check, 1 mic check 2.
We're good.
Weeks ago.
Huh. Oh yeah. Yeah, yeah.
That's great. She's
uh, she's a gem.
Justin.
She, um,
She had something lined up so yeah, sounds shaky Waters
initial things you have lined up.
hey which, which which 1 is the
Good morning.
Good morning, Lenny.
Good morning, the meeting of the committee on economic
capital development is called to order. We will now have a
roll call to establish quorum
Ladies and Gentlemen, please note that your present
response will be deemed a. Yes vote. When this quote calls
used as a reference vote for later. Mr. Banagas, please
call the Rogue.
Herman vas president.
Vice chair Mosley.
Alderman laspada.
Alderman Hall.
Alderman Mitchell.
Alderman, Chico.
Alderwoman Lee.
Alderwoman Gutierrez.
Alderman Lopez.
Alderwoman, datis.
Alderwoman Cruise Ruth Cruise.
Alderman, Cardona.
Alderman, wages back.
Alderwoman mitts.
Alderman Napolitano.
Alderman. Reilly
Alderwoman, Mana hoppenworth.
Alderman. We have a quorum. Thank you. Ladies and
gentlemen, we have a quorum. Aldwin Ruth Cruise alderwoman.
Ruth cruise is requested to participate. In today's meeting
remotely under rule. 59, can I get a motion to allow um
Auto woman Ruth Cruise participate remotely
I'll room in Lee makes makes a motion to allow for all the
women Ruth Cruise, participate remotely all those in favor.
Say I I and opposed say nay and the opinion of the charity
guys have it. Um, alderwoman crews are is permitted to
participate remotely today? They will be marked as present
for the, on the Quorum call.
For today's meeting, we have received a few written public
comments. These written comments have been shared in the
ectd committee members via the 1 Drive book, uh, as well as
a, um,
A pamphlet of support letters uh, for the data residency or
let's take a look at your leisure. Uh it's about 50 or so,
um letters there.
Um at this time we will begin the public comment period
public comment is limited to 30 minutes.
Out of respect. Everybody's time. Each speaker is limited
to 3 minutes. I have been informed that
10 have signed up for public comment within the applicable,
provisions of the Sergeant at Arms protocol.
Our first speaker is Sam. Muy of Safe Haven.
Good morning, everybody morning. Well, thank you for
providing the opportunity to give public comment on this
ordinance. Um, my name is Sam Moro. I'm the vice president
of clinical and Social Services with a safe haven
foundation and as a part of my role, I have the opportunity
to work with our Workforce Development Center as safe.
Haven Foundation is located in the North Lawndale
neighborhood and our mission is to restore, hope and
opportunity for persons experiencing homelessness.
Uh, 1 of the reasons why I'm excited about this particular
ordinance. Is it really brings investment back here to
Chicago? It brings investment into our communities and it
is something that data centers need to happen. So, why not
incentivize for them to happen here? When I think about
ordinances like this, it really distinguishes between jobs
and opportunity, uh, jobs are great, right? Uh, but jobs
are just a start, an opportunity is unlimited and an
ordinance like this, that has the potential to bring so
much investment back here into Chicago with good
high-paying roles for our community members that's
opportunity and it's unlimited. So as safe haven foundation
and myself personally as a Chicago in are strongly in
support of this ordinance and uh we hope to see it pass.
Thank you very much.
Thank you, Mr. Moy
Our next speaker is Jenny Richard.
I'm sorry. Is that Jerry, Richard, Jerry ricciardi, Jenny
ricciardi.
No. Okay.
Uh, next speaker is Zoe. Zoe Le
see, this is
the committee on economic capital capital and Technology
development, like I always speak on when it comes to
technology in our communities, when it comes to a lot of
our black kids, our Gamers and we have nothing in our
communities when it comes to that, uh, and uh,
I've been coming out here for the last year and I don't
even see you guys speaking on anything like that, but you
guys are never going to speak on anything like that,
because y'all are worried about taking our properties. Um,
in exchange of affordable housing, which is a racket or
Social services that will be in the black community but
really won't be for the black community. Um,
I'm I have to threaten
Northwestern, uh, hospital about seeing a psychiatrist.
Because they have it. That anybody that is black that has
to deal with any type of mental health issues, they have to
go reach out to Nami and other places when
I can just go to Northwestern especially when I have um
health care but that's going to continue to happen because
again
There's nothing designed for black, Americans, black kids.
We have our our aldermen like such as Walter Bernett who
sells out our black communities, like Cabrini Green. He
just gave that to the Holston Holston, Holston owns all of
Cabrini Green anything else over there? Uh Old Town, all of
that. He's on their payroll. So he's there. He's he's he's
never going to help us uh, or over in there, in that Ward.
And he's been doing that for a long time. And they made him
the vice mayor because this is the black Democratic machine
that will continue to, to, to do this, to our communities.
If we do not break it, which we are breaking it. Like I
said, I technically own the city of Chicago, because I
don't know what in your right Minds thought that shower.
Going to steal my family's property on 79th and Hollister
and give it to a white developer and not compensate us,
which is violation of the Fifth Amendment. So y'all really
do need to understand y'all Constitution, check y'all Deeds
because they are still in our properties. That is our
generational wealth and that's why we are down at the
bottom of the totem pole. So um, so when it comes to
economic, uh, and capital and Technology development, we
need our technology. As you see, there's a surge of the
Indians coming over here. That's taking over our technology
jobs and they're watering them down technology jobs, you
can be a hundred thousand 15200 thousand dollars a year.
Now, they're going down to 40 and 50 thousand dollars a
year because they're all coming over here now,
We are in a race of emergency.
And y'all really need to start researching and seeing that.
The Democratic party is not for us.
Thank you. Zoe.
Our next speaker is Tuan Sims.
Uh, please let the record reflect that older woman
chairwoman mitts as well as Alderman. Reilly have joined
the committee meeting for purposes of quorum.
Um this week we well the city the committee had a meeting
on shot spotter, that's part of the technology department.
I'm supposing.
if it's more than just technology for us like Americans in
Chicago,
And I'm not speaking from some talking point either. I'm
not supporting Larry Snelling because he a black man I'm
supporting this, um, technology I suppose.
because in our case,
There's no other way for us to get like really sharp and
um, comprehensive um, policing in a lot of places.
So we left the bleed out in a lot of places gunned down
shot up for the whatever reason. Maybe it's because 1 of
our ultimate. This was in his words he said um that we
should be a technology driven that we should allow for AI
to run city government.
And then once they make the, once it makes a decision, we
should go ahead and development.
Wow.
So, we elected you all to think, or at least to be a think
tank for us to support us when we need each other, when
circumstances situations. But instead, you rather defer it
to AI,
We?
hit, but we hit when on september 22nd y'all supposed and
y'all gonna take shots by out to leave our children in the
dark, to leave our younger dose in the dark, to leave our
communities in the dark,
Without the unnecessary technology. This is what I'm to
save lives.
Or Aid in Saving Lives.
Because y'all are lying for our Public Safety and black
American communities to enroll so so much that we lose
countless lives every weekend. Read the headlines. What was
the headlines this weekend?
But hey, we not accounted for.
Economically. Y'all know what we can get into the argument
a billion dollars. The shortfalls the programs that's going
to be cut off all? We're going to take the hits. These
going to come out of Rose land, Austin Englewood. We're
going to take the hits and this was publicly said to the
news to the to to the media that they're going to. We're
going to have to take these. We're going to have to because
y'all going to scramble to try to um, recover this
shortfall. And you know what, a scrambling going to start
at and black communities. What we already economically
disparaged? What we already? Economically cut off at the
knees.
Forget the needs. We ain't even got legs to support
ourselves and y'all going to try to hit us again. Property
taxes, take homes.
so I'm just saying y'all, this is what we've been dealing
in sitting in this room listening to these people say,
there's not going to be a property tax raised. This area of
expenditure is not going to get hit and the whole time.
They paying out 70 million dollars to what they call the
newer rival initiative.
That's our replacement.
This is our replacement jobs resources. Everything poured
into some people who have not contributed anything but
black Americans have
Thank you, Mr. Sims
Our next speaker is uh, Miss Jessica Jackson.
Good morning, morning morning. So we're here about
committee on economic capital and Technology development.
My concern is is to make sure that through all this change
and that's going on all the decisions ordinances that being
made.
That black people get our jobs.
That our jobs are protected.
I'm not talking about black and brown, we're not going to
deal because Brown is getting there. So let's be crystal
crystal clear.
Brown is getting theirs and then some and everybody else is
all the way to the tune of the city being a billion
dollars. Overdrawn
after going through a 16.4 billion dollar budget.
For which no line items was for the development of the
south side and West Side communities.
Because when you say things like undeserved communities,
I'mma say my comment for the next meeting when you have
time to listen, because you're the chair.
and I sit in here and I listen to I look at the Hispanics
Alderman and the people that Lobby for them or whatever,
they get the 100% attention.
So I'mma come back at the next meeting.
and I deal with what I got to say then because I don't
appreciate
You not paying attention to me when I'm talking and I spent
my money to come down here and spent my carfare to get down
here to address the public servant about my community. And
the concerns that I have for black people to get jobs.
and I'm sorry that it's not a concern to you and your
people but it's a big concern to me and mine
Because we out here suffering, we out here being cut, we
out here, getting a blunt stick of this thing. That ain't
making no kind of sense to the city of Chicago at all
except for being a great, big old debt.
That got the city and the country looking like 1 piece of
junk.
So when you decide that are see, there you go again.
There you go, again.
That's why y'all don't support that junk. You see how they
play us? You see that?
Look at that.
Thank you. Miss Jackson.
Our next speaker is Igor gabal.
Okay.
Next speaker. Um, Brad tits.
Good morning members of the committee. My name is Brad t v
government relations and strategy with the Chicago land
Chamber of Commerce on behalf of our diverse membership
which includes many data center companies. We once again,
urge the committee to oppose the data residency ordinance.
Today, I mentioned at the last committee meeting in July
that, in recent years, the Chicago land region has become a
national and Global Hub for data centers. Which not only
means that that we have the digital backbone for our modern
economy right here in Chicago land, but has led to billions
of dollars of investment in our local communities
significant property, tax revenues generated, and thousands
of union jobs, put to work but is also true that most of
the data center development has occurred in the Chicago
suburbs. And that's for a number of reasons, including land
and infrastructure constraints in the city. Proper to that,
we have appreciated the sponsor's desire to attract their
data center to Chicago, as an economic development
opportunity. Particularly for Chicago, South and West
sides. And as a way to grow our tax base especially as we
Face years of Billion Dollar Plus budget gaps moving
forward.
Unfortunately the ordinary actual ordinance that's getting
lost in this entire discussion. The actual ordinance before
you will neither attract projects or grow our tax base but
instead will put a big red X on Chicago for data center
projects, moving forward while creating a chaos through the
city's procurement process, there is a reason. The data
center Coalition, the industry's national trade group is
supposed to the ordinance, the industry does not want this.
There's also a reason that Johnson Administration has
strongly opposed the ordinance. Until recently, the
ordinance creates a first in the nation.
An unworkable and unenforceable requirement on data stores
to store all of their City vendors, customers data, in
Chicago and Illinois. It's not the vendor. That is on the
hook to handle and store the data that responsibility falls
on data stores and Cloud providers, and therein lies the
problem.
data residency is a fundamentally flawed and Antiquated
concept particularly for a jurisdiction as small as a city
that contradicts modern best data practices. And has again,
not been tried in any other state or city in the country
enacting. This ordinance will mean increase costs on City
vendors and thus the city at a time, the city faces an FY,
25 982 million budget Gap. As it does not leverage, the
hyperscale economies of scale. It will lead to decreased
cyber security protections as most Cloud breaches Target,
the weakest link which is often the on-site premise and it
reduces efficiency security and Innovation by localizing
data outside of hyperscale cloud computing regions. As I
urge this Committee in July, please ask how this ordinance
will work in practice, and who and which city contracts
will this ordinance. Apply to again, good luck. Getting a
straight answer the chamber and the National Data Center
Coalition offered the sponsor of proponents 8, different
policy recommendations in June that would actually generate
data center interest in Chicago, from in signups for
minority-owned data centers in the hiring of graduates from
the new data center program at the city colleges of
Chicago.
