Reset at the bottom.
Yeah.
Mic check. One, two. Mic check. Three, four.
Mic check, check, check. Nobody said anything about rules.
We said Mic check. Mic check. One, two. Mic check.
Three, four. Mic checking. A mic. Mic one. Mic two.
Mic three. Mic four. Mic check. One, two. Mic check.
Three, four. Mic. Checking. A mic. Mic, mic, mic.
What day is this? Mic hump.
Just wanted to, uh, alert you that we are waiting
for Alderman to show up due to the inclement weather.
We're having some difficulty getting a quorum here,
so please be patient.
Thank you.
Good morning. Good morning.
I always tell myself I would not say Happy New Year
after the 6th of January,
but, uh, since this is the first finance committee meeting
of 2026, happy New Year to everyone here.
Let's have a productive new year.
Um, the Committee on Finance is called to Order.
We'll take a roll call to establish a quorum
Vice Chair, Conway.
Alderman Lata Alderman Hopkins.
Alderman Hall. Alderman Mitchell. Alderman Beal.
Alderman Lee. Alderman Ramirez. Alderman Quinn.
Alderman Lopez. Alderman
Curtis Alderman.
Osha Alderman Rodriguez.
Alderman Scott Alderman. Ccho Lopez.
Alderman Burnett. Alderman Irvin. Alderman.
Talia Farrell. Alderman Cardona.
Alderman Waba. Alderman. Rodriguez Sanchez.
Alderman Cazada. Alderman Viegas. Alderman MITs.
Alderman Spaza. Alderman Vazquez.
Alderman Riley. Alderman Knutson.
Alderman Martin Alderman Silverstein.
Chair Dial is here. We have a quorum.
We have 18
Alderman present in the room.
Alderman Harris, Mosley Taylor,
and more have requested
to participate remotely at today's meetings
for reasons under the provisions of Rule 59.
Can I have a motion for these alderman to participate?
Motion made by Alderman Cazada.
All those in favor of the motion signify by saying Aye. Aye.
Opposed? And the opinion of the
who is the No, you always A no.
Nick. Okay. Um, and the opinion of the chair.
The ayes have it, and the motion carries.
I'd like to confirm Alderman Harris. Here.
Alderman Mosley. Present. Alderman Taylor. Here.
Alderman Moore. President, chairman. Okay.
They're present and are now part of this meeting.
At this time, we'll begin the public comment period.
Uh, the public comment period is limited to 30 minutes,
and each speaker is limited to three minutes.
Our first speaker, alderman Hopkins here for roll call.
Our first speaker is Phil Beckham.
Good morning everyone. Uh, Phil Beckham from,
uh, Bronzeville Area.
And my, my, uh, alderman Pat do, uh, I came here, number one
to, uh, welcome the new, uh, uh, CEO to
of choose to Chicago.
And, uh, I also want
to support the funding, the TID funding.
Uh, I think it's not only, uh, necessary,
but it's also necessary for, uh, the money to be, uh,
to bring in more conventional meetings to the, uh, city
of Chicago and for tourism.
And also, if that money could, some of
that money could be used to, uh, enhance
and, uh, put more shine
and light on, on some neighborhoods like
Brownsville, uh, and other communities.
Uh, so I fully, uh, uh, support it,
and I hope the, uh,
the committee will support it. Thank you.
Thank you, Mr. Beckham.
Our next speaker is George Blakemore.
Madam,
you know, something is wrong here.
Dealing with the money, dealing with tip, dealing
with timing of these meetings.
Your job as chairman, your job
as chairman, is to make sure that these meetings are run
the right way and you fail
because these meetings was set up 15 minutes apart,
and you are taking the seat
of the Notorious Finance Committee.
Burman bur what happened with corruption, fraud and abuse.
And it's happening right here now.
And if you was a, a, a very wise, a good public servant,
when they call in
and say that,
that they can't make it, they gonna go virtual.
You know, all of this is over COVID-19.
That was the purpose for virtual.
Otherwise, you come and do your job. You're getting paid.
These people are here today.
There's no excuse for,
for people on your committee to not be here.
Your job is to educate, inform,
and enlighten, uh, uh, the, your constituents
and to make sure you have order here.
So, so you fail, but, but,
but Bronzeville is not bronze anymore.
It's turned, uh, little white.
But you advocate for a certain, uh, class of black
boozy blacks to move in.
But you used to say you didn't want any low income.
But now, part of the scheme,
you want them the low income.
And this, with this Altman 34 Conway.
How in the hell did he get from Roseland down here?
How gerrymandering, Mr.
