United Continental Holdings, parent of United Airlines, is giving back $5.6 million in City of Chicago tax incentives.
The incentive money is tied to United’s 2007 move to its corporate headquarters at 77 W. Wacker Drive, along the Chicago River. Because of United’s recent plans to move out of that building and consolidate its headquarters into Willis Tower where it has other operations, the airline said it was “appropriate” to return the money. However, it wasn’t necessary.
City officials said United had so far fulfilled its obligations for receiving the money, such as maintaining a minimum employment level in the 77 W. Wacker Drive building, and that the incentives would have traveled with the company as it moved several blocks down Wacker Drive to Willis Tower.
via Chicago Tribune.
Well Kudos to United Continental!!
As you (should already) know, TIF’s are evil. United’s actions are commendable. Abolishing TIF’s; putting as much money back into the general tax rolls as possible is the goal. Giving the money back to the TIF shows that it’s not needed. That’s a great first step in getting rid of the TIF altogether.
Ten years ago, Chicago’s most powerful alderman, Edward M. Burke, and the rest of the City Council signed off on a deal that promised $16 million in taxpayer subsidies to the Wm. Wrigley Jr. Co. to help it build a new corporate campus on Goose Island rather than move to the suburbs.
Three years later, Burke’s law firm, retained by Wrigley, persuaded Cook County officials to lower the property assessments for two buildings the chewing gum giant had bought down the street from the new campus.
Burke’s legal work helped Wrigley cut its property taxes by more than $412,000 between 2006 and 2008, records show.
For that, the company says, it paid the alderman about $90,000 in legal fees.
via Chicago Sun-Times.
What the story fails to mention is that Wrigley also received millions in TIF money to build the hitherto unfinished building on Goose Island.
The story is a good read (i.e. good read it) as it also talks about how Wrigley has been sold to Mars. So now all the millions spent on top of the millions in lost revenue will likely never be recouped.
Just embarrassing all around…. unless you’re The Machine.
On the fourth day of the teachers’ strike, protesters targeted school board member Penny Pritzker, whose family owns the Hyatt hotel chain.
At 3:30 p.m., thousands of demonstrators dressed in red gathered outside the Hyatt Regency Chicago, at 151 E. Wacker Dr., protesting the $5.2 million in TIF money the city provided for a new Hyatt hotel in the Hyde Park neighborhood. Around 4 p.m., they began marching south on Michigan Avenue toward the South Loop.
Protesters said the TIF money spent on the Hyatt in Hyde Park would have been better used to improve schools in the neighborhood, and avoid budget cuts that have hurt the local schools.
via CBS Chicago.
Indeed, the TIF system in broken and the law needs to be repealed in Springfield. Of that there can be no argument.
But let’s look at this for just a second…
$5.2 million for the new Hyatt. 26,000 CPS teachers.
That’s $200 per teacher. That would be an average salary increase of 0.000026% for each teacher FOR ONE YEAR.
And that my friends is why unions suck. They will keep the kids on the street fighting over mice nuts. For all their fancy “for the children” rhetoric it’s really about draining every last nickel from the taxpayer.
This story is actually from early April:
According to a report issued today by Chicago Inspector General Joe Ferguson, a fluke of state law means that many neighboring business districts that collect an extra property tax to pay for security, advertising and the like actually have had to pay twice — once for security, et al., and once to the TIF.
The report specifically deals with Special Service Areas: little neighborhood shopping districts such as Lincoln/Belmont/Ashland, South Shore, Greektown and Wicker Park/Bucktown in which the shop owners agree to impose an extra tax on themselves to pay for things of mutual interest. …
The problem is that 80 percent of the city’s more than 60 SSAs also overlap wholly or partially with TIF districts.
The way a TIF district works is that property taxes are frozen at a current level, with the TIF getting the growth over the next 23 years — known as increment — to spend on TIF projects. But when an SSA levies an additional tax for its needs, the amount of the levy is imposed both on the old base levy and the increment.
In other words, to help themselves, merchants have to pay twice. And that’s amounted to an extra $7.5 million to TIFs last year and about $7 million in preceding years, according to Mr. Ferguson.
via Crain’s Chicago Business.
Man I really hate TIFs.
New data out of Standard & Poor’s this morning painted a somewhat mixed picture of the U.S. housing market: showing home prices may have hit bottom.
via Business Insider.
Hit bottom? Unlikely. But what I really wanted to show what this chart:
Looking at the worst performing cities: Atlanta, Las Vegas, Chicago.
In January 2011, I wrote:
Further, when a developer gets a piece of land, financing, or other services from the TIF it lowers the developer’s costs. This causes an interesting thing to happen. This developer has a competitive advantage over a developer who has to buy land or services at market rate. Therefore, this developer can sell units either cheaper or at a higher margin than the developer without the TIF. This interferes with the market forces, causing more units to be built in TIF districts than would otherwise by market forces alone. This over-development has caused Chicago’s housing market to be overly sensitive to the nationwide collapse in real estate. In Chicago we have overbuild so many housing units that we have damaged not only the home owners market but also the rental market. Thousands of condos build to be owner occupied are now rentals. Standard rental apartments are going unfilled because of the cheap flood of rental condos.
I believe I was right then… and right now.