INVESTIGATION: The Troubled History of the Fund Tapped for Rahm’s Controversial Cop Academy

$20 million in West Side TIF money for job creation has sat unspent, and another $36 million was “ported” to other districts. Now more than $10 million is being used for a police academy that will create only 100 temporary jobs.

Rebecca Burns February 20, 2018

Students from the National Teachers Academy, a Chicago Public School that the city intends to close, confront council members about their decision to allocate $95 million towards a police training facility. (Photo courtesy of Monica Trinidad)

The city of Chica­go has offi­cial­ly closed the deal on the pur­chase of a 30-acre lot for a con­tro­ver­sial new police and fire­fight­er train­ing academy.

The claim that the police academy is a singular opportunity to promote development on the West Side is a strange one in light of the fact that the city has for years failed to spend millions of dollars earmarked for just this purpose.

In Novem­ber, the City Coun­cil approved a $9.6 mil­lion acqui­si­tion of vacant land in the Garfield Park neigh­bor­hood. The coun­cil over­rode the wish­es of dozens of police account­abil­i­ty, edu­ca­tion and eco­nom­ic jus­tice advo­cates — even joined by Gram­my-win­ning Chica­go artist Chance the Rap­per — who pre­sent­ed hours of tes­ti­mo­ny oppos­ing the project.

Pub­lic out­cry is moti­vat­ed in part by sus­pi­cion that May­or Rahm Emanuel’s pro­pos­al for a state-of-the-art train­ing facil­i­ty, with total costs esti­mat­ed at $95 mil­lion, is intend­ed to deflect atten­tion from deep­er police account­abil­i­ty reforms advo­cat­ed by com­mu­ni­ty activists — as well as by the Depart­ment of Jus­tice (DOJ) in a scathing Jan­u­ary 2017 report.

I don’t know of a sin­gle study that says that if you pour some new cement, put up some new win­dows and give the cops a swim­ming pool, they’re going to stop shoot­ing black and brown peo­ple,” said Alder­man Car­los Ramirez-Rosa, the lone dis­sent­ing vote, at a press con­fer­ence by groups opposed to the project pri­or to the Novem­ber vote.

Emanuel main­tains that the new acad­e­my is nec­es­sary to address the DOJ’s train­ing rec­om­men­da­tions, but pro­po­nents are also billing the project as a much-need­ed eco­nom­ic stim­u­lus for the city’s strug­gling West Side.

We often said, When are we going to get that eco­nom­ic boost over here on the West Side?’, Now you got it,” said Alder­man Emma Mitts (37th), whose ward includes the new acad­e­my, when the plan was unveiled in July 2017.

The city esti­mates that the project will cre­ate about 100 tem­po­rary con­struc­tion jobs, but it’s not oth­er­wise clear how the train­ing facil­i­ty would ben­e­fit the neigh­bor­hood economically.

The claim that the police acad­e­my is a sin­gu­lar oppor­tu­ni­ty to pro­mote devel­op­ment on the West Side is also a strange one in light of the fact that the city has for years failed to spend mil­lions of dol­lars ear­marked for just this purpose.

An In These Times inves­ti­ga­tion has found that more than $20 mil­lion has been sit­ting unspent in an account meant to pro­mote invest­ment in the Tax Incre­ment Financ­ing (TIF) dis­trict where the acad­e­my is slat­ed to be built, known as the North­west Indus­tri­al Cor­ri­dor. Anoth­er $36 mil­lion has been port­ed” to oth­er dis­tricts. That means that of near­ly $82 mil­lion set aside from prop­er­ty tax­es for devel­op­ment, only $25 mil­lion has actu­al­ly been spent on the North­west Indus­tri­al Cor­ri­dor. Now, the city wants to use near­ly half of the remain­ing funds — $10.8 mil­lion — for the police academy.

In this con­text, the police acad­e­my deal adds insult to injury for the res­i­dents of West Side neigh­bor­hoods who have strug­gled to redi­rect resources to schools, afford­able hous­ing, health­care and good jobs avail­able to neigh­bor­hood residents.

This shows what type of things and peo­ple Rahm tru­ly cares about,” says Yolan­da J (who declined to use her full name), a 15-year-old res­i­dent of North Lawn­dale who is orga­niz­ing oppo­si­tion to the project as part of the #NoCo­pAcad­e­my coali­tion. The city’s pri­or­i­ties are all messed up.”