Blakemore, what is the term gerrymandering mean?
Illegal district. That's a black ward.
And they didn't lose population were Ron
Mosley and Brookings.
Those are predominantly black wards.
But these other blacks wanted to stay in
and they agreed to, to disenfranchise these people.
It, it's corruption here.
Fraud and abuse here,
because the people allow this to go on.
And all of y'all are Democrats,
don't talk about Trump races.
All of y'all voted for illegal immigrants
to come here for this place.
The Native blacks that was enslaved here.
So again, it's very important for me
to come to these meetings.
You need to be checked.
You need to check yourself because it's a wreck.
Thank you, Mr. Blakemore.
Our next speaker is Lisa Timbo.
Good morning. My name is Lisa Timbo
and I'm the general manager of the Sheridan Grand Chicago.
And I also, uh, serve as the area general manager
for Marriott, representing nine hotels across the city.
I'm here today in strong support of the creation
of the Tourism Improvement District, or TID, Chicago.
And speaking not just for one hotel,
but for many hotels across Chicago that depend on a strong
and competitive visitor economy.
In my role, I see how closely our hotels are tied
to the city's ability to attract meetings, conventions,
and large scale events.
When Chicago wins, our hotels win and so do our workers.
I have been involved in the effort
to create this tid from the very beginning.
From the start, the goal has been clear.
This is about creating a stable, dedicated funding source
to help Chicago compete with other major cities
for conventions and group business cities like Las Vegas,
Orlando, and Indianapolis invest heavily
in sales and marketing.
Chicago must do the same to stay competitive.
I'm also plea pleased with accountability
and transparency measures built into this proposal
to ensure its programming's long-term success.
More conventions in Chicago mean more hotel rooms filled.
That also means more hours
for our union workers across the city.
Hotel housekeepers, banquet staff, engineers,
and front desk employees will benefit when occupancy rises.
It also means more work
for the union workers at McCormick Place.
From event setups to food service to operations,
these are good paying family sustaining jobs,
and they depend on steady convention business.
A tourism improvement district is an industry-led solution.
The hotel industry is choosing to invest in Chicago
by agreeing to fund efforts to bring new visitors here,
the dollar stay local
and are used only to promote Chicago as a destination.
This is not a general tax, which we typically oppose.
It is a focused tool
with a clear purpose and a strong return.
From my perspective, I can say the investment matters.
It drives demand, supports workers,
and strengthens the city's economy.
Additionally, it will ultimately generate much needed tax
revenue for Chicago's general fund as well.
I urge the city council to support the creation
of Chicago's tid.
Thank you for your time and your consideration.
Thank you, Ms. Timbo.
I'd like to add, uh, alderman Irvin
and Alderman Moore, uh, to quorum.
Alderman Moore, you're off of Rule 59. Thank you.
Our next speaker is Dennis White.
Good morning. Good morning.
Um, I don't know
what's going on here with these financing budgets
and these tax hike that been hitting these ci,
these tax payers for the longest.
And you had the president from CPS,
Sean Harney, who was appointed by Brandon Johnson,
late 2024, secretly they had a meeting
on a property tax increase that they approved.
So it's coincidental that Brandon Johnson appointed somebody
to CPS while Brandon Johnson still a CTU member.
And then all of a sudden it's starting to get, it's starting
to hit me that all these policies are CTU
and where's the money?
It's not where the money is coming from.
'cause we paying the taxes.
It's where the money is going to.
Is it going to development
business or the illegals?
That's the question that has not been answered.
And that's the answer that's always been deflected by half
of the city council member who
approve this unnecessary tax hike
because people always want to tax the rich tax,
the rich tax, the rich.
And then when everybody say no
to Brandon Johnson, he threatened to veto,
but he didn't veto it,
but he, he didn't say he didn't sign for it.
So the question is, when is this mayor going
to have some common sense to fund
and put these money in where we needed it?
Then they say, well,
crime intervention and, and crime is still going up.
So where's that money going to?
I believe this should be a forensic audit here.
Do on Brandon Johnson on
where the money need is are going to.
Now, Trump already made it clear, no,
no federal funding here in this state and in this city
because you all want to hold this sanctuary ordinance
that almost all of you all voted for.
And now we got, now we paying this told to hell
because half of y'all
doing everything backwards.
And I'm gonna address something
to the black aldermans you part
of the equation of the problem too.
You are part of it. So the election coming in less than a
year, and so get rid of
Thank you, Mr. White.
Um, wanna acknowledge Alderman OSHA as part of Quorum
and, uh, alderman Nugent,
who is a non-member who's joined us today.
