Developers in a 20 percent larger downtown area — one that includes 800 additional acres — would be free to build bigger and taller projects to generate millions for neighborhood development under a share-the-wealth plan advanced Tuesday amid concern that it would create a mayoral “slush fund” akin to tax increment financing.
The 12-to-2 vote by the City Council’s Zoning Committee included heated testimony from aldermen who support the mayor’s lofty goals but don’t like the way he’s going about it. Business groups also warned that, like the revised affordable housing ordinance, the new density bonuses could put a chill on booming downtown development.
Downtown Ald. Brendan Reilly (42nd) warned his colleagues that they were “handing over an incredible amount of control” to Mayor Rahm Emanuel and his handpicked Planning and Development Commissioner David Reifman.
Reilly complained about the “big open void” that would be created by allowing Emanuel and Reifman 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.
Critics have long complained that TIFs have created a fund that Chicago mayors can dole out to clout-heavy developers who fill their campaign funds.
Reilly raised those same issues about the so-called “Neighborhood Opportunity Fund” ordinance. He supports the concept of getting rid of “outdated density bonuses” and dedicating the funds from a new bonus system to “support struggling communities.”
But Reilly said the current ordinance lacks enough detail about governance and transparency.
Unlike the small business improvement fund, Reilly said there is 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.” He also complained about the City Council having no control over grants of less than $250,000.
“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.
Reilly argued that the “mandate on this City Council from the last election” is that voters want “more transparent decision-making, more accountability and public process when we’re spending dollars” — whether the money is generated by density bonuses or rising property taxes.
“It’s a false choice that either we get this passed tomorrow versus 3 1/2 weeks from now or else the neighborhoods go to hell in a handbasket,” Reilly said.
“This isn’t about downtown versus the neighborhoods and downtown gets everything. Downtown is doing more than its fair share of helping lift all boats and this ordinance, if it’s done right, could do even better. But to just blow by governance and transparency …. That’s a mistake, folks. We’ve been here before as a City Council, [with a mayor who says], `Trust us. It’ll be fine. Don’t worry about that. We’re in a hurry. Got to get it done tomorrow.’ We’ve been burned like that before, folks.”
Ald. George Cardenas (12th) agreed with Reilly about the need for “transparency, collaboration and building trust” with a City Council emboldened by the Laquan McDonald controversy that has weakened Emanuel politically.
“We’ve got a lot of tough votes to take ahead when it comes to raising revenue. We have a tough vote ahead on schools, rebuilding our communities. Collaboration needs to be worked on. A pause is a great way to rebuild the relationship and the trust with the administration and my colleagues,” Cardenas said.
Housing Committee Chairman Walter Burnett (27th) rose to the mayor’s defense.
“The mayor’s trying to do something. And he’s trying to do it — not at the expense of us. He’s trying to do it at the expense of developers. … They should be giving back because they’re gonna be making a lot of money,” the alderman said.
“Instead of them just getting the bonus for nothing and making more money, now they’ll put money in the pot that goes to help other communities. What’s wrong with that?”
Reifman billed the Robin Hood-style plan as a “critical way to level the playing field for underserved communities. … Our neighborhoods cannot thrive unless our downtown is strong and supports them.”
He promised a “robust and transparent process” for determining which neighborhood projects get funded and which don’t with all “grants” over $250,000 approved by the City Council.
“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 said.
The city’s existing Zoning Bonus Ordinance allows downtown developers to build additional square footage if they agree to build underground parking garages, outdoor plazas, winter gardens and other features that benefit the project itself but offer limited public benefits.
By eliminating those outdated bonuses and closing loopholes, the mayor now hopes to generate a pool of money that could be used to bankroll projects in long-neglected neighborhoods like Englewood, Auburn-Gresham and Garfield Park.
The new 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.
Emanuel has 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.
He’s trying just about everything to reverse that trend — and the public perception — and win back support from black voters who believe their unsafe neighborhoods have been left behind.
Just last week, he formally announced his plan to hire former Chicago Urban League President Andrea Zopp as his $185,000-a-year deputy mayor and chief neighborhood development officer.
The share-the-wealth program is another major step in that effort.
“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 versus downtown. This is a way of demonstrating that with a program that supports both,” Reifman said.
Since early 2012, 24 downtown projects used 38 bonuses to add 2 million additional square feet of space
The revised density bonuses in a broader downtown area are expected to generate at least $10 million a year.
The money would be divided into three different pools:
- 80 percent would go to a neighborhood opportunity fund dedicated to rebuilding struggling commercial corridors
- 10 percent would go to a citywide “adopt-a-landmark” fund
- 10 percent would go to a “local impact fund” to support mass transit, streetscapes and other public improvements within one mile of the sites generating development funds