CHICAGO — The city would have an official framework to revoke property tax incentives it’s awarded to so-called “bad actors” and developers whose projects have negative impacts on the health and safety of residents under a proposed ordinance (O2020-3395) from Ald. Michael Rodriguez (22nd).
The ordinance is set to be considered at 2 p.m. Tuesday by the City Council’s Committee on Economic, Capital and Technology Development, three months after the council approved a non-binding resolution (R2020-353) as an opening salvo in the effort to establish a process to rescind tax incentives from irresponsible developers.
Both the ordinance and resolution were born in the aftermath of Hilco Redevelopment Partners’ demolition of a smokestack in April at the former Crawford Power Station in Little Village that went awry and blanketed the surrounding residential area in dust.
The city fined Hilco $68,000 for the incident, but elected officials and local activists said that wasn’t enough and called for the city to strip Hilco of the nearly $20 million in property tax credits it was granted to redevelop the property with a 1 million-square-foot warehouse distribution center.
The city has used the property tax incentives as a way to help spur development, but companies awarded the rebates have to be held accountable to what they say they’re going to do, Rodriguez said.
“We’re the fiscal stewards of taxpayer dollars,” Rodriguez told The Daily Line on Monday. “If a company is promising to do good in a community and they’re receiving taxpayer dollars to do that, they should, at the very least, do what they say they’re going to do and not harm the community
“If they do, we should have a process to take that away,” the alderman added.
The city does not currently have a system to revoke property tax rebates it has awarded, and Rodriguez said he is not aware of any previous instance when the city has rescinded the incentives.
Rodriguez said he does not view the ordinance as anything that would keep responsible companies away from developing properties in the city.
“I think no good developers should be worried about this,” he said.
Ald. Gilbert Villegas (36th), who chairs the economic development committee, said he is supportive of the proposed ordinance.
“As long as it’s the legislative body that does the revocation, that’s something I think is important that we be a part of,” Villegas said. “It’s especially important in cases like what’s happening in the 22nd Ward with Hilco that the alderman have a tool or instrument to hold companies accountable,” he said.
The proposed ordinance says applicants for city tax incentives “should be held to account for betraying the public trust by engaging in egregious violations of law or acts that jeopardize the health, safety, and welfare of the surrounding community and the City as a whole.”
Once a resolution calling for revocation is filed, the council’s economic development committee would provide notice to the property taxpayer. Each proposal for revocation would be reviewed by the commissioner of the Department of Planning and Development, who would send a recommendation to the Committee on Economic, Capital and Technology Development prior to a public hearing on the matter.
During the public hearing held by the economic development committee, the party that stands to have its tax incentives rescinded would have the opportunity to speak. The City Council has the final say on any proposed resolutions and would be able to take action with a simple majority vote.
The city needs to act as a “prudent steward” of public money and protect Chicago residents, the ordinance goes on to say. The city can accomplish that by holding parties receiving tax incentives accountable for promises they make to the city, and accountable for their actions that have a negative impact on residents’ health, safety and welfare, the ordinance states.
The proposed ordinance allows the mayor, alderman of the ward where the property is located or commissioner of the Department of Planning and Development to file a resolution calling for the revocation of a property tax incentive.
Also on Tuesday, the committee is scheduled to confirm eight of Mayor Lori Lightfoot’s appointments to various Special Service Area boards around the city.
The committee will also host hearings on potential term expansions of four different Special Service Areas located in the 49th, 42nd and 2nd Wards.
Villegas delays call for study of budget ‘efficiencies’
Villegas said he will delay an order (SOr2020-232) calling for Budget Director Susie Park to issue a request for information to relevant technology sectors to “identify efficiencies” in the city’s technology systems and process and any potential revenue resources from Dec. 1 to Feb. 1.
The alderman is delaying a vote on the order because he first wants to hear a progress report from Chief Data Officer Nick Lucius on a study that has been underway since August that is also tasked with finding efficiencies.
Villegas said it’s important to regularly examine the way services are delivered and see if there are ways to improve. While Villegas said the move is not purely spurred by the unprecedented $1.2 billion projected budget gap for 2021, the looming budget crunch is a factor.
“I don’t think we’ve modernized and been as innovative as we should be. I think this is a perfect time to do it,” he said. “Sometimes budget crunches are the vehicle to do it.”
Infrastructure subject matter hearings delayed
A subject matter hearing on infrastructure that was scheduled Tuesday’s hearing will be delayed until representatives from the City Colleges of Chicago, the CTA, Chicago Public Schools and the Chicago Park District can all be in attendance, Villegas said Monday afternoon.
The committee heard presentations from the Department of Water Management, the Chicago Department of Transportation and the Department of Assets, Information and Services at an Aug. 18 hearing.