This concludes the public comment period,
and we will now move on to the items on the agenda.
We have a total of 12 items today.
Uh, the first will begin with the approval
of the December, 2025 monthly Rule 45
report for the committee.
Uh, there are no questions.
Uh, alderman Riley moves to pass.
All those in favor signify by saying Aye.
In the opinion of the chairs, the ayes have it,
and this motion carries.
Um, item number
one on our agendas from the Department of law,
a communication transmitting reports
of cases in which verdicts, judgments,
or settlements were entered into for the month
of November, 2025.
Uh, this report was sent electronically to everyone.
If there are no objections, we'll place these items
on file with the clerk.
Item number two is a communication transmitting reports
of cases in which verdicts, judgments,
or settlements were entered into for the month of December.
This report was also sent electronically to everyone,
and if there are no objections,
this item will also be placed on file with the clerk.
Item number three from the
Department of law are three proposed orders
authorizing the corporation counsel to enter into
and execute settlement orders in the following cases.
Case number three, a Nicholas Santos versus City of Chicago.
Case number 21 C 5 25 3 2 7
in the amount of $162,500.
We're joined by Deputy Corporation counsel,
Derek Kon. Good morning, Derek.
Good morning, chair. Good morning.
Members of the finance committee. This is CINs v.
City of Chicago. This is a disability discrimination matter.
Plaintiff Nicola Santos was denied medical clearance in 2019
for a firefighter firefighter position
at the Chicago Fire Department.
Due to a history of mental health issues.
Plaintiff alleges that the denial
of medical clearance was discriminatory on the basis
of his disability and that he was objected
to an improper medical examination.
On summary judgment, the court made a finding
of liability against the city as
to plaintiff's claim related
to an improper medical examination.
As a result of this finding, the court ordered the city
to in-state plaintiff as a firefighter
after he passed a renewed medical clearance,
awarded back pay, and will award attorney's fees and costs.
Plaintiff also sets forth claims
for disability discrimination under the Americans
with Disabilities Act and the Illinois Human Rights Act
that we'll proceed to trial if the parties
do not reach a settlement.
As to these claims, plaintiff could recover emotional
damages and additional attorney's fees
and costs for these claims.
If they are not settled. All other damages would be
duplicative of those already awarded by the court
and plaintiff could not seek double
recovery as to those claims.
Plaintiff is represented by Marnie Willson of Enson Law.
The city is represented by Heather Becker of Lanar Muci.
Plaintiff first applied to work as a firefighter
for CFD in 2014 after he passed a written examination.
The city placed him on an eligibility list
in the fall of 2018.
Plaintiff successfully completed initial processing,
which included a pre-hire physical test.
The city made plaintiff an offer
of employment conditioned on medical clearance.
The clearance process began with an evaluation
by the city's third party vendor, Concentra.
During this exam, plaintiff disclosed a history
of anxiety and depression.
CFDs then medical Director conducted an evaluation
of plaintiff in January, 2019, concluding
that plaintiff had minimal depression
and low anxiety at the time of the evaluation.
He was nevertheless concerned by certain aspects
of plaintiff's psychological history.
As a result, CFDs Medical Director referred plaintiff
to a specialist, Dr.
Diana Goldstein of the Isaac Gray Forensics Group.
On February 13th, 2019, Dr.
Goldstein administered two psychometric examinations.
Later that day, CFDs medical director spoke with Dr.
Goldstein, who informed him
that plaintiff fell into the unacceptable category.
Based on this information,
CFDs medical Director did not recommend Plaintiff for hire
and plaintiff was not admitted
to the March, 2019 firefighter class.
During discovery, CFDs medical director
testified that he believed Dr.
Goldstein's evaluation to be an assessment
of plaintiff's fitness to perform the required duties
of a firefighter safely.
Dr. Goldstein testified she performed a suitability
screening that was not a fitness for duty determination.
However, largely as a result of this discrepancy,
the court found for plaintiff on his claim
for an improper medical examination.
The court summary judgment order leaves only one element
remaining as to plaintiff's pending disability
discrimination claim.
That is whether plaintiff is qualified
to perform the essential functions of a firefighter.
Plaintiff is currently employed by CFD
and has been since December 2nd, 2020 25
with no issues reported.
Plaintiff's treating psychiatrist Dr.
Vanessa Koler would testify at trial
that plaintiff was capable of safely performing the duties
of a firefighter in 2019.
The court summary judgment order further preclude several
of the city's key defenses
that plaintiff posed a direct threat to the health
and safety of, of himself
or others, that the medical tests he was subjected
to were job related and consistent with business necessity
and that plaintiff failed to mitigate his damages.