The T on TIFs

TIF is a pub­lic fund­ing tool that redi­rects prop­er­ty tax dol­lars in a giv­en TIF dis­trict” to spe­cial projects in the same dis­trict. In turn, TIF projects are sup­posed to spur eco­nom­ic devel­op­ment in blight­ed areas (and even­tu­al­ly pay for them­selves through increased prop­er­ty tax rev­enue). While this prin­ci­ple remains large­ly unproven, Chicago’s use of TIF has explod­ed since the 1990s. The city now has 145 TIF dis­tricts, encom­pass­ing one out of every four total Chica­go prop­er­ties, that col­lect­ed $561 mil­lion in tax rev­enue last year. Many dis­tricts are sit­ting on huge sur­plus­es of unspent funds. Accord­ing to the TIF Illu­mi­na­tion Project, there was more than $1.4 bil­lion sit­ting in Chicago’s TIF accounts as of Jan­u­ary 2017. Prop­er­ty tax­es divert­ed into TIF accounts would oth­er­wise have gone to the cash-strapped Cook Coun­ty, Chicago’s pub­lic schools, parks and oth­er pub­lic ser­vices, though a com­pli­cat­ed tax for­mu­la makes it dif­fi­cult to deter­mine exact­ly how much is lost to TIFs.

While TIF is pur­port­ed­ly an eco­nom­ic devel­op­ment tool for poor­er neigh­bor­hoods, analy­ses of city records have shown that what spend­ing does hap­pen occurs large­ly in already wealthy neigh­bor­hoods: Near­ly half of the $1.3 bil­lion in tax incre­ment financ­ing funds allo­cat­ed from 2011 to 2015 went to the Loop and sur­round­ing areas. That’s led schol­ars, pub­lic offi­cials and com­mu­ni­ty activists alike to ques­tion whether TIF tru­ly pro­motes eco­nom­ic devel­op­ment, and for whom.

When mon­ey is spent, it’s often with lit­tle over­sight. A par­tial audit of spend­ing in the Cen­tral West and the Cen­tral Loop TIF dis­tricts by the Chica­go inspec­tor gen­er­al in 2010 con­clud­ed that inter­nal con­trols were not ade­quate to ensure effec­tive man­age­ment of the TIF expen­di­tures.” The report cit­ed, among oth­er con­cerns, decep­tive billing prac­tices” and $90,000 of ques­tion­able and unau­tho­rized expens­es” dur­ing the TIF-financed ren­o­va­tion of the exist­ing Chica­go police acad­e­my, which city offi­cials now say is too out­dat­ed to use.

In a report released last year, Cook Coun­ty Clerk David Orr called for TIF reforms, includ­ing a full review of funds, not­ing that near­ly 10 per­cent of prop­er­ty tax rev­enue billed with­in the city of Chica­go is now divert­ed into TIF accounts.

A giant suck­ing sound

To put TIF spend­ing on the police acad­e­my project into con­text, In These Times reviewed the his­to­ry of expen­di­tures in the North­west Indus­tri­al Cor­ri­dor. Rede­vel­op­ment agree­ments for the hand­ful of projects approved in the dis­trict show that the com­pa­ny sell­ing the land, whose own­ers donat­ed $10,000 to Rahm Emanuel’s last cam­paign, will receive the largest TIF pay­ment to date in the North­west Indus­tri­al Corridor.

Since its estab­lish­ment in 1998, the North­west Indus­tri­al Cor­ri­dor TIF has col­lect­ed more than $80 mil­lion in prop­er­ty tax­es. The orig­i­nal rede­vel­op­ment plan from 1998 notes the loss of thou­sands of jobs in the area after Schwinn, Playskool and oth­er plants closed their doors dur­ing the past 40 years. By improv­ing roads and oth­er infra­struc­ture, clear­ing vacant land for re-use and recruit­ing new busi­ness­es, plan­ners hoped to reestab­lish the area as a mod­ern indus­tri­al cen­ter,” there­by expand­ing the tax base and boost­ing employ­ment in sur­round­ing res­i­den­tial areas. A table of esti­mat­ed rede­vel­op­ment costs lays out $181 mil­lion (in today’s dol­lars) in total spend­ing, includ­ing $61 mil­lion for pur­chase and reha­bil­i­ta­tion of vacant land and $18.3 mil­lion on job training.