To zoning and permitting reforms, thus far, our attempts to
work together have been rejected in favor of this just
weird ordinance. We urge you to oppose this unworkable
ordinance that no 1 except 1 company wants and work with us
in the industry to enact meaningful and proven ways to
attract data centers to Chicago. Thank you for your time.
Thank you, Mr. Tits. Our next speaker is Iana Simba.
Uh, good morning, members of the committee and chairman
viegas. My name is Ayanna Simba, and I'm the city programs
director at the Illinois. Environmental Council, we
represent over 100 different environmental organizations
across the state including many here in the city of
Chicago. And many of my folks, many of my, our partners
including folks that are part of the southeast
environmental task force and other organizations that do
and live work. Do work here in Chicago, we are very
concerned with the data center, the data residency
ensure a substantial amount of the city's data is stored
within the Chicago city limits. We believe it's still does
not thoroughly account for the environmental impacts of
expanding data centers here in the city.
Why we appreciate the creation of an inter agency,
environmental working group? We need policy change. Now not
a year from now.
Specifically at minimum data center should adhere to the
following requirements, mandatory energy, and water water,
efficiency forecasting, annual water and energy usage
reporting.
Energy and water efficiency standards for new construction.
Acquire, an offset, all energy usage by 100% renewable
energy. And finally require participation in demand
response programs to reduce Peak load stress and align with
renewable energy production. We again urge the committee to
oppose the ordinance. And we asked the automated Vehicles
work collaboratively with the environmental groups
Community Based, organizations and other stakeholders to
ensure that we are storing data in a way that is not only
cost-effective but is also not on harmful to our
environment and those already overburdened by
Uh, climate change and environmental impacts. Thank you for
your time.
Thank you, Mr. Simba
Our next speaker is Keith Allen.
Good morning.
I first want to say that, um,
I am representing Pastor John herel. I am with black men
United. My name is Keith Allen again. Um, we are here to
represent and to support this initiative. Um, we believe
that Metro Edge, Craig Huffman, our inspirational, um, what
they're doing with this, what he's doing? As the only
African-American
Um, brother doing this data center work, we appreciate that.
And we know that these data center, uh, residency
ordinances would bring more jobs and that's what we want.
More jobs.
And it will create more Revenue. We need more Revenue,
definitely, because we are facing a budget deficit. So,
we have come here today to be heard and um we want to make
sure that you all understand that black men United supports
this initiative and we know that new developments like this
are essential and we know that we can increase or we can
lower the tax burden, on residents, small businesses and
working people. It's not their job to close these gaps. So
we ask that this ordinance be passed. Thank you much,
Thank you, Mr. Allen
Our next speaker is Craig Hoffman.
Good morning.
Uh, I wasn't here last time but I know some people kept
putting my name in their mouth. My name is Craig Huffman. I
am the CEO of Metro Edge development Partners. The only
African-American developing a data center in the city in
the state and potentially the country I'm here today, I was
born and raised in the City, southside of Chicago. Both my
parents are
Educators, right? 91st in Oglesby, I successfully went on
built a real estate business sold the business took the
game identified investors from my last business and now I
have a site that will be 300 million of investment at 15th
and Damen on the near West Side. Why is that important?
Because people that look like me are not in this data
center game.
The chamber represents a new voice that's carrying an old
message. How many of the alderman here? Remember, 25 and 5.
25 and 5 is essential. It has facilitated African-American
Latino Asian businesses. The others that groups like The
Chamber have excluded right have given them opportunity to
be at the table. My father used to say if you're not at the
table, you're on the menu.
Well, listen to me people. This is an opportunity to
generate revenue and generate greater diversity in an
industry. That is not now a couple facts. I want to
highlight
25 and 5 was fought legally.
25 and 5 just said, look, we want folks that don't look
like The Usual Suspects to have a chance to be at the
table. That's 1 part. We also know that this ordinance
could generate up to 13 million. I'm gonna repeat that 13
million dollars per new data center. The city is facing
nearly a billion dollar budget deficit. This opportunity is
to get more people that look like me look like others to be
be at the table. So I encourage you to support this today,
not because of lies, and I will say the chamber. Gave a lot
of lies today, but because we need facts to get out of the
deficit we're facing for this year, but also for the next
fiscal year and the year after that, because the, the
citizens of this city are barely making ends meet many of
them. And so, what we need is not to default to property
taxes and pushing the pain to them, but to push for new
Ideas that will generate Revenue to relax, the burden on
the residents of Chicago. I encourage you enthusiastically
to support data residency because we are on the right side
of History.
Thank you. Thank you, Mr.
Our next speaker is Dr. Feliz Binion.
Good morning.
I am also here to piggyback on what Mr. Hoffman said
because as we are facing a billion dollar deficit, we
cannot take it off the backs of the taxpayers. I know some
people whose taxes have mortgage has gone up 1100 per month
because of the tax burden that are already going on now.
And so I beseech you you know, I have been fighting this
fight about taxes, we have to think out of the box on other
strains of Revenue, other income coming in other ways and
this is another way to bring in income. We had over a
billion dollars billion piece people's information. Uh,
Hacked.
Uh, last week somewhere in in uh California. And so now, if
we can kind of have some of the information of ours here
what we have there some accountability we know where it's
at. We have an idea of something is going on where we can
go to and say, hey, you know what, what is happening with
our information in this place here? In regards to security,
it will be secure, it will be uh, economically friendly for
the community as well as it is. Also in
Regards to the environment. I'm sure all of the rules and
regulations will be followed.
I'm sure that it will be secure and it will be a plus for
our youth, our youth who are already technology Savvy and
they don't have to go and have a 4 year degree to make 167
thousand dollars a year.
So wouldn't you like to do that, like everybody else? Is
that a part of the American dream? We want the American
dream like everyone else. We want our youth to have the
American dream like everybody else. So if we want to do
that then we have to start making changes. We have to start
implementing programs implementing different things in
Chicago in the state of Illinois that's going to bring
changes for our youth. We've got it's time out for saying,
oh, you know, uh, we're going to pass it. The can on down
the line. You know what, we feel. So sorry, we'll give you
a little Social Services. We'll give you a little bread.
We'll give you a little cheese and tell the next, uh,
elected officials come in know, the change is. Now, the
Cavalry is here, we're the change. We've got a big changes
in how we do things. We've got to open up things so that it
is, everybody can have a piece of the pie and everybody can
have the American dream, a home. If you want 3, kids have
4, if you want the dog or the cat and I'm asking you today
and beseeching you,
Allow this to take place, allow this to happen so that it
can so that dreams can come true. What I used and I and our
communities where people can stay in their homes and not
make a choice between mortgage or food. Thank you.
Thank thank you, Dr. Dr. Bennion, our next speaker is Ross.
L Lickton house.
Close enough. Thank you, I'm inspired by that last speaker.
Um, my name is Ross, Lipkin house. Uh, I'm the founder and
partner of Cavalry real estate advisors. I've spent the
last 20 years working in the DC area uh in state and local
Tax Matters, working specifically with the data center
Industries. And what I'm here
to do today is to support this particular ordinance for the
plain and simple fact that when it comes to Data Centers,
Centers, there's simply no greater output of direct local
revenue of any real estate, kind of any asset type anywhere
on planet Earth. So when you hear folks talking about
bringing tax dollars to Chicago,
This is a way to do that plain and clear. Unequivocally,
what I find interesting is that there have been some
comments about how this particular ordinance or at least
the concept of data. Residency is considered Antiquated.
That is simply not true. If anything the United States is
behind
Other Western countries, other locales as it relates to Data
Center, residency.
Requirements. Also more importantly, I have read this
ordinance closely.
This is not a Prohibition, this is an incentive, but this
an incentive that doesn't cost anyone a dollar. It is an
incentive to encourage storing, processing data inside a
Chicago city limits in Chicago, in particular based on my
experience. And what I don't know about the market.
Is that a Confluence of market conditions? That doesn't put
an x on Chicago, it makes Chicago more attractive. You got
6 nuclear power plants in Illinois data, centers are
chasing. Power comet is a net exporter of power data
centers will follow power. But the question is whether or
not Chicago is going to get their piece of the pie.
We see it in the suburbs Chicago, it's not happening each 1
of these buildings as Mr. Huffman had mentioned can
generate up to 13 million dollars in net positive, fiscal
Revenue, without costing the city much at all. It's about a
15 to 1 return ratio on these data centers where other
types of real estate development are about 3 to 1. This is
a fiscal Powerhouse and I know this not only because I've
spent my career working in this industry but I have also
served as a local elected official in Northern Virginia,
which is the epicenter for data center development. Now
Alderman, vagus you mentioned in your press conference.
This 100 million to 1 billion dollar tax revenue, in
Loudoun County, which is next door to me, the interesting
component of that. The data point that he missed no fault
of his own, is that the entire budget for that county is 3
billion?
Billion dollars. That means that less than 9% of the
developable land in Loudoun, County occupied by data
centers produces, a third of their total operating budget.
That was a local elected official. There are very few
silver bullets that saw fiscal problems. And when you've
got a 1 billion dollar budget deficit and hiring freezes,
I'm telling you right now data centers, are that silver
bullet? And this residency ordinance will incentivize more
data center development here in Chicago so Chicago can get
its piece of the pie. Thank you.
Thank you, Mr. Mr, House. I'd like to also recognize
Alderman, Hall, and Alderman Mitchell for the purposes of
quorum.
Our last speaker is Lawrence Lewis.
Thank you. Thank you.
I had some prepared statements, but I actually feel like I
need to debunk a couple of things that were said before.
Uh, starting with the Chicago land Chamber of Commerce. Uh,
my background is actually I did a center of developer. I
worked at Microsoft and was involved in led the efforts to
acquire and develop data centers and Lease data centers.
And Chicago was 1 of my markets. Uh, I can tell you that
all the development is going to the suburbs
but a couple things that he said that are just plainly, not
true,
Uh, he said that other states and countries don't have laws
or ordinances like that like this not true.
Data. Sovereignty is a very well-known concept and it's
required throughout Europe. It's required in the United
States. It's required in Canada.
Other states have laws on the books where their data, or a
significant chunk of it has to reside in the state, so
that's just plainly wrong. He also said, it's outside of
the cloud regions to be inside the city.
There are multiple Cloud on-ramps which are actual
facilities where data goes onto the various Cloud platforms
of a Microsoft, and Amazon web services, at Google.
Right here in the city. 350. Surmac 427 South LaSalle I
could go on. So that's just plainly, not true.
Environment, the Illinois Environmental Council just to
address some of the concerns that were raised.
The tenants that would be Leasing.
Data centers in Chicago already require most, if not
everything that they said that they're looking for. So let
the market dictate that. Let's not come up with laws or try
to prevent good laws or incentives for data centers to
locate here.
So while I was in that role at Microsoft, I was the Chicago
Community lead to ensure that there was Workforce
Development around the data centers that are being
developed here. I can tell you firsthand that the number of
jobs and the multiplier effect of these data centers on
other jobs in Industries related to the data center are
significant. These are excellent jobs well-paying. They
don't require 4 year degrees or even 2 year degrees in some
instances and are things that are jobs that Chicago needs
last but not least, is
Shop local.
Uh all the data center development that's going to the
suburbs is because that's where there's a lot of land.
Well, there's a certain type of data center that requires a
lot of land, but there's other types of data centers and
smaller data, centers that can be done here.
and if there is an issue about resources, being, you know,
exploited,
Then that's something that calmed would address and we're
not hearing that. From comet. In fact ComEd is a major
backer of this project. Thank you. Thank you Mr. Lewis.
That concludes the public comment portion of our meeting.
Uh, the first order of business is approval of July 2024,
monthly report, which all members of the committee should
have received. Are there any questions or comments from the
committee members regarding the report?
All right. Um Alderman Reilly makes the motion to uh pass
the July 24th 2024, monthly report by the same role because
that was applied to the term for any hearing no objections.
So ordered
Um, the chair recognizes Alderman. Ray Lopez.
Thank you chairman. If we met, uh, before we get to the uh,
the rest of this.
The rest of this meeting if we could take a moment of
silence and observance of what today is september 11th, and
the 3,000 lives lost today. 23 years ago,
Thank you for that.
Thank you Alderman Lopez.
Lopez any other further comments?
Thank you.
Okay, at this time we will move out of order to item number
11 on the agenda at the request of the applicant, this item
will be deferred at this time. Can I have a motion to defer
the item of the same role call that was applied to
determine quorum?