There are two categories of damage damages in this case.
Those that have already been awarded as a result
of the liability finding and those that are being settled
as part of this proposed settlement.
Previously, the court awarded back pay
and plaintiff is entitled to attorney's fees as a result
of the liability finding.
If we proceed to trial,
plaintiff's remaining claim on plaintiff's remaining claims,
he will seek over $200,000 in damages
for alleged emotional distress.
Plaintiff's attorney's fees will continue
to accrue likely amount of at least $150,000
and the city's outside counsel would continue
to accrue costs
and fees as well in total damages would likely exceed
$475,000 including costs, fees, and damages.
The Department of Law recommends settling plaintiff's
remaining claims for $162,500.
Resolving these claims would serve as a cost effective means
of reducing financial exposure to the city.
Uh, thank you Mr. Kon.
I want to acknowledge Alderman, ADA
and Alderman Vasquez have joined us
and will be counted towards, uh, quorum.
Are there any questions on this case for, uh, Mr. Kuhn?
Seeing no questions, can I get a motion for approval?
So moved by Alderman Hopkins.
All those in favor signify by saying Aye. Opposed?
Alderman Moore. Okay.
In the opinion of the chairs, the ayes have it
and the Do pass recommendation will reported out at the next
city council meeting.
Want to acknowledge Alderman Mitchell? Good morning.
Who has joined us and will be counted towards quorum.
Item number three, Al,
I have my hand up.
Oh, I'm sorry. I'm, I'm sorry. It's Alderman Taylor.
Yes, alderman Taylor. Sorry I didn't see
you. Alderman Taylor?
I'm a no, You're a no. Okay.
Thank you. We will record that.
Um, item three B, Tim Anderson at all versus
David Brown et all.
Case number 1 23 dash
cv dash 2 2 4 5 in the amount
of $875,000.
Uh, this settlement will be reported out
by Carolyn Franzi from the Corporation. Counsel,
Uh, good morning chair. Good
morning. Members of the committee,
this case involves allegations
by 21 Plaintiffs against Unknown Chicago Police Officers.
This is the last of 15 cases
that were severed from a larger lawsuit
that was filed entitled Protestors in Support
of Black Lives versus City of Chicago.
All the other cases that were severed from the original
action have been resolved.
This is the last case, and it initially involved 26.
Plaintiffs five of whom have now either separately settled
their claims in connection with other severed cases
or voluntarily dismissed their claims.
The remaining 21 plaintiffs in this case alleged
that unidentified Chicago police officers
used excessive force against them during protests,
which occurred during the summer of 2020.
The plaintiffs alleged that the City of Chicago
and former suit Superintendent Brown,
are responsible under a monell theory of liability
for the harms that the Chicago police officers
allegedly inflicted on them.
Essentially, the plaintiffs are alleging that the cities
of Chicago's police department's policies
and practices allowed the officers
to commit alleged constitutional violations.
13. Plaintiffs alleged that they were injured
during the protests over the last weekend of May in 2020,
mostly in and around downtown eight.
Plaintiffs alleged injuries sustained
during a July protest in Grant Park.
Only two plaintiffs were arrested
and only two made complaints which
were investigated by Copa.
Copa issued not sustained findings to the complaints
because they were unable to identify the accused officers.
The plaintiffs alleged a variety of actions
by Chicago police officers largely involving, pushing,
striking with batons about the body and head,
and the use of OC spray allegedly resulting in injuries
ranging from minor scrapes and bruises to concussions
and head lacerations.
10. Plaintiffs sought medical attention
and produced records of treatment for their injuries.
Other plaintiffs produced photographs
of their alleged injuries while a few were unable
to provide any documentation of their injuries
but testified to their injuries in sworn testimony
and depositions, the parties reached an agreement on a total
settlement payment in this case in the amount of $875,000,
which is inclusive of attorney's fees
and costs subject to City Council approval.
The 21 plaintiffs and their attorneys would decide
amongst themselves how the settlement would
be divided amongst them.
However, the average settlement per plaintiff would be
41,667 inclusive of fees and costs.
The Department of Law recommends
that the city accept this proposed settlement which was
achieved through extensive
negotiations with plaintiff's counsel.
The Department of Law and coordination with
outside counsel has been actively involved in all
aspects of the settlement.
In exchange, plaintiffs will dismiss with prejudice any
and all claims against the city
and its agents, including sup, former Superintendent Brown,
which were or could have been brought
by them arising from the
incidents as part of the settlement.
The city on behalf of itself
and Brown denies all allegations of wrongdoing
and denies liability.