Instead, a review of the district’s expen­di­tures from 2001 – 2016 shows just $25 mil­lion in spend­ing. $1.9 mil­lion was spent on land acqui­si­tion and prepa­ra­tion, while $13 mil­lion was spent on pub­lic improve­ments,” a broad cat­e­go­ry that includes pay­ments to the parks and trans­porta­tion depart­ments, as well as to pri­vate com­pa­nies. $2.7 mil­lion spent on job train­ing ini­tia­tives was shared between more than 10 small employ­ers and non-prof­its. At least $1.3 mil­lion was paid out to a sin­gle devel­op­er for con­struc­tion of a new Coca-Cola dis­tri­b­u­tion facil­i­ty that report­ed­ly employed only 28 local res­i­dents in 2009, out of 244 employ­ees, accord­ing to a 2011 inves­ti­ga­tion by the web­site AustinTalks, a project of Colum­bia Col­lege Chicago’s jour­nal­ism pro­gram. (The Coca-Cola did not respond by press time to a request for the lat­est employ­ment fig­ures at the facility.)

The city has not dis­closed in its annu­al reports how many jobs have been cre­at­ed by TIF expen­di­tures in the North­west Indus­tri­al Cor­ri­dor or how much the prop­er­ty tax base has expanded.

At the end of the 2016 fis­cal year, the North­west Indus­tri­al Cor­ri­dor was still sit­ting on more than $20 mil­lion of unspent funds, accord­ing to the most recent annu­al report avail­able. The city’s fund­ing pro­jec­tions show that $10.8 mil­lion has been reserved for the land pur­chase in the 2017 fis­cal year. This amount is greater than the $9.6 mil­lion approved by the City Coun­cil, with the over­run large­ly allo­cat­ed toward site prep, envi­ron­men­tal review, and relat­ed costs,” accord­ing to a spokesper­son for the city’s Depart­ment of Plan­ning and Development.

An addi­tion­al $36 mil­lion in col­lect­ed prop­er­ty tax­es was actu­al­ly been trans­ferred out of the dis­trict through an obscure process known as port­ing.”

From 20042016, $28 mil­lion was port­ed from the North­west Indus­tri­al Cor­ri­dor TIF into neigh­bor­ing dis­tricts. This fund­ing was used to pay down the debt on bonds issued to finance new school con­struc­tion under for­mer May­or Daley’s $1 bil­lion ini­tia­tive to build 24 new schools and ren­o­vate three oth­ers, part of the Renais­sance 2010 plan announced in 2006 as an elec­tion approached.

While many com­mu­ni­ty activists have called for TIF sur­plus­es to be real­lo­cat­ed to Chica­go Pub­lic Schools (CPS), TIF-financed school-build­ing boom is con­tro­ver­sial because it does not allo­cate resources for any­thing oth­er than the phys­i­cal build­ings, and the spend­ing appears to deep­en exist­ing inequal­i­ties. A 2012 report by Roo­sevelt soci­ol­o­gist Stephanie Farmer found that 24 per­cent of TIF dol­lars spent on CPS projects went to selec­tive enroll­ment schools, which make up just 1 per­cent of CPS.

Crit­ics of the police acad­e­my see a trou­bling con­nec­tion between the use of TIF dol­lars to pro­mote char­ter schools, which pun­ish and expel black stu­dents at high­er rates than neigh­bor­hood schools, and the use of TIF dol­lars for a police train­ing acad­e­my that activists say will fur­ther alien­ate and endan­ger black and brown youth.

Devel­op­ment, for whom?

This isn’t the first time that West Side neigh­bor­hoods have clashed with the city over its def­i­n­i­tion of devel­op­ment.” In 2008, the city pro­posed a $10 mil­lion TIF sub­sidy for a new ware­house and dis­tri­b­u­tion cen­ter at the for­mer site of Brach’s can­dy fac­to­ry. Once a key local employ­er, the can­dy-corn mak­er closed its doors in 2003 after ship­ping more than 1,000 jobs over­seas, and the build­ing had sat unused since then — save for when direc­tor Christo­pher Nolan blew up part of the fac­to­ry for a scene in the 2008 Bat­man movie Dark Knight, a usage that car­ried a painful sym­bol­ism for res­i­dents watch­ing their neigh­bor­hood decline.