Alderman, Chico so moves here, you know, Jackson so ordered
Items 1 through 8 on the agenda are a series of
appointments and reappointment severe special service
areas. The following individuals are being considered
before the committee, the reappointment of Lourdes antino
Ramirez, is a member of the special service area. Number 5,
Commercial Avenue commission located in the 7th and 10th
and 10th.
Um, 6 Corners commission, located in the 45th Ward
appointment of Richard Buckwalter, as a member of the
special service area. 28-24 6 Corners commission, located
in the 45th. Ward,
Appointment of Daniel ale as a member of the special service
area. Number 28-24, 6 Corner commission, located in the
45th Ward, and the appointment of Brandy and El mafala,
Malual Tatiana shavonte as a member of the special service
area number 54, Sheridan, Road Avenue commission located in
the 49th Ward at this time, Mark, Roshan the assistant,
commissioner of the Department of planning and development
is to answer any questions.
Are there any questions from the members of the committee?
Seeing none the ectd team has confirmed the support or
non-objection from the following council members with
appointments and re-appointments within their respective,
Wards alderwoman, clay Alderman, Chico Alderman, Gardner
alderwoman Haden Alderman, Lawson and Alderman Mitchell.
At, at this time, with any of the members of the committee
or Council like to make statement, or ask any questions
seeing no questions.
Alderman Lopez makes a motion to record an approval of the
appointment to reappoint by the same role. Call that was
applied to determine Quorum hearing no objection. So,
ordered the due pass recommendation of the appointments and
re appointments will be reported out the next city council
meeting appointees, congratulations on your confirmation
and partnership with the city of Chicago. We look forward
to working with you.
Okay, so at this time, we're going to return to our regular
agenda order and consider agenda item number 9, which is an
ordinance calling for an amendment to Municipal Code
chapter. 2-45 regarding favorable tax incentives. We have a
substitute or ordinance that members should have received
electronically and also a hard copy this morning, can I
have a motion to accept the substitute ordinance?
Alderman, Cardona makes the motion to accept these
substitute here. No objection. So ordered substitute
ordinance has been accepted William. Jeff. William Jeffrey
is the managing. Deputy Commissioner of the Department of
Planning and Development will speak on. The ordinance is
available to answer any questions, Mr. Jeffries.
Thank you. Good morning, chair members of the committee on
economic capital and Technology development. And for the
record, my name is Tim Jeffries managing, Deputy
Commissioner in the department of Planning and Development.
Uh, I'm here to request your approval of an amendment of
the municipal code in order to modify the existing
requirements for projects, requesting city council approval
of certain property tax abatement programs.
uh, specifically section 2451160 of the code was originally
approved in 2020 and requires applicants for these certain
property, tax incentives to enter into a Redevelopment
agreement or RDA with the city and submit an annual
compliance report each year. Uh, this effort was approved
under the leadership of Cher, vagus, and developed in
coordination with
Dpd, uh, it has been successful in increasing both
accountability and transparency around these programs. That
was otherwise, generally absent.
uh that said dpd is seeking an amendment to modify 2
specific elements uh that if approved would apply the RDA
uh requirement to a new program, a new property tax
abatement program as well as clarify language regarding
which specific projects are subject to the requirement to
submit an annual report.
Uh, addressing those points in Greater detail. Uh, the
change would extend the RDA, requirement to the County's
newly created class 7D program. Uh, this program provides
the same basic benefits as the class 6B or Class 7 programs
but is specifically targeted at grocery stores operating in
communities identified by the US Department of Agriculture
as having limited access to fresh fresh and healthy food.
Since this program is new the code does not contemplate or
require that class 70 projects have an RDA. This amendment
would establish that requirement in advance of the first
class 7D project to be reviewed by city council that is
item 13 on today's agenda.
uh, the second change would modify the code to make it
that annual reports are not required for projects that are
that are not subject to the RDA requirement currently the
code states that the reports must be submitted for any
approved project. However, the intent of the ordinance was
to have these annual reports submitted uh in order to
demonstrate ongoing compliance pursuant to that project's.
RDA, uh, for projects without an RDA dpd and lacks an
enforcement mechanism to address non-compliance. With this
requirement, this
would create an operational concern for both dpd and and
developers around an issue. That, as I said earlier, was
not the intent of the ordinance to address this, the
amendment simply clarifies. That reporting requirements are
associated with projects that have rdas.
Uh, overall dpd is supportive of the proposed amendment
since it builds on the overall success and purposes to
create transparency and accountability around these
programs while also making this operational Improvement.
And for that reason, I request the committee's favorable
consideration of this item and I'm happy to answer any
questions you might have.
Thank you. Uh Mr. Jeffries, uh, before we at go for
questions, I'll Alderman MOS. Vice chair Mosley, has
requested to participate in today's meeting. Remotely on
the rule, 59 can I, can I get a motion to allow him to
participate? Remotely Alderman, laspata motion to allow
Vice chair, Mosley to participate remotely all those in
favor. Say I
Any opposed say nay in the opinion of the chair that I have
it. Uh, Vice chair Mosley, is permitted to participate
remotely today and he will be marked present for the core.
Um, I did want to, um, first state that, uh, it was
actually, uh, Vice chair at the time. Mitchell and myself
worked on the ordinance and appreciate, uh, continuing to
evolve. We have Alderman laspata, and then Alderman
Mitchell.
Hey thank you so much. Dear uh I just wanted to ask maybe
we're actually can talk about this item. Uh 13. Do you want
to summarize? How a further, how class 7D functions are we
going to get to that later in the meeting? Uh, Aaron will
describe it a little bit, but it's the same basic tax
abatement. Roughly 60%, uh, decrease in your taxes over,
uh, 12 years. Uh, but the projects must be in a census
tract. That is designated by the USDA as as a food desert
you know that has lack of access to health and fresh. So
the moving from like 25% equalizes test value to 10%.
Exactly got it. Thank you sir. Thank you sir. Thank you
automatic. Any other questions from members of Alderman?
Ray Lopez?
Thank you, chairman and good morning members of the
committee. I just wanted to ask excuse me. Um, since the
provision the reporting Provisions have been entered
How many individuals have reported and how many have not
met their obligations? Uh, right now we're in the process
of uh,
Finalizing this year's report, we have 19 projects that
will be reporting on. We have all of those in hand. So uh,
By that all of the 19 that we have this year appear to be
in compliance, but some of them are still going through the
process. 19 is not how many have been approved, but they
need to complete the project basically, in order to be
completed,
And this is what was last year's.
Oh yeah.
Over the previous year. So what was the year before that?
Uh, I don't have that data in front of me, but we didn't
have any in out of compliance last year. Have we had any
that are out of compliance? Not to date. And for all of our
reminder, what is the
Outcome of being and not in compliance. Uh, non-comp if we
had a non-compliant project 1 of 2 things could happen.
The, we the, the applicant could voluntarily withdraw, um,
from the, like inform the assessor that they want, like the
voluntarily withdraw from the tax abatement program or uh,
if they were unwilling to do that dpd would bring, um
revocation language back to this body for approval, asking
the county to revoke the incentive because of
non-compliance
20 plus years ago, the city of Chicago used to have
language in many of its dealings that dealt specifically
with failure to comply especially when it came with like
land and other issues. Are there any thoughts of including
that as an automatic inclusion in ordinances? So that we
don't have to rely on on a department or someone catching
that?
Um, we have like automatically triggered failure to reply
and to failure to report and yes. Uh, we do have those in
our current rdas for things, like Tiff or nof or even land
sales as you said. Um, this 1 is just different because
it's a county program that has ministered through the city.
So the city
The city is when we have when you will see this item in
front of you City council's, action is to make a
recommendation that the county approve. It, it's ultimately
the county that that controls the the levers on it. So we
don't have the ability to actually revocate as a city. We
have to just recommend to the county that they take that
action, but our resolution is required for them to receive
it. Correct? Correct. So I guess the question is, I think
it's like referred to as a reverter clause, are there ways
that you could incorporate a, a reverter in a resolution
for failure to comply?
We've talked a lot about it. That would be, I mean,
obviously for us, and my staff having to, you know,
introduce the second resolution to revoke when you've
already authorized. And you've already laid out the terms
in the RDA, that is approved by council's, not ideal, but
there's just a legal hurdle, I think with it, but I will
take it back with law and raise it again. Chairman, I would
love if we could have through the chair, what the legal
opinion is on that type of reverter and what the hurdle is.
Because I don't see how having that incorporated in the
language. Um,
Would be a great hurdle. If the expectation is set, as we
would do any kind of local agreement in that manner. Thank
you.
Mr. Chair. If you can provide that information through the
chair.
Any other questions from members of the committee?
Thank you, Mr. Jeffries. Uh,
may I have a motion to approve. The substitute ordinance.
All those in favor. Say, I
All those opposed say nay and the opinion of the chair of
the eyes have to do. Press do pass, recommendation will be
reported out the next city council meeting.
Thank you. Next, we have a agenda item number 10, which is
an ordinance to approve the issuance of a Class 6 B, tax
incentive for a property at 71474. West Harbor Street in
the First Ward and twinette, Maxwell, financial planning,
analyst, for the Department of planning and development is
here to present in support of the item and will be
available to answer any questions. But before I do that, I
do want to recognize also not for purposes of Quorum, but
for attendance, uh, Vice uh, mayor Bernett.
Please proceed to enter it. Thank you. Good morning. Thank
you morning, chairman members of the committee of economic
capital and Technology development for the record. My name
is Antoine and Maxwell. I'm a financial planning analyst in
the department of Planning and Development. I believe I am
also joined today by uh the legal representation for 1474
West Hubbert uh Zack.
Characters. Okay, he's here. Thank you as well as the uh,
developer Jennifer
Thank you.
So today, I'm here to request the approval of an ordinance
supporting a class, 6B, initial property tax, incentive for
IGS HQ, LLC, and IGS proposals to renovate. The property
located, at 1474 West Hubbert,
Again, the project is located, at 1474 West Hubert Street.
It is in the First Ward with um, older person. Daniel
laspada. Supports have provided a letter of support as
well. And this is the West Town community area and the west
region.
This slide is the area view of the neighborhood contacts.
You can see the building is located. Um located in the
Kenzie industrial Corridor and the property is a small
square, a long coverage Street.
The next few slides are. Uh, if you pictures, I'm showing
the inside of the the building. This is the first floor of
the current uh conditions with some minor Renovations that
the developer has completed.
Uh, this is the second floor.
Of the property.
Okay. And as you can see, the floors, uh, does indicate
that there are, you know, in need of repairs and currently
not habitable. However, the excuse me, the, uh, property
tax incentive purposes is to help renovate these areas.
So, the property the project overview, this is, uh, the
applicant is Ishq and they proposed to renovate the
property located, um, here and for their, its industrial
use, which consists of the assembly, warehousing and
distribution of the interior and exterior, landscape and
holiday Decor, the property site is approximately 7,500
square feet. It's an industrial building built in 1908, uh,
the building itself is approximately 13500 square feet.
And, uh, the renovations will include the Complete Masonry
work bathrooms, Ada, accessibility service to the HVAC
updates to the electrical new LED lighting, new doors and
windows would staircase Landscaping, garage, and interior
and exterior, paint.
Uh I understand that the developer has moved from a a space
that they were releasing. A 2000 was fullton.
Again this is a initial request for class 6B uh tax
incentive. The estimated tax savings is roughly 10 2000.
And on a nest present value it's roughly 76,000, the total
project costs is 29000 for the renovations and the purchase
price for this property for the developer was 1.75 million,
The developer has completed the minor Renovations uh, to
date of approximately 38,000,
Expect for the completion of the renovations to be final in
January of 2026.
okay, so the project budget of 2 million 2,040 thousand,
includes the purchase price of the 1.75 million, heart
costs of 265,000 and soft, costs of 25,000 expected to be
funded with, uh, some the developers Equity loans and, uh,
small Grant of 138 thousand.
the tax analyst analysis, impact to your does reflect that
the
it reflects the tax savings over 12 year period of roughly
102,000. And the city's portion of that is approximately 24
24,000
so dpd's uh recommendation, we are in support of this
project. The developers purchased the project purchased the
property for 1.75 million and plans to invest approximately
300,000 in the Kenzie and Industrial Corridor, the West
Town community area. The project expires to create 2 to 3,
full-time jobs, and 20 to 22 seasonal jobs up from its
average 14, seasonal jobs and the. Again the applicant will
save approximately 102000 with the incentive over the 12
year period and the city also benefits from not having a
another large vacant industrial building
and thank you very much. I your favor consideration for
this request, I can take any questions as well as the
development team. Thank you. Thank you, thank you, Miss
Maxwell. Miss Maxwell is joined by the development team.