The parties acknowledge that the settlement
of plaintiff's claims is not an admission liability
or of unconstitutional or legal conduct by
or on the part of the city, brown
or any unnamed Chicago police officers.
Thank you, Carolyn. Uh, any questions on this matter from
members of the committee?
Alderman Lopez, followed by Alderman Sdo, alderman Lopez.
Thank you chairman and good
morning members of the committee.
Good morning, Ms. Franzi.
So before I get
to the questions about the actual settle settlement,
how many individuals are associated with this?
21. 21
Plaintiffs Has the Department of Law
and the Department of Finance, uh,
done debt checks on all of these individuals?
Yes. And clear?
Well, I believe there are some debt from some individuals.
I don't know the specifics of that alderman,
but debt checks were done
and will be submitted to the comptroller's office to be
set off from the ultimate, uh,
Should it be approved?
Yes. Okay. Okay. Thank you for that. You're welcome.
Um, as far as this overall settlement goes,
Copa said it was unsustained
and yet we are still moving forward.
We have individuals who are unable to provide documentation
and we are still moving forward.
I believe we are sending a message
that you could make allegations
and then we are just gonna simply settle even when you don't
have the facts to back up what you are saying.
Um, time and time again, we are settling
with people who've caused great harm to this city.
I know the last time we addressed somebody with regards to
what happened at Grant Park
and the law department was very selective in the video,
shown the information that we saw on the set on the
the def uh, the plaintiff's own social media, um,
doesn't show them to just be people who were
practicing their civil rights in a peaceful, calm manner.
Um, I have problems
because I still vividly remember what happened in 2020
and cannot support individuals
who were intentionally out there trying
to destroy this city.
And I would ask all of my colleagues to remember that
when they vote on this motion.
Um, and Chairman, when it's appropriate, if we could do this
by a roll call, I would appreciate it.
Thank you.
You Can chair. Can I make a comment about the video?
Yes. I would disagree with you, uh, strongly
regarding the presentation of the video
that was Pres presented to you at a,
at a confidential briefing.
You had every opportunity to view every portion of
that video if you so chose and you have made inaccurate
and, um, false comments
regarding the presentation of that video.
I'm sorry, if you're going to accuse me
of making falsehoods, which video are we referring to?
I'm sorry. The video. Which video are we referring to?
Video that you referenced, uh,
regarding the last presentation I made to you that you
Did that. There's nothing false about
that.
If you really wanna go to that point, I will remind you
that many of us who saw in that confidential briefing,
that video that you played, asked from the minute or so
before the interaction you showed,
which showed a very different perspective on that situation,
which is why so many individuals voted no.
If you wish to engage in what we see
and what you share, then maybe you should start sharing them
fully for the public to make decisions.
'cause I'm sure that they would have a
very different opinion as well. Help
Lopez, if you have a disagreement
or you feel that your position is correct and that Ms.
Fran's position is not correct on a item that we've already,
um, passed judgment on, I'd ask you to do that
outside of this
Meeting. Well, I think
if the law department's gonna start accusing
people of lying, then they should be prepared
for the rebuttal that will come after. Thank you.
Thank you Alderman Silverstein, we'll count you towards,
uh, quorum and Alderman Rodriguez Sanchez.
Um, alderman Spto followed by Alderman Wapac.
Thank you Madam Chair. Uh, good afternoon, Carolyn.
Appreciate you. Uh, just one question for you, ki kind
of saying what my colleague said.
So, um, we know we have video
of these people getting roughed up
or whatever, mistreated by unnamed
or unidentifiable police officers.
But the one question I didn't ask, so them
expressing their civil rights, do we have anything of them
throwing frozen water bottles, throwing spears at 'em,
and any, any activity from any of these people
that are getting some of the settlements
or just kind of just, they're just kind of there
with their nice friendly signs
and then the they got kind of got roughed up?
I mean that's, that's what I'm trying to find out.
I I, and I didn't ask that question the other day,
So I'm not sure how to address that question just
because there are are many videos out there
and there are many videos both before and
after, um, the incident.
Um, so I can't specifically answer that question in terms of
what the interaction was immediately prior
to a use of force. Okay.
So, so we were able to tell
who the individuals are that are suing us
At some point, there are videos of individuals
that are suing us and at some points there are individual,
there are videos of police officers interacting with them,
but we cannot identify the
officers that we're interacting with. Right.
But my, but my question is the opposite.
Can we identify any of, of these individuals
that are suing us, throwing a water bottle,
throwing nothing? Okay. That's it.
Not that I'm aware of. Simple
Questions. All right. Thank you. Thank you very
much.
