment agreement includes the change.
“We’re going to be able to exercise a tremendous amount of control and it’s going to give us the opportunity to bring community voices into the process that didn’t happen before,” Lightfoot said in Springfield, where she addressed lawmakers.
“We’ll be making some announcements in the coming days that I think will help address some of the concerns that community members and other stakeholders continue to have about these two projects, particularly Lincoln Yards.”
The TIF subsidies on Lincoln Yards and “The 78” have been controversial for two reasons.
For one thing, the city faces a $1 billion spike in pension payments.
For another, both mega-projects are in affluent parts of the city that don’t appear to meet the traditional “but for” TIF benchmark — the idea that TIF money should be used on projects that, but for such assistance, wouldn’t get built.
Despite Lightfoot’s win on minority contracting, her most ardent supporters will likely be disappointed that she did not reduce the subsidies for either project.
The structure of both deals — with developers being allowed to borrow against the money in several installments and being reimbursed as individual infrastructure projects are certified by the city — will give Lightfoot leverage to make additional changes down the road.
Still, in this round at least, Lightfoot was clearly out-maneuvered by the savvy Mayor Rahm Emanuel, who loves playing political chess.
The retiring mayor forced his successor to sign off on a pair of controversial projects that had not previously borne her fingerprints. Now, Lightfoot and Emanuel both wear the jacket.
Still, Finance Committee Chairman Pat O’Connor (40th) diplomatically denied Lightfoot had been on the brink of an embarrassing defeat before her abrupt about-face.
“The recess was to give the mayor and the mayor-elect time to determine whether this matter would move forward,” O’Connor said. “It’s moved forward based on the discussions that they’ve had in the interim.”
Even so, Lightfoot avoided a loss that would have put her in a politically difficult position — and set the tone for a contentious relationship with the City Council that is likely to be bumpy enough already.
That’s particularly true because Lightfoot has promised to issue an executive order on Day One ending aldermanic privilege, the unwritten rule that gives a local alderman virtually iron-fisted control over zoning and permitting in his or her ward. Most aldermen don’t want to give up that control.
Several aldermen had accused Lightfoot of making a “rookie mistake” by getting involved in Lincoln Yards — and falling into Emanuel’s trap. They have argued she would have been far better off letting him take all the blame for the record subsidies, then extract her pound of flesh from developers as both projects wend their way through the City Hall bureaucracy.
As the clock wound toward midnight Tuesday, and Lightfoot issued that statement on minority and women contracting, she also acknowledged there were “sufficient votes” to pass both subsidies without her support and that she is “not yet the mayor.”
Once she is, though, “I intend to exercise very tight fiscal control, and I believe that we can win some savings in this deal as we go down the road,” Lightfoot said Wednesday.
“And that’s what we’re going to be looking for.”