Uh, for any questions, Alderman, L spot has provided a
letter of support for this item, uh, alderman laspada,
Thank you very much, chairman. I'm I'm really
Proud of this development in part because the wonderful
things that it says about the Kinsey industrial quarter. I
think it was 5 years ago, we were looking at data that
sometimes says that industry and Manufacturing doesn't work
in the city and certainly doesn't work along Kinsey and
Time After Time After Time, people are proving that
narrative wrong and it, it takes creativity, it takes
programs like 6B. I I love seeing y'all take advantage of
the spiff program as well, but there's value in these
buildings. There's a comparative value for industry and
Manufacturing being in Chicago, being closed, even to
high-income communities. Like, what what town is now as we
both know, um, and I'm really proud of what's Happening
here today and I do, uh, ask my colleagues favorable
consideration. Thank you, thank you. Al, any other
questions from members of the committee?
Seeing none, may I have a motion to recommend to pass it.
This item by the same role call that was that was applied
to establish Quorum alderwoman. Uh,
Mana hoppenworth uh so moves hearing no objections. So
ordered the do pass recommendation will be will be reported
out the next city council meeting.
Item 12 on the agenda is a direct introduction. Ordinance to
approve the issuance of a Class C tax incentive for
property at 2512 West West 24th Place in the 25th Ward.
Robert bumpers financial planning analyst for the
Department of planning and development is here to present
in support of the item will be available to answer any
questions.
We also have members of the development team available to
answer any questions. Mr. Bumpers. Uh, please begin the
presentation when you're ready.
Morning chairman vagus and members of the econ economic
committee for the recommend. My name is Robert bumpers
financial planning analyst for the Department of Planning
and Development. I'm here today to request your approval of
a Class C property tax incentive for 2512 West 24th, LLC
The property is located 2512 West 24th Street within the
South Lawndale community area in the 25th Ward. So the West
planning region and Alderman, citro Lopez supports the
incentive.
There's a location. This is Vaughn 24th Street. Um,
there's a property in its current condition. Uh, the
property has no land with it is completely. Uh, housed with
the building.
Uh, this is the current condition of the interior of the
building.
Uh, 2512 + 24, LLC purchase property located, at 2512 West
24th Street in March of 202145000000 the subject property.
Is a 56500 square foot industrial site that was previously
housed, uh, roller and Manufacturing from 1923 to 1990 and
wrote a dine from 1990 to 2021 upon purchase of the
property. The applicant began the process that was
abandoned by the prior owners of remediating, the
contamination of the property Pioneer, engineering and
environmental services conducted site, remediation services
at expense to the applicant, Pioneer remediated the
property and the Illinois Environmental Protection Agency
issued a no further remediation letter.
uh, from the IPA on september 25th 2023 for the Capital
Improvements will include new energy, efficient lighting,
Windows offices. And restrooms also upgrades to the freight
elevator and sprinkler system. Total project costs are
8813306 with sources being from complete equity.
The estimated abatement to the applicant is approximately
4230 dollars with net present value of 3004000. The city
share is roughly 98,000 with an npv of roughly 73,000. The
uh, Tennant company Romo. Mattress was able to retain all
their jobs, during remediation. 10 jobs were created
developers invested, over hundred thousand dollars in the
remediation.
Uh, I can take any questions. Thank you.
Thank you, Mr. Bumpers, uh Alvin C Scholl Lopez has
provided a letter of support for this item. Are there any
questions or comments from members of the committee?
Seeing none, may I have a motion to recommend passive of
this item by the same role call that was applied to the
established Coram.
Moves here, no objection. So ordered to do pass,
recommendation will be reported out at the next city
council meeting. Thank you, Mr. Bumpers, thank you, item 13
on the agenda is an ordinance to approve the issuance of
our first class 7D tax incentive for property at 3250 West,
87th, Street in 18th, Ward Aaron Fogle, financial analyst,
some financial planning analyst for the Department of
Planning, and Development will present in support of the
item will be available to answer any questions.
We also have members of the development team team available
to answer any questions Mr. Fogle. Please begin the
presentation when you're ready.
Good morning, chairman vgas and members of the committee on
economic capital and Technology development, for the
record. My name is Aaron Fogle financial planning analyst,
and the department of planning and development.
I'm also joined by Stephanie dermon from the development
team.
I'm here today to request the approval of an ordinance,
supporting a class 70 property. Tax incentive for 3250 West
87th Street, a project that redeveloped a formerly vacant
property into a grocery store within a USDA, designated
food desert in Ashburn.
This project is the first application for a class 70 tax
incentive. That dpd has received therefore we provide here,
an overview of the program. The 70 program was initiated by
the Cook County Board of Commissioners in October 2022 and
is intended to incur the operation of grocery stores in
areas where it would not be economically feasible. Without
assistance. The property must be located in a food desert
as designated by the Illinois Department of Health, which
in turn, relies on the usda's designation.
In the ordinance, a grocery store is defined.
As a commercial retail business, where the majority of the
public sales floor is occupied by produce food beverage and
household products.
It includes dedicated areas for the sale of meats, Deli,
products, and Fresh Bakery Goods.
And at least 55% of its employee, Workforce is full-time.
The 7D is a 12-year incentive which can be renewed once.
the project site is located at
3250 West, 87th Street, which is in the 18th Ward, the
Ashburn community area, and the Southwest planning region,
Alderman, Curtis provide a letter of support for the
project.
Shown here is an aerial view of the site which is located in
a shopping plaza off of 87th in Kedzie.
As mentioned before, the 7D ordinance states that a project
must be located in a food. Desert designated by the
Illinois, Department of Health, which relies on the usda's
classification, in their food, access research, Atlas
This map from that, Atlas shows the orange, shaded food
desert, and the project site indicated with a red triangle
within it.
The photo of the pre-. Redeveloped exterior, the product
site was formerly an Ultra Foods which closed in 2017 and
had been vacant until the rehabilitation into Pete's Fresh
Market.
And this slide shows the state of the vacancy from the
interior.
So this Project's applicant and site owner is 87th and
Kedzie West LLC. This project redeveloped an 87,000 vacant,
former Ultra Foods into a new Pete's Fresh Market. The
project offers food products and a full service kitchen,
Bakery and Deli and a modern efficient design to Ashburn
residents. Rehabilitation work, included, Remodeling and
improving. Sorry improvements to the layout equipment
Decor, exterior and parking lot.
The applicant is Seeking a class 70 property tax abatement,
which is estimated to provide a benefit of approximately
4.6 million dollars over 12 years or 3.4 million on a Net,
Present Value basis.
The project which cost 15.4 million in total was started.
In May 2022. And completed in January 2024 with the store
opening in May.
In total the project costs, 15.4 million, which was
entirely funded with developer equity.
And included 2.4 million in acquisition costs, 12 million
in hard costs and 1 million in soft costs.
Estimated 12 year, tax savings to the applicant are 4.6
million and estimated net benefit to the taxing districts
over that time are about 260,000.
This translates to 3.4 million and 11010 respectively on a
Net Present Value basis.
Here's a photo of the completed project, showing the new
Pete's Fresh Market, exterior opened in May of this year.
following our analysis, dpd believes the project meets, all
of the requirements of the program and is in support of the
use of a class, 70 incentive, given the substantial
investment of the developer and the creation of 120. New
full-time jobs and 30, new part-time jobs.
In addition, the project will provide an estimated 260, net
benefit to the taxing districts versus leaving the site
under developed.
Thank you for your consideration of this request. I, as
well as members of the development team are happy to answer
any questions. The committee may have
thank you Mr. Fogle. Um,
was there any um mwb participation in this project?
I'll let Stephanie uh, address that point.
Good afternoon both the question. Yeah, the question was,
was there any um, mwbe participation on the construction of
the project? Not that I'm aware of, we didn't call. We
didn't um submit any type of thing. Any type of um records
to the city, it was all funded.
From the developer.
The answer is no.
No, it was all funded with Equity. Uh oh no, this is not
regard, this is not regarding funding but I'm I was asking
around the participation of you know contractors that were
uh doing the the 15 billion dollar fifty million dollar,
bill out.
No.
Alderman, Ray Lopez.
Thank you chairman. And and we have. Who are these
individuals? That's answered.
Um, for the record. Could you identify yourself for the
record? Please? Matthew Welch Council for the applicant.
Suffering ramonas.
So thank you, chairman. And first let me say this, I'm very
very familiar with this location. Um, from the southwest
side and when Ultra Foods left, it was
A devastating hit.
Not just to the 18th Ward, but to many surrounding
neighborhoods from Anglewood, Chicago, lawn you name it.
Um so on 1 hand, I'm glad to see a known ger is staying in
the community. We have
pets all around me. I can't throw a rock without hitting a
pizza Market in my neighborhood.
but at the same time, we see this time and time again, where
people come asking for their taxes to be,
their tax burden to be lightened, will not incorporating
any of the
hiring goals and inclusion for the projects that go on in
our neighborhoods.
We've seen this before.
We're still seeing it. And this is actually part of the
reason that we even had this reporting that you talked,
that we just talked about
That we want our businesses to be able to invest. We want
people to do, bring their opportunities to our community,
and we're willing to help them. But at the same time, they
can't just do it in a bubble after the fact. And then say,
Oh, by the way, I need 5 million dollars.
Off my taxes to cover this.
It's it's insulting to our neighborhoods to hear this. Um,
even as much as I like what they do like their store. Um,
I'm going to have to vote no on this because we cannot keep
going down this path, where we, where, including women
minorities African-Americans, and Latinos is the
afterthought and not the forethought.
This is in the middle.
The heart of an African-American community.
How do we not say that we're going to have them part of
this?
I I I I just have a hard time with that and um, I'll I'll
call Derek later, but I'll would like to be recorded as a
no on this item.
Thank you. Any other questions from?
Members of the committee. Um,
Matt Welch, Matt. Uh, so we were aware of the condition
precedent. We didn't track it. So at this point, I'm
stating. No. Because we don't have records, it wasn't a
condition present to access the program.
And that's why I'm stating know at this time.
Alderman Lopez.
I don't want to go back and forth on this item on this
matter. But I can tell you if you've opened up 6 stores in
Chicago, you know, the expectation of what it means to be
inclusive of hiring minorities in the city of Chicago.
And we have plenty of stores.
Of theirs and others throughout the southwest side.
Making sure that workforces are reflective of communities.
And inclusive of people is not something new in this city.
Thank you, Lopez.
Matt, would you like to respond?
No, just reinstate.
We don't have the information right now because we didn't
track it. We weren't aware of the the
there wasn't a condition precedent to access the program.
Thank you.
um dpd, um, prior to
Mr. Pho prior to application submission of the application
and approval by the department of planning. Did you advise
the applicant of our mwb VB goals within the city of
Chicago?
At the time of application, these class 70s were not
subject to our RDA.
Um, requirement.
Mr. Jeffries not advised.
For the record, Tim Jeffries managing, Deputy Commissioner
and the department of Planning and Development. Uh, I will
just say that for 2 Reasons, this is somewhat different for
the first is that this is the first time we've done this.
And so uh,
This project was Midstream, when the 7D came online. So
this this project was already in development. It was
already in process. I appreciate it. And fully understand
your point. Uh, Alderman Lopez, I guess on a move forward
basis to the extent that projects have uh, are coming in
the 7D and have new construction and development. We intend
intend to to have this requirement in place. This first
project is in an iterative position where they were already
began work, when the program was online and they applied
and it was reviewed. Um, I guess second.
Is that this is the program in general, is slightly
different than all of the other 6, BS and class 7s. Those
are a, a requirement of, uh, eligibility is the
Redevelopment of, uh, property for the 70 specifically,
because it's so specifically targeting, uh, grocery stores,
and food deserts and their businesses that tend to have a 1
to 3% margin of profit, uh, it can function as an
operational subsidy where there is no Redevelopment. That
happens with the project, this project does have it and
when projects do have it in the future, we intend to have
mwbe uh apply to those in the Redevelopment agreement, but
we will be having projects, 47 days, that will have no,
no, minority participation because
there's no development that's occurring. It's just, it's
meant to be an operational. Subsidy for extremely low,
margin businesses in, in, in disinvested communities.