Thank you Madam Chair. Uh,
Thank you Alderman. Alderman Wack.
Thank you. And good morning. Um, my questions are
around the representation for the case.
So, um, did who in DOL manage the case?
So I managed the case in conjunction with outside counsel.
Okay. And then the outside counsel was who did?
Uh, Taft. Okay.
And how much, um, did we pay for outside counsel on this?
I'd have to get you that through the chair.
Okay. Um, could you break that down by hourly if possible?
And then the total amount
In terms of hourly, you mean their hourly rate,
Their Yeah, if they had different hourly rates
or if, um, if it was just the,
whoever the managing partner was on the case, um,
what they were billing.
And I think we have a cap, so
I don't know if it was maxed out.
Right. We do have a cap.
Okay. Um, were there any other attorneys
that were originally involved, um,
and that either stepped aside, um, on the plaintiff's side?
Yes. Okay.
And I, I, if you can't answer this, um, please let me know.
But, uh, my understanding is that our COOO,
our present COO was involved as a plaintiff's attorney
At, at some time.
She was, and she withdrew once she was, uh,
hired by the city of Chicago.
Okay. And when she was hired by the city of Chicago,
did we go through a full conflicts check
to see if there were outstanding issues in terms
of representation,
even though there was withdrawal from this
case, but on all cases.
So I don't know the extent of her, uh, full hiring
and the background process that was done on her.
She doesn't work for the department of law,
nor does she act in any capacity as an attorney
for the department of law.
However, it is my understanding
that the corporation counsel received assurances
that she would withdraw from any pending cases
that she had against the city of Chicago and has done so.
And that's on the monetary side.
If there's any, uh, issues with, um, um,
I guess existing, well,
I guess if she withdrew Okay, I'll, I'll stop there.
But I think, um, I'm, I was just curious
because I, my understanding there were a lot more than did
just this one case that, um, there was involvement in.
And I think it behooves us to know whether
somebody who's the c the existing COO has any involvement in
any cases or access to those cases.
Um, or any influence in terms of,
um, department of law.
So in, I can only speak to the cases
that are in my division
and, uh, this individual does not have any access to any
of the cases in my division,
nor would I allow access to any of the cases in my division.
Um, and I have never coordinated with her on any
of the cases in my division.
She has not offered any legal analysis of any
of the cases in my division.
Um, I very much appreciate your
professionalism around that.
And that's all the questions I have. Madam Chair. Thank you.
Thank you Alderman. Wack Alder, point
of information. Alderman Moore,
I apologize in my, um, ignorance
or didn't something change.
We have a acting CEO now.
Alderman Beck, did you want to respond to Alderman Moore
or I, or not?
I, I, I could opine on it a little bit.
I think, um, it was my understanding that we had removed
that position from the budget,
but, um, someone informed me that
that position has been filled, um,
and that it does exist presently.
But, um, I haven't verified that
We can get an answer for you through the chair.
Thank you. Alderman Hopkins.
Yeah, thank you Madam Chair.
If this matter were to go to trial, uh, would it be, uh,
would there be a separation
among the plaintiffs involved? How would that work?
So that would be up to the trial judge in order
to determine how he thinks the best way
to try this case would be.
That is very much a possibility
that he would wanna sever out some
of the cases within this case, um, to make for a more,
um, efficient trial.
But we just don't know what his thoughts would be on that.
Ha Have you had any indication of plaintiff's counsel
what their desires would be?
Would there be additional lawyers brought
in if that were to happen?
Or, uh, is this treated
as a class matter? How would that work?
Um, it's not a class action.
It's each individual is on their own, um, individual basis
and have their own individual allegations.
I am not aware of how the plaintiff's foresaw this case
going to trial if it were to go to trial.
Okay. And, and I imagine under such a scenario,
fairly significant workload for, for you
and for Taft on this matter.
Yes. And that is one of the justifications
for settling this set of,
and by the way, this is, you guys did good work.
This is a, uh, you know, this is a reasonable sum
considering what's at stake here.
Uh, unfortunately, I, in in,
in no way am I imp ping your work.
In fact, I'm, you know, giving you due praise,
but I'm just, I'm gonna have to vote no on this.
I, and, and
because I don't believe, uh, that in this case the, uh,
the plaintiffs will successfully meet the burden of proof.
I, I just, I think they will lose that trial, in my opinion.
So despite the fact that I know it would be a,
a very difficult and, uh, and lengthy process
and a costly one, we might wind up spending a lot more
money, um, than you're proposing here.
Um, uh, I just can't support this
settlement and I'm gonna have to vote. No. Understood.