But com­mu­ni­ty activists want­ed the site for anoth­er pur­pose. The city had closed Austin High School in 2007, leav­ing the neigh­bor­hood with­out a tra­di­tion­al pub­lic high school that could serve some 3,000 stu­dents in the neigh­bor­hood. Angry that their chil­dren now had to trav­el to oth­er neigh­bor­hoods, the Austin Com­mu­ni­ty Edu­ca­tion Net­work began draft­ing plans for a new, state-of-the art high school with a green tech­nol­o­gy cen­ter and ath­let­ic facil­i­ties. Edu­ca­tion activists iden­ti­fied the 30-acre can­dy fac­to­ry lot as an ide­al site for the new school cam­pus – far supe­ri­or to a small­er, less cen­tral loca­tion that CPS was propos­ing for a new neigh­bor­hood school. Exten­sive com­mu­ni­ty plan­ning process­es, with assis­tance from pro bono lawyers and archi­tects, yield­ed a detailed plan that won sup­port from an anony­mous donor, who agreed to pay $5,000 to acquire the land, and State Rep­re­sen­ta­tive LaShawn Ford, who promised to fight for state fund­ing for the project.

We real­ly thought that if we raised the mon­ey, we would have a shot,” says Jacque­line Reed, founder and past pres­i­dent of the West­side Health Author­i­ty, who helped lead ral­lies and del­e­ga­tions to City Hall where neigh­bor­hood res­i­dents tes­ti­fied in sup­port­ing of reserv­ing the land for a new school. It would have pro­mot­ed eco­nom­ic devel­op­ment by bring­ing a lot of mid­dle-class fam­i­lies back to the com­mu­ni­ty, if there were good schools.”

But 28th Ward Alder­man Ed Smith had already backed the ware­house plan — despite the fact that it came with no guar­an­tees of new jobs or local hir­ing. In June 2008, the City Coun­cil vot­ed in favor of award­ing the $10 mil­lion sub­sidy to a devel­op­er that was already build­ing a new Coca-Cola dis­tri­b­u­tion facil­i­ty in the neigh­bor­hood with TIF dollars.

Worse, the plan fal­tered in the midst of the finan­cial cri­sis, and the city even­tu­al­ly ter­mi­nat­ed the agree­ment. The land is still sit­ting there, and our chil­dren still need a school in Austin,” says Reed.

Reed says she sup­ports the idea behind TIF, and her orga­ni­za­tion has had some pos­i­tive expe­ri­ence with the pro­gram. The Austin-based non­prof­it, which offers health, employ­ment and oth­er ser­vices to low-income res­i­dents, received TIF dol­lars to open up a well­ness cen­ter in 2004, which stands less than a mile from the future site of the pub­lic safe­ty train­ing facil­i­ty. But it’s too easy to mis-use [TIF] for pet projects,” says Reed.

Will the new pub­lic-safe­ty train­ing acad­e­my yield a bet­ter income? The project is now in the hands of the Chica­go Infra­struc­ture Trust, the body ded­i­cat­ed to spear­head­ing pri­vate-pub­lic part­ner­ships. Accord­ing to a recent Chica­go Sun-Times inves­ti­ga­tion, the trust has cost tax­pay­ers $5 mil­lion while fail[ing] to raise a dime of pri­vate mon­ey” since Emanuel announced its cre­ation in 2012. Many ques­tions remain, includ­ing how exact­ly the remain­ing costs of the train­ing facil­i­ty will be financed — the infra­struc­ture trust’s doc­u­ments say that the city will tap into its cap­i­tal fund­ing pro­gram, and could also con­sid­er a lease-to-own plan — and whether the facil­i­ty will tru­ly pro­mote eco­nom­ic devel­op­ment in the neighborhood.

Either way, for Reed, there’s an enor­mous oppor­tu­ni­ty cost. I haven’t found one per­son out­side of politi­cians who real­ly think that the police acad­e­my is real­ly a good way for us to improve our com­mu­ni­ty,” she says. Peo­ple feel that we need to have more of an invest­ment for our chil­dren, more oppor­tu­ni­ties and less reliance on police. The police will nev­er be able to solve all our problems.”

This sto­ry was sup­port­ed by the Leonard C. Good­man Cen­ter for Inves­tiga­tive Jour­nal­ism as part of the Nation­al TIF Illu­mi­na­tion Project.

Rebec­ca Burns is an award-win­ning inves­tiga­tive reporter whose work has appeared in The Baf­fler, the Chica­go Read­er, The Inter­cept and oth­er out­lets. She is a con­tribut­ing edi­tor at In These Times. Fol­low her on Twit­ter @rejburns.
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