Any other questions from members of the committee?
so, I'll just add that, um,
When we're talking about tax incentives, and we're talking
about providing incentives for companies, especially
companies that have done business with the city like Pete's
Market. We want to make sure that they understand that
there has to be a representation of the city that's
actually performing and working on these projects
especially as we're providing incentives. And I know this
is the first 1 and we just introduced and passed an
ordinance that now captures the 7ds as part of our uh,
reporting, uh, requirements. Um, but I am disappointed
that, um, Pete's who's who's been a staple here in the city
city of Chicago? Uh, is not taking into account and
reflecting the Shoppers that ultimately purchase goods from
their, in their, their stores, by allowing them to, to
participate in the contractual, um, um, contractual and
Rehabilitation of their, of their establishments. So I want
you to take that back to management that, I think the body
is uh, a little, a little
Uh, concerned that, uh, as we're talking about diversity,
that it's not being incorporated into the contraction, the
contractual, uh, contracts. Uh, as part of their
Rehabilitation and part of their seeking incentives and
would like to take like, to take that back to the
management. Um,
Alderman. Curtis has provided a letter of support of this
item.
May I have a motion to recommend patch of this item, by the
same role call that was applied to establish with the uh,
exemption of Alderman. Ray Lopez voting. No.
Uh Alderman uh alderwoman mapper with so moves hearing no
objection. So ordered the do pass recommendation with
Alderman Lopez voting no will be will be reported out the
next city council meeting.
Thank you.
Okay.
Yep. At this time our our last item is an ordinance calling
for an amendment to Municipal Code chapter. 2- 68 by adding
new Sub, sub subsection, I'm sorry, adding new section, 2-
68-50. Requiring city data to be processed or transmitted
and disposed of within the jurisdiction of the United
States. We have a substitute ordinance, that members should
have received an electronically and also have a hard copy
for this morning. Can I have a motion to accept the
substitute ordinance, Alderman, Lopez motion to accept the
substitute hearing no, objections or ordered?
The Substitute ordinance has been accepted.
I want us to be mindful of the current backdrop that we
hold.
As we hold this meeting today. News broke. Last week of the
Cities almost billion dollar deficit this week. A hiring
freeze was announced with the goal of chipping away at some
of this Gap.
Now, the following days, there have been numerous
conversations about what to do.
How to balance the books and generate more Revenue.
What I haven't heard enough is a new idea is that don't
rely on the same old tactics. We've seen time and time
again.
It's imperative us as legislators and city of Chicago to
find ways to move our city forward and not depend on the
old ideas and the old levers of property tax, increase in
fines, increase in fees, and Tif Surplus sweeps.
Data residue ordinance.
The data residency ordinance. You are familiar with by now
is an Innovative solution that will generate revenue for
the city. Also state that the state of Illinois has offered
incentives. And we've seen 3 billion dollars
3 billion dollars of economic activity for data centers.
How much of that has come to Chicago?
I'll tell you less than 15%.
we have the demonstrate that Chicago's open for business,
we're not just competing against
Cities in the state of Illinois. We're also competing
against cities across the country
Data residency is an industry. That is growing quickly,
Across the Nation and our cities. Well poised to benefit
from it. If we put skin in the game, this ordinance was
introduced earlier earlier this year and since then feed
has been feedback, has been shared and we've adjusted the
language accordingly.
and I stated before when I introduced an ordinance, it's my
idea on how to solve an how solve an issue, but I still, I
still got to get folks to support it and as such, I've
heard from my colleagues and have have had folks meet with
my colleagues
To hear their concerns.
From energy concerns to the percent data. Stored in the
city to ordinance, we have today is a summation of
compromise while maintaining the lucrative benefit.
We have something that will really benefit our residents
here and set us up to benefit as emerging Technologies.
Like, artificial intelligence continue to scale.
Joining us today is commissioner Nick lucious from the
Department of technology and Innovation and Patrick call
managing, Deputy procurement officer who represent, who,
who will be president and answer any questions you may have
about the ordinance. I now open the floor for commissioner,
Nick lucious to begin with his presentation.
Course, comments.
Thank you, chairman, good morning, everyone morning. My
name is Nick lucious and I am CIO and commissioner of the
city's Department of technology and innovation.
DTI appreciates that the chairman provided the chance to
adjust the language in the original, um, uh, ordinance that
he proposed. We also really appreciate the Chairman's, um,
commitment to trailer bills, uh, in the future to address
any unforeseen consequences of the languages written.
dti's view of the ordinance is that it is primarily an
economic development policy that uses a procurement
mechanism to achieve its policy goals.
With a potential impact on technology operations.
DTI supports the edits of the ordinance that include a
definition of data.
Um and Grant rulemaking, authority to the CIO, the the, to
my position and to the CPO to make decisions for the city's
best interest.
That includes the authority to Define data center.
Dti's area of expertise related to this ordinance, is the
impact it has on City operations and our ability to
maintain best technology practices. Uh, DTI has spent time
evaluating the potential impact on City operations and as
determined that the edits to the ordinance will allow the
city to maintain best practices for information.
Technology, uh, regarding the other policy goals and
impacts of the ordinance, DTI defers to the other
departments. With these changes, DTI is neutral on this
measure and that concludes my statement.
Thank you, Mr. Lucius
Uh, we now have managing Deputy procurement officer,
Patrick Paul.
Good morning, everyone.
My name is Patrick Hall. I'm the general counsel and
managing Deputy for the Department of procurement Services.
I'd like to begin today, by thanking chairman viegas for
his coordination and the drafting of this ordinance DPS is
officially neutral on this proposal with the updated
language provided. By the chairman that we are here
discussing today.
DBS understands that that the Chairman's intent is to
incentivize the development of data centers. Locally to
that end, he has proposed a bid preference that
incentivizes the retention of city data locally on
contracts. Requiring data storage. This preference is not
unlike existing bid preferences for City based businesses
and manufacturers
1 concerned that DPS raised with respect to the original
version of this measure was the city's ability to track
things like the location of city data, and real time, over
the duration of a contract term, uh, we did not want to
have a bid preference, codified, that provided us
substantial advantage to prospective bidders without the
ability to ensure that the vendor was and remained in
compliance during its performance on a city contract.
To that. And the chairman agreed to shift the bid preference
to an earned credit incentive, which means that DPS will
have the opportunity to review a vendor's performance and
compliance with these obligations during a contract term.
contract term. Before we Grant the preference, which can
then be used on a subsequent bidding opportunity within a
set time period.
We thank the chairman, vagus first, coordination on that
aspect.
uh, separately, the chairman also agreed to incorporate
language that provided some discretion and rulemaking
authority to the chief procurement officer and the Chief
Information officer, which we believed would also be
essential for implementation of this preference. With these
changes DPS is neutral on the Metro measure and I'd like to
thank the chairman once again for his good faith engagement
with us and other stakeholders in developing this proposal
Thank you. I'd be happy to answer any questions of the
committee. Thank you. Patrick and Nick. And I would also
add that as it relates to rulemaking that the as the rules
are propagated that there will be some presentation to the
committee to make sure that we're advised as what to what
the rules that are being propagated by the, by the
Commissioners, are there any questions or comments from the
committee members?
Alderwoman Lee.
Thank you, chairman vagus. Uh and I apologize if it didn't
make it to the last briefing on this. So, um, apologies if
some of these questions are redundant, but um, for um, the
folks that are in the Box, um,
I'll start with um, the tracking of the data. I do
appreciate that. This is an earned credit versus a bid
preference and that there is time, um, for the CIO and
others, uh, to determine whether or not the the data was
properly, um, stored. As it was supposed to be, are we
going to be able to provide direction to anybody at like
the beginning of? I, I don't understand enough about
procurement to be dangerous about this. So please, you
would have to explain it to me. Like, I'm a 5-year-old at
this point, or at least an uninformed Alder. So
um,
when someone bids on, uh, on a contract for the city,
certainly storage is part of the contract. So I'm assuming
something like a sales force will, um, have a data storage
component to the contract. So that let's say the total
value of the contract is I know it's not a million dollars
but let's just say for the sake of this example, it's a
million dollars. Um, and they, they want to um try to go
for this uh for this earn credit.
At the beginning of whatever the current contract term is
then, will they with with everybody be provided with, um,
the, the sort of framework by which they're going to be
evaluated?
Yes. So the exact Contours of that will be refined during
the rulemaking process to implement this. Um, but the
expectations will be set on the front end the bidder would
uh attest to their um
Their willingness to meet these obligations during the
performance on a contract and then they will have to
provide information verifying that they've met their
obligation at the close out of that initial contract and
then they would receive a credit. That would be used for
subsequent bidding, that would be on the total value of the
contract. Um, not just like the data storage portion of it.
I can't imagine. It's a menu item in the country, that
that's right. Yeah. So just the way that these bid
preferences work generally. Um, they're they're really only
used in terms of our comparison of bids against each other.
Um, so for low bid sealed bid contracts, we are obligated
to award to
The lowest responsive and responsible bidder. Um, but we for
the purposes of comparison of the bids against each other
we um adjust them according to the bid preference, uh,
percentage and so that, as you can imagine, can can drop
someone lower than another bidder. Um, but that would be
all done. After the fact provided that they met their
obligation on a previous. They meet their obligation, it's
in Chicago and thus, in Illinois, they would get a total of
a 6%, um, earned credit and that goes back to how, how
does, how does the company like
Realize that credit. I'm sorry, I'm asking really good
question. No, no, no, all fair questions. Um, so we would
set these expectations so the rule making exactly how they
would have to verify that they've met their obligations.
But um, it by having it be a, a kind of future earned
credit, for a subsequent bidding opportunity. We have the,
uh, the chance to really review their compliance on a
previous contract and then they'll bank that credit. So the
the credit when it's banked would go to a future contract
and then it would sort of come off the top essentially,
essentially, so not, not in terms of of adjusting them, a
check at the end of the day. That's right. It's not
actually affecting what they're paid on the contract, but
for purposes of comparison, their bid would be, uh,
adjusted accordingly. So. Okay. Um, and I noticed here and
this was a question that I had last time. Um, that in order
to get the
The the earned credit, um, that the vendor must ensure that
all data is stored. So and I was confused about that last
time because I at 1 point it was part part of the data, not
all of the data but this seems to me that it's still all of
of the data. Um, so 1 is it really all of the data is?
That's what it says. And then uh, 2 a realistic is that for
somebody to be able to do that, I'm not an IT person and I
don't necessarily understand how
Data gets, you know, stored sure. Um, so what um, the the
new definition of city data, um, is um, a, the major part
of how we address that issue. It ALS goes to the last
question about, um, how to ensure a compliance, the
definition gives that roadmap for. Okay, what kind of data
are we talking about? It's not, it's not all data in in,
it's like, it's not all the data involved with the entire
system. It's all of the city data and then city data is
defined as a subset of data that's manageable. It's well
defined, um, it's understandable and um it will provide a
way to to manage and control. And and actually um affect
this ordinance in a way that we're on the same page with
vendors when we're talking about it, we're on the same page
when it comes to compliance and um and it's more manageable
manageable for um uh putting all data under this ordinance
into a, a server. You know we know what we're talking about
rather than wondering. Does this included? Is this included
Etc? Okay.
Got it. Look, I'm I'm all for creating more jobs, getting
more Revenue. God knows we need it. Um, I just want to make
sure that, you know what we're doing is actually going to
contribute to that um, to that end. Um,
I think my last question. Um,
Is.
Of the contracts that we have today with vendors, that
include, um, data storage. How much, what what's the size
and scale of that. From a city perspective ballpark, you
don't have to give me an exact number.
The right, the the most of our um technology contracts. Um,
Um, the the main component is not data storage data,
storage is not the driver of value. Um, the, um, a lot of
the costs is the um, the development work that it takes to
pay somebody to do to use it skills in order to build a
system. Um, a lot of the cost is in the licenses that you
pay to the companies that use that license money to build
and maintain systems. Um, data storage itself has gotten
cheaper and cheaper. Um, as as a rule as, as time has gone
on, at the same time, um, we make larger and larger amounts
of data. Um, so it's not like you see that in cost savings
necessarily um, but when um we we don't have um, large
contracts where the vast amount of the vast, majority of
the contract goes to data storage. Um, it's it's usually a,
a component of a smaller piece of a larger contract. I
understand that, um, I, I understand that data storage is
just 1 component of a much larger contract, but the credit
goes to the entire body of the country.