Thank you. Uh, thank you Alderman Hopkins.
Uh, alderman Lopez has asked
for a roll call vote.
I wanna say before I take the roll call
that I'm recusing myself out of an abundance of caution
as the plaintiff in this, uh, case is a constituent
of my ward and someone that I have had interactions with
regarding matters in and outside of the ward.
Uh, so with that said, uh, vice Chair Conway,
point of order, alderman Lopez,
I said that you made a motion.
You did make a motion. You asked for
all those in favor signify by saying Aye.
All those opposed, okay.
So let's just do the roll
call Vice Share.
Conway Alderman Lata.
Alderman Hopkins. Alderman Hall.
Alderman Mitchell. Alderman Harris. Yes.
Alderman Beal. Alderman Lee. Alderman Ramirez.
Alderman Quinn. Alderman Lopez.
Alderman Moore. Alderman Curtis Alderman.
Osha No. Alderman Taylor. Yes.
Alderman Mosley. Yes. Alderman Rodriguez.
Alderman Scott Alderman. Ccha Lopez.
Alderman Burnett. Alderman Irvin. Alderman.
Talia Farrell. Alderman Cardona.
Alderman Waba.
No. Alderman. Rodriguez Sanchez. Alderman Cazada.
Alderman Viegas. Alderman Mitts. Alderman Sdo.
Alderman Vazquez. Alderman Riley.
Alderman Knutson. Yes. Alderman Martin. Yes.
Alderman Silverstein. Chair
Doll Recuses herself.
The motion passes at 20 yays and nine Nays.
We will report the due pass recommendation
at the next meeting.
Thank you both. Item three C, Orlando
c Ramirez, Orlando, j Ramirez, excuse me.
And Jesus Alvarez. Vasquez.
And as Special Joint special Coad, administrators
of the estate of Angel e Alvarez.
Montesinos deceased versus City of Chicago.
Michael Spilotro iii. Eric Arroyo.
John Doz, individually
and his agents of the City of Chicago.
Case number 23.
2023 L
0 1 0 1 64 in the amount
of $22 million, 20 million paid by the City of Chicago.
2 million paid by the city's insurance.
Um, we're joined by Margaret Minden Hall,
Casey Deputy Corporation counsel
to give us the facts of this case. Ms. Mendenhall.
Thank you Chair. And good morning.
All This case arises from a June 16th, 2023
car accident at Roosevelt
and Independence, where a fleeing offender, Charell Martin,
who was then 16 years old, violated a red light
and crashed into Angel Alvarez Montesinos car
as a result of the accident.
Angel who was 25 years old at the time
of the accident was killed.
The Department of Law recommends settlement in the amount
of $22 million.
That is $20 million paid by the city of Chicago,
and $2 million paid by the city of Chicago's Insurance
at 5:30 PM Officers, Michael Scho the third
and Eric Arroyo were on patrol
and a marked SUV near Roosevelt
and Keeler, OEMC broadcasted male blacks
with guns were in a gray Hyundai.
Defendant officers
and two other police officers responded to the area
and located a gray Hyundai in the alley.
As Officer Scho pulled up, the Hyundai exited the alley.
Officer Spilotro followed offender Martin East on Polk
without lights and sirens.
Activated beat 44 63 followed,
and the third police car did not follow.
Officers announced the Hyundai's direction over the radio.
The dispatcher asked if this was the gun call
and the officers responded.
Yes, the dispatcher's. Next question. Who is this?
When unanswered throughout the incident, officers failed
to respond to multiple attempts by OEMC
to gather information.
Offender Martin turned onto Holman and officers followed.
Officer Spilotro moved into oncoming traffic to pass a car
and returned to the proper lane Offender Martin
and Officer Scho drove along the center line
and failed to stop at a stop sign.
Both vehicles continued driving in the wrong lane,
passing two cars
before moving into the left turn lane at Roosevelt Road.
At this time, the officers still had not activated their
lights and sirens nor notified OEMC of their actions.
Offender Martin and Officer Sp
made a right turn from the far left lane
of traffic cutting across two lanes of traffic.
The second police car did not follow
and began slowing down at Roosevelt in St.
Louis. Offender Martin
and Officer Spilotro drove into the wrong lane
of traffic offender.
Martin continued weaving into the wrong lane of traffic.
Officer Spilotro determined that it was no longer safe
to follow and slowed down to 53 miles per hour
before the accident.
Offender Martin violated a red light at independence in
Roosevelt and struck Angel's car.
That accident killed Angel.
Angel had a green light and the right of way.