Right. Okay, that's what I was. Just trying to get a a sense
of the size and scope. Do we do, we pay 20 million dollars
a year and these types of contracts that include some
some degree of um, data storage. And if you don't have it
you can get it to me through the chair. I'm just again,
just trying to wrap my head around how much we're taught.
Chairman, I think that's all I've got. Thank you, thank
you.
Very much chair. So as I just wanted to understand more.
The city data definition. So
Practically speaking. So we we contracted a couple months
ago with the company that's going to do data
related to planning and development for the city. So
anticipating that data store to would be some component of
that. How would that contract for example?
Play into the ordinance that we're passing today.
Thanks a lot man. So thinking, uh, with without reviewing
the contract, my I would make the Assumption right here,
that the, the contract will probably use data the city
already owns and already store somewhere. Um, and then, um,
be making visualizations that show that data another way.
So, and an example like that, I, that may be a contract
that doesn't have a data store component. Um, just because
you're using planning data that exists,
Could you give an example? Uh, because it was a question
asked in the room and I feel like when people ask their
questions, they they deserve reasonable answers. Could you
give an example of a, a hypothetical
Contract. But from a practical real world perspective that
we might see, for example, in the next 12 months and how
this ordinance would intersect with that contract. Sure,
definitely. So I the, the 1 that comes to mind, um, when I,
when I think about this ordinance is, um, what we call
software as a service, um, in its um um these days uh
companies will build their their own products, they'll sell
them to customers across the whole world as is you with the
city buys the same thing every other person gets they don't
make it custom for us and um they power their um, their
product that they build through the company goes and buys
their own access to data centers. They develop, they do,
the development work themselves and then we buy a license.
can imagine a procurement coming up for a city Department
to, um, um, need this product in order to, you know, it's a
product that's developed for departments just like, um, the
department exists.
This is across uh, US cities and they say we make this thing
for departments like yours. Um, you, you know, this is the
best product out there the department decides to buy it.
Um, and in that procurement, comes a um, an agree. You
know, a need to sign a contract to get access to those
licenses. And within the use of that product data will be
generated and stored within that software companies,
ecosystem in order to provide the forms and provide the
data visualization and provide the services um to that to
that um Department.
And then they would as the software service contractor.
so, if they wanted to,
Receive this paid incentive in the future would have to
subcontract with.
The data store Center within the boundaries of the city of
Chicago is that accurate?
I think that's that's a way. Um, a way could be that they,
um, they have their own, um, that they have built their own
data storage facility. Um, some companies are big enough
that they've done that. Um, and but yes, I think
subcontracting would be the primary way if they haven't
done that. Okay? The, and I'll only ask 2 other questions
because I don't want to dominate all this. The point was
raised earlier when we think about cyber security.
That the clearest and most vulnerable point of attack is
point on premises. I feel like I heard that in the back.
Is that an accurate statement? Because if it is, it gives
me cause for concern
if there's a real,
Geographic clarity as in terms of where our data is being
stored. Do you know what I mean?
Yes, and, and I think that, um, you know, I think it's 1 of
a lot of different cyber security threats that are out
there. I, I think, um,
There, you know.
A very big 1 is fishing and um, and human manipulation
exercises, that trick, a person into providing data. I
think that
The the non-technology based tax um, are, are these days
often some of the most successful because of how they can
get around security? They can get around protection of
Technology, technological infrastructure protection. So in
1 Realms human manipulation tactics are can be a lot more
successful than trying to attack and penetrate the actual
technology. Um, but we need to your point, um, um, you
know, knowing more about the architecture of any entity
where their data is stored, how they do it? What where the
what the address is of the location is always a
vulnerability. Um, and so less information about the
critical infrastructure and architecture is is always a
primary security measure.
I appreciate that. I had 1 other Revenue question that I
would raise. So it was
It was number 1, we do need Revenue. Anyone who is
following anything related to the city's budget?
Understands that
I would like if someone could elaborate more on how that
relates to
Data centers because the point was made in the room that
data centers on average generate 13 million dollars.
Per Data Center.
I would appreciate that elaboration because my my
understanding,
From previous briefings and from previous hearings on this
matter is.
fundamentally the benefit that we do get from data centers
is the increase in assessed value for the property that we
only truly capture
new property taxes. And if we're going to use Metroid as an
example, and there are many data centers in the city, but
for Metro Edge, like we did do a class 6B that I voted in
favor of because it's a good development, but that comes
with it a 21.5 million
Tax reduction that they get over that 12 year period, 4.9
million of that, which is borne by the city. And I think
that's a positive thing because it's the kind of Economic
Development and jobs that communities deserve we vote on
these on a monthly basis.
But it feels like it runs at Cross purposes to the revenue
conversation.
and so I'm wondering if there if there could be elaboration
on that 13 Million number
Yep, kind of anticipated that question. So we had asked a
tax expert. Who's been looking at that? Uh, can we get
Chris Stark, uh, to the, um,
To the microphone please. Please identify yourself and what
what it is that you do for a living as well.
Thank you members of the committee for the record. My name
is Christopher Stark with Johnson research group. We are a
real estate consultant firm that was asked to look at data
centers in the Metro region. Um the 13 million reference is
speaking to those large um hyperscale data centers as they
exist. Um, when you're talking about a larger facility such
such as the cuties facility, that is located down, uh,
along the South Branch of the Chicago River. Um, you are
correct that the, uh, property class incentives when they
are granted. Would result in a lower valuation, the uh, 13
million dollar or you know, in that range of 6 million to
13 million depending on the square footage of the facility.
It's really when you're talking about the larger facilities
that you get to that full 13 million, uh, reference and
reference, and that just has to do with the valuation of a
data center. Being that much more intense and valuable
based on the client base, then some of your older Legacy
type data centers.
Clarity. Thank you. I
so I feel like you and the partners on this work have been
nothing. If not transparent and created multiple spaces for
engagement on it, I do generally appreciate that.
I appreciate the substitute and the intentions behind.
The working group.
my at least experience of The Last 5 Years is
there's so much.
Uncertainty built into those kinds of working groups.
The concerns that I've discussed in this space and in those
briefings remain outstanding. And so for myself personally,
when we come up for uh,
A motion. I would prefer to be recorded as a no vote, but I
do appreciate the item before us today. Thank you. Sir
Lopez.
Thank you. Chairman. Um, first off
Uh, believe it or not.
The Almond of the first award stole, my first question
about the taxation so I'm glad that we got that answered.
Um
2 points that I want to bring out.
bring up our
First, I think that.
the city of Chicago is a whole
when it deals with.
Uh, technology and Revenue.
Its maintenance, its use and its monetization.
um,
we are so far behind in our thinking, it's not even funny.
And I think that there are many departments who still think
of this as as a 1950s 60s operation.
Um, and clearly I think to be perfectly honest, I think
that um, as I heard the
CIO talk about licensing. I think that's the
underlying bubble waiting to burst in our budget to be
perfectly Frank.
because I think that while we are talking about,
Declining revenue, and other things that have brought us to
this 980 million deficit for next year.
The rising cost of all of our technology and its proper
licensing. Emphasis on proper licensing. Uh, and usage, I
think is, is really something that none of us are truly
prepared for? Um, some of us may be, I'm sure.
The IT department is, but I don't think all of us are
prepared. So, um,
To that end.
As we talk about data and we've had a number of
conversations of what is data, what is in, what are we
talking about the city of Chicago collects data on millions
of people?
Correct.
2.5 or 6 to be exact.
What are we doing to actually monetize the value of that
data that we collect? Because I think that it's great to
talk about. We're going to welcome people to build storage
for their data.
But as we've seen with Facebook and all social media, and
all of those things, there's definitely Avenues upon, which
that we can monetize our own data.
And use that in turn for the benefit of the city of
Chicago. So
Whomever will want to take a stab at that. I'll take a, I'll
just make a comment. Then I have Nick, give me technical
terms, but I can tell you that data is is an asset. That's
valuable. I mean, we produce a ton of data
and our sister agencies produce a ton of data and we pay
hyperscalers to store that data without anything coming
back to us. So I think that when we take a look at and I
would I would also add that remember this department of
technology and Innovation is new because it was shallow 4
years ago. So now we have a CIO that's uh, and a department
that's focused on delivering services with technology at
the Forefront.
And I think it's a year year and a half, that it's in in,
in existence, maybe 4 months since the cio's been
confirmed. So they're we're behind. I agree with you on
that. And I think that the last Administration by
consolidating it into another department really didn't help
us.
Uh and so 1 of the things that we did as a body, the last
budget was to to pass a budget that had the creation of the
DTI. And so now we have to allow for our CIO to put forward
strategies on how he's going to uh, bring us up to speed,
but also take a look at ways that we can create
efficiencies, but also create Revenue. So so I'm anxious
to, you know, work with uh, our new CIO and our colleagues
here come up with ideas on how to do that from from from
that standpoint. So now that our CEO talked a little bit
more technical about what he envisions
And and I'm sorry I want to make sure it's not a slight on
him or the department because I know. Oh no no I just
wanted to give context that I know Lori was behind.
On a lot of things context that we're a little bit behind
here. So I appreciate that. Appreciate it. I got it in. You
see that also appreciate the comments chairman and and
Alderman Lopez. I, um, when I think about this question, 1
of the first opportunities I think about is, um,
To have run a more efficient government, and, and better,
serve residents, what I mean by that, is how many times do
we ask a person? Um, fill out this form and give us all
your information. When another department did that just a
few weeks ago with the same person, um, by better utilizing
our data and I'll say monetizing by making sure that we um,
um, use it smartly and run a more efficient government. I
think there's a not only a lot of if um efficiencies we
could get to make government run, smarter and better and
not be as costly. We also provide a better service to
Residents. We make make it easier for people to get what
they're asking for. For the government, I would love to
work with you or talk with anybody about ideas for how we
can use our data more strategically, um, and create cost
savings, um and and and make the city better off, um, by
better use of data.
Well, I'm sure I and many of my colleagues would love to
further those conversations. I know that's not the topic of
the day, but I think it's nonetheless interconnected
because
data is an asset.
And it's an asset that we are.
You know, as the saying goes we're sitting on a gold mine
and not activating it.
you would not we capture value and property when it's
built, but we do absolutely nothing with data and even our
own employees, our our own residents, our sister agencies
Interact with people a thousand different ways. Every day
that can be used monetized.
Um,
Sold, however, we need to use it. Um, but to help offset
The cost of everybody else. So I think, um, that's part of
this conversation.
And as we're having those conversations that gets back to
this ordinance which is where do you store all that
information?
I for 1 know and even just a quick Google anyone here
sitting here today can do a quick Google search and do data
breach.
and you'll just see pages and Pages, Even in our own City,
we've seen where the University of Chicago, the Secretary
of State's office, Lurie, Children's Hospital Brookfield,
Zoo, Cook County, Hospital, AT&T, those are all the top
ones. Just on, on page 1,
Of a Google search.
This year.
Where we need to focus is as we are compiling data. As we
are generating data for other third-party vendors,
we need to also, make sure that we're being responsible and
I understand and hear what some of those in opposition say
to this, but I think that it is incumbent upon us to do
everything. We can to ensure at least geographically as my
colleagues stated that the information is being kept
secure.
And that is to ensure that it is within our own borders.
Regardless what Texas and and the East Coast want to do you
have centers popping up on the other side of the world that
we have no control over. We have seen how social media has
been manipulated by communist China.
And taking advantage of information.
That can't be something that this body allows. Um, so I
think this is a step in the right direction. With some
fluidity for what needs to happen to help grow this
Emerging Market. It's, um, I'm sure there'll be ways down
the road where we can.
find Revenue options as those places exist but until
Chicago becomes somewhere that people want to invest in
again,
All of this will be a pipe dream.
And I think this is what we can do to help show that we are
serious about joining the 21st.
And it's almost time to start thinking about the 22nd
centuries as we move forward because um, Chicago at the
heart of this country.
Can be and should be the epicenter.
Um, we were 100.
And 100 plus years ago with the railroad and it's our
ability now to do that with data. So hopefully my colleague
will join in support but look forward to furthering this
and the monetization conversations in the weeks to come.
Thank you. Thank you. Almond Lopez, almond Hall.
Thank you, chairman. Um, my first question that I have is
um, simply when we look at infrastructure, um, I do think
that in in a completely agreement data local makes a
difference. But when we talk about the construction, a what
does the impact have on residents? Um, this will require a
lot more energy. Um, will their what's the the the impact
directly to those who are living in the area of the data
centers? Has there been studies done to sure? No disruption
know. Um slowing down of services for those who are living
near it.
Alderman, you know, I think that's 1 of the topics that the
working group is poised to dive into and um, you know, and
I think there there's, um, there's a lot of information on
what people think may happen around a lot of data centers
that happen in the city. Um, a lot of the data centers that
exist are in rural areas, um, in, in the middle of the
city's, quite a different, um, installation. And I, I think
the working groups poised to to dive in and see what that
means to live near a data center in urban areas. Um, and
um, and, you know, that a data center has construction jobs
that come with it. Um, um, a data center, has some jobs,
um, for people working in the building, um, and, uh, and
look forward to using that Avenue to to dive further into
the question, you just mentioned, um, give me a Runway to
my next question. The construction jobs of the data center
a is, are there any projections or approximates? How many
jobs would be created? Just in the construction and then
how many jobs will?
Be left to maintain the data center once it's fully
constructed.
So for the maintenance of the data center um in the
Personnel to run it, you know what I mean? Not just the
janitors, but the tech team in need the account, the
economy, okay? Okay, so I'll add that there are. Um, if you
take a look at, you know, a data center is a building,
that's being constructed. Usually, they're all types of
Trades that are associated with it. So anywhere from 100 to
200 jobs that are temporary and then you also have jobs
that are
Directly associated with the data center. Then you also have
maintenance local 399, the, the, uh, engineer, the
engineering officials. Um, maintain those. Then we also
have, uh, custodian, like specialized custodian positions
that are uh, or companies that need to perform maintenance
on it as well, by making sure they're dusting. The server
is correctly, right? So there's a lot of jobs that are
associated with it. Both on a temporary and a permanent
basis. Got you. And so in good faith and trust that the
hope is then pipeline in a lot of those jobs neighborhoods
within the ward so forth and so on, have you? Um, last but
not least, um, identified any potential partners. And what
I mean by that is we mentioned, you know, the trade jobs
that come with the construction. But um, are there any
plans to when we look at the young people in the schools,
near a potential data site to get them introduced to stem
and other things. In that field of work that might lead to
career jobs. Is there a commitment to do that? Post
Construction.
Absolutely Oliver. This is an area. Um um beyond the data
center conversation um that I've been interested in working
working on for, for, for months. And it's, um, I was just
out at, uh, um, exchange, um, um, um, recently, which is a,
um, an organization that's put, put together to, um,
create, um, access to training, access to apprenticeship
programs. Um, but um, making stem
careers more viable for um, Chicagoans as a whole um, is a
huge opportunity because um,
You can get into 1 of these jobs coming from any background
and coming from, you can be a second career. Um, and there
are good paying jobs and we have a lot of opportunities
and, and data centers, do provide the ability for people to
have more opportunity, um, uh, to tap into those centers to
do their job from where they do their job, got you. So
minority partnership and construction jobs local connection
connection to kids and community in a sustainability plan
for energy resources in the community. I think that's a
win-win and I'm looking forward to seeing more of this plan
uh just evolved in the city. Thank you so much Mr. Chair.
Thank you. Ottoman Hall and listen. Technology is a sector
that oh for sure it's ripe for growth. I mean Governor
pritzker has always said that you know we want to make
Illinois silicon Prairie. Uh well I want to I want to make
to make sure Chicago like the epicenter for take for uh,
for Tech business. And we're seeing that silicon Westside.
That's right. We're we're seeing the tech Investments
despite our effort.
Hurts. And so we want to make sure that we're signaling that
that we're open for business as the city of Chicago. I just
want to say Mr. Thanks for making more space for
conversation, dialogue and partners. Um, alderwoman Mana
hoppenworth, followed by Alderman waguespack, followed by
Alderman, Reilly
Thank you, chair.
Thank you for all your work on this ordinance and for all
your collaboration. I, I mentioned to you after the last
hearing that, I've never had so many different groups,
reach out to me because of their concerns and I see a lot
of those concerns were addressed. I'm very impressed by the
um, book of letters of support that you provided to us
including um, many of our colleagues across, uh, different
levels of government from County to state,
um and also our colleagues who do support this including
um,
uh, those who
Have probable projects in their Wards. Um, I just wanted to
get a sense.
actually of the, um,
How, how much of, how much geography do you think that? We
need to how much land do you think that we need to devote
to this project for it to?
Actually have a benefit for the city. Yeah. So I'm gonna
get my response and then I'm gonna ask Lawrence
Uh, to come to the mic because he's, uh, a selection site
expert that previously worked at Microsoft. And that's what
his job was. I'll say to remember, so local zoning is going
to come into ex it come into play here. The the local alter
person will have the ability to determine where that
project is going to be uh be built. Uh and so you're going
to have a, a say as to where this is where, where this is
built? So Lawrence, can you, um, answer alderwoman mop
what's respond. Sure. Thank you committee. Uh, so the
answer really depends on the type of data center. That's
being built, uh, within urban areas, they tend to be what
are known as Edge data centers, which can be built on, uh,
you know, 1 to 2, acre Parcels, uh, the, the larger sort of
hyperscale single tenant, uh, more, you know, horizontal
type data centers. Typically you're you're going to need,
you know, 20 to 40 acres, you know, I would say minimum,
uh, for those but the
Those don't tend to be in cities. So um, with AI uh that's,
you know really what a lot of these new data centers are
for. Um there's actually more of a need to go vertical than
vertical than horizontal. And so, uh, these could be done
on, you know, again as small as, you know, 2 acres. And as
large as, uh, you know, is
Is necessary to, to house that, uh, infrastructure to
support it and the building. So, um, it really is just a
function of the type of data center. Um, you know, we you
the ones you're seeing in the, in some of the more
far-flung suburbs can be hundreds of Acres.
Thank you. Chairman may I address the question as well.
Yes, thank you. Commissioner Ider 1. Um,
In addition to the land, um, infrastructure. Um we've also
met with Cam ComEd um to understand the, the grid
infrastructure um and understood from ComEd that there,
there is a um, there is a grid impact and a grid need. Um,
part of the equation that comes into, um, into it. Not
every piece of land or um, area of the city has got the
infrastructure needed and a lot of times what um, is done,
when new energy needs come in to an area where something's
built on a piece of land, that didn't have it before
they've got to build, maybe a new a new site. They, they
need land space to build a new, a new little power station
to help power, the new energy use, um and they're in the
data center World thinking, a lot about how to address
these needs and um and create the energy available to for
the at to use on the grid.
Thank you, I I appreciate that. Um, you know,
the reason why I held,
The ordinance last time is because I had concerns about the
environmental impact.
um, I of course, we want to find more creative ways to
to generate Revenue.
Um,
And and my, you know, in Edgewater we've been hit pretty
hard with increased property taxes so we don't we don't
want to do that. And um, so we need to look towards others
but I I just worry about the
like where these are going to be built. For instance, in
the in the Edgewater area, we don't have acres and acres of
land to build. Um,
A Data Center and even if we did want to build up, I don't
think my community would want that, you know? And and
that's why that's why uh um these are going to be zoning.
that would allow for the altar person to determine what
actually is going to be built there. Exactly. And so um, I
appreciate that too. Um, I just I'm wondering.
what I don't see in this book is I don't see anything in
here about, um,
The environmental impact of this work and I see that it is a
a part of a working group. Now, I'm disappointed that, um,
the chief sustainability officer is not here to speak on
that. Can I can I? So, um, she sent me an email last night,
um, setting a personal note, since I'm unable to attend,
tomorrow's committee meeting which is today as, uh, was
stated. Uh, what IG and the department environment is
hosting the mayor.
Um, in our city, departments as sister agencies that are
Workshop.
That all highlight financing financing competitive grants
and incentives available through the inflation reduction
Act.
Um, she stands, right? The department of environment is
committed to working cross, to permanently, to further
explore all elements of data centers, and to provide
recommendations to Foster sustainable design, and
development of future sites, and opportunities to address
environmental impacts. We look forward to staying
coordinated and following up with the committee on those
recommendations in the future sincerely. Angela Tobar.
She, she had unfortunately had a schedule. Um, I'm glad
that she was invited. Yeah. Oh, 100%. Yes, yes. Well, I
heard, I heard you and I heard some of our colleagues
around that and that's why I was important to have section
2, which states about the, uh, sustainable working group
into the department into departmental working group. And
once the group has found its findings, it will report not
just the economic capital and Technology development can
be. But also to the environment committee, we want to make
sure that we're doing this responsibly uh from not only
from a fiscal standpoint but also from an environmental
standpoint
Yeah. So so
I see that in, um, in the ordinance that we do talk about
the
Um, thank you for the, for the procurement department for
being here. Um,
There were 2 versions given to us. Yeah, so my staff had
initially, um, printed out the wrong version. There was
some working documents. So the 1 that you received with the
joint committee on economic capital technology, as well as
environment. That is the final that we all voted on, okay?
um, I see that the chief procurement officer can determine
not to allocate and earned credit under um, the section. If
um, if they determined that, it's not in the city's, best
interests is that?
The only.
Question, my question is I'm very concerned about the
environmental impact and I don't see that in this ordinance
at all. I see that there's a working group that we plan to
have, which is great because I think that is absolutely
necessary. Um, I see that the section that it's under will
expire following the presentation of the inter departmental
working groups report so I don't know exactly what that
means. Can you speak on that a little bit? Yes. So 2
things, so, Department of the sustainability department has
already been engaged with the Department of planning around
new development. And there are checklists that the
Developers need to.
Check off in order to uh uh ensure approval of their
projects. So that's number 1. So Chief, there's already
sustainability environmental um requirements that for new
development does that's already in there. What we're doing
is we're taking a look with this working group. Is that
what else can we do? What else can we do? What else makes
sense. Because what's that right there is the, the, the
theory we want, we want to measure what the applied is, is
so the chief sustainability officer in the working group,
determined that there needs to be more added to the
ordinance than we come back. And we add to the ordinance
based on the based on the particular Department inter
departmental working groups recommendations. That's why
it's important that we have these discussions and everybody
at the table. So that way, as we're coming up with new
technology or new ideas, it can be implemented.
Thank you for that.
because I, I think it's important that, as we're doing
creative things to raise revenue that we're not doing it on
the
On the communities that have been impacted. Um and um there
there are real environmental sacrifice zones in the city of
Chicago. So, I'm, I'm worried about those communities. Um,
and and and I don't see in this ordinance anything about
uh, sustainability or. And I believe that we should have
that and everything that we do, if we're trying to codify
things moving forward. So
I'm glad that there's a working group in here. Um I would
like to see more. Thank you for your commitment to creating
more trailer bills. 100% again, we can't allow perfectly be
the enemy and so what we want to do is put forward
something that creates Revenue. If we see that we need, we
need to make adjustments, we come back to the body and say,
based on, uh, the, uh, what's actually happening on the
ground. We need to make amendments in order to do that, and
I've made my commitment to my colleagues number 1, but also
with um, with CIO and the cpos as well as sustainability
officer.
Thank you, chair. Thank you.
Uh, Alderman wages back.
Thanks chairman um, chairman, how many data centers are
there in Chicago? Do we know?
I have I have a map but I that says 136 but I'm not sure if
if that's correct and I'm assuming that those are mostly
type data centers. Yeah, yeah. Um, that have received
zoning changes, many of them. I think over the years so I
don't have that number. I can tell you that there's not
many that are built. You said 136 in the city of Chicago.
That's just from, uh, the data center map uh.com. But I
think that could be various types. So, yeah, I was just
curious how land area. Yeah. Um, no, it says Chicago, but I
was just curious if we knew how many were in Chicago
proper. So there's not many. I can tell you that, I know
that the state of Illinois has been very aggressive in
providing incentives for
Data centers. And as a result of that, we've seen really
like elgro Village really explode. We're also in the uh,
Hoffman Estates is going to repurpose the old, uh, Sears
headquarters, right? Um, out there. So there's going to be
tons of, uh, again data centers built unfortunately.
They're not built in the city of Chicago's because they'd
rather go elsewhere. So we're trying to make it more
attractive. Well, the um, so Illinois does provide massive
incentives for these data centers. I'm sure there are some
of the bigger ones as the gentleman mentioned, you know,
the hyper, uh, single tenant type, you know, you mentioned,
um, elrow village. I saw, um, Facebook got 80 million for
their decal, center from the state of Illinois. I don't
know if that was through sales tax exemptions or other uh
incentives. But um I think the state between 2019 and 2222
gave 468 million in in sales tax incentives to the build
out these data centers. So I'm just curious. Um, does this
does your Ordnance prohibit other
Incentives in any way. Or if procurement was looking at it,
would, they include those other incentives in any type of
approval of 1 of these data centers.
so I, um,
The 3. So the 496 million that you mentioned of tax
incentives, has generated 3 billion dollars worth of data
center. So there is a return on that investment. Um, and so
I'll allow procurement to speak about the incentive 468,
yeah 468. Thank you, Patrick. Call. Uh, general counsel for
counsel for DPS. Um, we do have language in here that
prevents uh, kind of duplication with other related bid
incentives, particularly the city based business, but in
but that is the only kind of redundancy duplication that,
we've, we've Incorporated. Okay, thank you Patrick, thank
you chairman, thank you all very much. Bye.
Alderman. Reilly
Do you have any further questions? Okay.
All woman lie right quick before.
Thank you. Chairman vagus. Um,
The 1 follow up question and then uh comment for you. Um,
Nick do is, is
Is the last quarter of the Year enough time for you to put
together sort of the. And this is, I guess this is a
question for both of you. Um, procurement and the chief
technology officer. Um, do we have enough time to for
January 1st, start to this to set up the sort of rules and
regulations in the policies um for you know implementing
this.
from from my perspective um we do we um getting the data
definition in place and then having the ability to ensure
that we can Define data center. So that, you know, we're
we're talking about something that is an actual data
center. Um, are are some of the most important things to
get done up front? I think a lot will be on the back end
with future compliance and making sure there's a road map,
um, as uh, um, this General Council for DPS stated. Um, but
for, for our perspective, I think so, um,
Chairman Vegas. Um, I know that, um,
Over the course of your leadership on this uh, committee,
Uh, you've instituted some report backs, um, annual report
backs on different pieces of legislation. Um, you know, I
have some reservations just because I'm not sure if this
goes far enough but like and we've got a, we've got to
start somewhere. Um, and with that you know, I'd be willing
willing to support this with the understanding that we're
going to continue to look at it and I think there's a lot
more we can do to incentivize, um, and, and create more
opportunities because I don't know that I totally
understand why it is. There's been such a, uh, lopsided
number of
Um data centers builds in the City versus in the suburbs. So
you know I think when we better understand that we're going
to be better able to really leverage whatever we have or
or figure out where we need to pull other lovers, um, to
make building data centers more attractive here in the city
of Chicago. So I appreciate that. And to your point, we got
to start somewhere, um, and
if we're able to, uh,
Offer an incentive and get a return on investment. I think
that's what the whole intention of incentives are and so
what you have my commitment that we'll continue to monitor
this because
We got to find ways to create new Revenue without having to
to go pull the levers that we traditionally have to pull,
which are property taxes, fines fees and tips. We got to
find new revenue and I think that this is an Innovative way
in doing that. Um, and again, looking forward to working
with my, my colleagues, again, this is moving technologies.
Always, you know, every, you know, what's new today is old
next month. So we got to continue to work on this. I'm with
you, wholeheartedly on the need to lean on technology
especially in times like we're facing right now, 100%
budget environment. Um, so I I'll continue you've got all
of us here, um but we definitely want to look for ways to
continue to increase this.
Thank you, thank you for your collaboration. Uh, almond
Riley.
Thank you chairman. Um, and I I do have a series of
questions. I'm a co-sponsor of the ordinance with you um
but understand that as is the nature of the legislative
process you've been negotiating with a whole bunch of
different folks. And you have a substitute um, before us,
you know, as we've been having this conversation, it
occurred to me that um this would be, we're talking about
incentives, you know, trying to find ways to attract more
data centers within the city of Chicago's, you know,
limits. And it seems that this would also be a very
productive discussion to have in zoning and land use
planning.
Um you know beyond Financial incentives, Beyond contract uh
advantages. Um we should actually take this up with
whomever it is is going to lead the zoning committee. Um,
whomever we choose to to lead that particular
Uh, body. Um but uh, I think everyone agrees whether you
support this ordinance or not that, um, the city of Chicago
should be doing, whatever it can to attract these because
of the incredible economic benefit. And I understand that,
um, these types of facilities are not for every
neighborhood, but we do have large manufacturing districts,
We have underperforming neighborhoods with large tracks of
land. And assuming that our Utility Partners are able to
uh, install the, the requisite.
Infrastructure. Um, it seems we've got some big
opportunities. Uh, so the last thing that I want to do is
tip the balance, um, in favor of competing municipality,
right? Um, bottom line, we want to realize these these
benefits within the city of Chicago, proper
um, you know, it was interesting in hearing from the the
city departments that you've been negotiating with um, that
they, you know, they appreciate the give and take and, and,
and they seemed satisfied with a number of the changes
you've made.
Why is it?
And maybe this is a a question for each of the folks from
the Departments.
Why are you only testifying with neutrality?
Rather than as proponents uh, of this ordinance.
I, I noted that you took care to say that you are neutral.
Whomever would like to take that. Awesome question first, I
guess I can, I can start Alderman. Thank you. The um in in
in looking at the ordinance um in, in my analysis. Um, I it
it's a it's an economic development ordinance. Um and it's
it's got procurement regulation in order to achieve it. I I
saw that the, um, the that dti's involvement was on like
operational impact. How is this going to?
Um, how's this going to impact our operations? These, um,
these this the earned credit. The incentive, the setup of
this.
and um, in looking through the ordinance, um, the CH the
edits allowed us to say, can we achieve best practices and
technology and running our city and making sure that as we
contract, that we can contract in a way that makes sense
for us. And we we determined that we could
um, since the ordinance as a whole involves, a lot of areas
that are outside our expertise as uh as as our department
in charge of running, the city's technology um uh stance of
neutral made sense because the the main impact of the
ordinance is areas outside of of our of our knowledge and
expertise. So when we said yeah we can do we can we can
keep keep everything running the right way and do our
business with this. Um, that seems to be the right stance.
Okay. Thank you for that answer.
yeah, I'll Echo what um commissioner lucious just noted to
I think uh
Really just tried to hold in on the procurement aspect of
this, but understanding that it's a kind of multi-issue.
Um, neutrality was a natural fit for you understood and
chairman as the administration take an official position on
this ordinance. The The Substitute are they neutral or
Uh, silent uh, or a proponent.
Uh, maybe IGA.
Want to respond on this.
I'm not saying whether that's a good or a bad thing. I'm
just asking,
I would, I would suspect that if the Departments are
neutral, potentially the administration is neutral
Okay. Yeah, um, and I can
Maybe hear from IG later. Okay? Um, so just so we all have
a an understanding of kind of the scope of
Business that exists and maybe chairman you're the expert
on this by now. Um, I mean, how much money are we talking
about being wrapped up, uh, in the city of Chicago data
storage contracts, on an annual basis? You know, we're
talking about tens of Millions.
Hundreds of millions, do we?
So I'll I'll I'll allow the commissioner because that thing
that question was posed earlier and that he needs to get
get that. Oh, we don't have that yet. It's, it's not,
there's not a, there's not like a contract of just storage.
It's booked into all threads, I understand, okay. Then I'll
wait, I'll wait for that information through you chairman.
Um, it was purely just to get a sense of how much we're
talking about.
um,
And it was brought up by a few of our colleagues earlier.
And um, again I I just want to make sure I I really truly
understand why the ordinance was crafted in such a way that
we are empowering the CIO and the CPO
to promulgate.
Basically, all of the rules for administration and
enforcement of this ordinance.
Um, rather than at least codifying and pretty broad
Strokes.
what we expect in those areas, um, and you chairman and I
have talked about this for for a long time, um, which long
predates, this Administration, um, you know, the, the
natural inkless inclination of the legislative body.
Is to very narrowly prescribed.
How an ordinance should be administered, right? So so and
and and administrations typically
Prefer to have that as nebulous as possible and relegated
to the rulemaking process that their bureaucrats control.
And somewhere in the middle is probably the Right Mix.
And we don't have to talk about the need for um, a
committee that actually approves rules. We can do that some
do that some other time. Alright, you know that since uh
mayor Emanuel mayor Lightfoot and even with this
Administration I've introduced legislation around
The promulgation of rules that it come back to the body. So
that way, we can ensure that the intent of the legislation
is actually being carried out. Uh, a lot of times we see
that, um, the, uh, and I don't say this negative, the, the
bureaucracy tends to creep, um, and, and go outside of the
scope of the legislation. And so there, really there is
there isn't a mechanism that we have in city by in city
council right now. And that's something that I've attempted
to, to put forward. Um, the administration rules committee
that would allow for
As the commissioners of ProMag to rules to come back to the
body to ensure. And even if we
Have offered up 2 Solutions where we approve it or if we
don't say anything then it's it moves forward similar to
how Congress does it and how Springfield does it? So, uh,
I'm a proponent of that, and I stand, but this is the
language that we typically use within our ordinances that
allow for the Commissioners to promogate rules. Sure. And I
understand that and, and again, um, not all bureaucrats are
bad. I'm just saying that that we'd prefer to to to control
control these outcomes better, um, given that you are the
chairman of this committee. And given the fact we lack a
rulemaking body
Uh as a legislative branch um this subject matter Falls
within your committee. Um
I think you made an offer earlier in your testimony to have
the Departments come back as they're in the process of
promulgating the rules. And I would say that if you can
make a firm commitment that that will occur before the
rules are implemented.
So that we get to weigh in.
Um, I'll support the ordinance that I've co-sponsored,
despite the fact that the Chamber of Commerce has raised
some concerns about it.
And that the association that represents data centers has
raised concerns about this. Um, and before I finish
I think it is worth talking about some of the concerns that
were raised by the Illinois Environmental Council.
And that's why I mentioned zoning and land use planning
building standards. So, I think there is room in that
committee and within that section of the city code,
For us to make some I think reasonable accommodations
there. Um and I'd like to to flag a couple of the
recommendations as very good ones, not the least of which
is mandatory participation in demand response programs.
Um, this allows large facilities, like data centers to
basically turn back electricity to the grid.
And there's usually a modest profit model built in um to
reduce uh the The Strain on Peak load.
And so, um, things like that if we really do want to get
competitive in this market, and we're already number 2 in
the country. We want to get that number 1 spot. We need to
plan for those types of things too. Um, so again, chairman,
I, thank you for bringing this forward. Um,
So be, I want to make sure since the, the Departments are
here, that are going to promogate rules, we'll get them to
commit to coming back to the committee. Prior to the rules
being committed, CIO and Deputy procurement officer.
I'd be happy to. Um, anytime asked, um, come to the
committee to discuss
Same here.
Great. So then chairman we'll we'll we'll look to you then
to to convene that that hearing so we can go through their
their suggested rules.
um and then finally could you please just for my own um
edification uh,
or perhaps you want to invite the chamber whomever, I want
you to testify against your or ordinance
Explain to me why. Um,
Chicago lands.
Premier business organization, is opposed to this still
despite all of your efforts.
And why the National Data Center Association remains
opposed?
Um, well.
Trying to remember.
Parts of the testimony from the Chicago land chamber. Um,
In this in, in the Chicago, land Chambers testimony, they
did state that they are supportive of the fact that
creating new Revenue in innovative ways.
As a relates to their opposition. Um, I had requested a
language from the around the data center residents, local,
local residency data ordinance and I was provided um,
Recommendations around how to get construction of these
data centers up and running in essence. Cutting the red
tape which I supported 100%.
But that didn't fit into the local data residency,
ordinance. That is something that we we're currently
working on. And I say we the cities currently working on
with through the cut through red tape initiative. So, all
those things are part of that and so it didn't fit into
the, the ordinance. So I didn't get any feedback
specifically around the local res. Do local residency
ordinance. And so,
That's where we stand. Okay. Um, all right. Well, I
appreciate you, uh,
Helping educate me on the the latest developments on the
ordinance. Uh thank you chairman. Thank you Alderman.
Reilly
Any other further questions?
so with that, we'll go ahead and um,
May I have a motion to recommend passage of the ordinance.
substitute ordinance rather, uh, with the
With Alderman laspata being recorded as voting. No,
Alderman, August bag uh, makes the motion
the motion will pass with the except exception of all the
mpa voting no
Thank you.
Being no further business before the committee.
Uh, committee is adjourned. Thank you.