At the time of the accident, offender Martin pled guilty
to reckless homicide
and served 90 days in juvenile detention.
The Hyundai was stolen.
However, officers did not know this before the accident.
Officer SP's top speed was 62 miles per hour at the time
of impact offender Martin was traveling at
88 miles per hour.
One mitten one minute
and 20 seconds passed between offender Martin
fleeing the alley and the accident happening.
At the time of the accident.
Officer Scho was only 900 feet away.
The entire incident is captured on body-worn camera
and car camera and private surveillance footage.
Officer Scho testified that he connected the male
with guns in a Hyundai dispatch, which I discussed earlier
with the incident that happened about 14 minutes
before the officers got to the alley.
Unrelated officers reported a stolen car driving recklessly
with a child inside
and the license plate for
that car matched offender Martin's car.
However, this was not confirmed until after the accident.
A child was not in the Hyundai at the time of the accident.
Sergeant Placencia, who was a supervisor
of the investigating officers
testified he believed this was a pursuit
and that if the pursuit was for child endangerment, lights
and sirens should have been activated.
And OEMC should have been notified.
Sergeant Placencia testified the officers only observed a
traffic offense and the general orders
prohibit pursuant pursuing for a traffic offense.
Angel is survived by his mother, Claudia,
who's currently 55.
His father, Jesus, who is 59 years old, his sister Daniella,
37, and brother Fabian 15.
Claudia was living in Venezuela, Jesus in Texas.
Daniella living in the Dominican Republic
and Fabian, um, Angel's brother was living in Florida.
Claudia, um, had only one child and that was Angel. Jesus.
And Fabian claimed to have communicated with Angel Daily
and Daniella spoke to him every weekend.
Both the city and the plaintiff retain accident
reconstructionists and police procedures experts,
plaintiff's police procedures expert,
former Chicago Police Department superintendent
Gary McCarthy, IMP ps the conduct of Officer Spilotro
and Arroyo Copa reviewed this matter
and sustained six allegations against Officer Spilotro,
including improperly initiating a pursuit.
Im properly continuing a pursuit, failing to notify OEMC
and failing to activate license sirens.
COPA recommended termination for Officer Spiro
and superintendent Snelling concurred with CPA's.
Recommendation COPA sustained three allegations against
Officer Arroyo, including failing to notify OEMC
and failing to activate lights and sirens.
Copa recommended a 30 day suspension for Officer Arroyo
and Superintendent Snelling concurred with CPA's.
Recommendation, the Department
of Law recommends settlement in the amount of $22 million.
That is $20 million paid by the City of Chicago
and $2 million paid by the city
of Chicago's excess insurance carriers.
Uh, thank you Ms. Mendenhall Casey, uh, vice Chair Conway.
Madam Chair. Well, based on, I I don't have questions,
but based on the size of the settlement, I'd like
to say a few words, but willing to defer
to others if they have questions.
Uh, before that,
Say a few words. Okay.
Um, I'm counting.
Okay. This is a, this is a certainly a tragic case.
We have a 25-year-old who, who
lost his life following a police pursuit.
And certainly no vote we take can change that,
but we do have a, a fiduciary duty here.
And so I did some research on, on
what these cases have begun to look like.
And we must acknowledge
that we have seen settlement values in police pursuit
crashes really grow dramatically even when the police
officer doesn't make physical contact as here
just the last couple years, here's what we've seen.
February, 2025, we had a $27 million settlement
for the family of Angela Parks
who was killed when a driver flee.
Police struck her April of 25.
We approved a $32 million settlement for a man who lost both
of his legs when struck by a vehicle in March of 24,
we approved a $45 million settlement for a teenager
who suffered a catastrophic brain injury in a police
chase crash in Westtown.
Those are the settlements. Of course, we can't, uh,
forget about the $79.8 million verdict, um,
for the family of a 10-year-old child killed
during a 2020 police case.
So, against this backdrop, $22 million is not an outlier.
And frankly seems like a prudent effort, um,
to limit the city's exposure here.
But I think it's important that we acknowledge
how fast these numbers have have escalated 10 years ago.
If you look back, these, these types
of cases would settle like in the one to $3 million range.
And now these numbers that we're hearing today are,
are standard at the time.
Um, one thing I would also would also say is to the,
to the law department,
I think does a great job and certainly you, Ms.
Menal Casey, uh, chief among them.
But getting some of this context in, in settlement, um,
in our settlement briefings,
I think would be, would be helpful.
But I I also want to acknowledge the budget context
that we're facing here.
We set aside this year, $82 million, 82
and a half million dollars, uh, for settlements.
And today, here a few weeks into the year,
we're gonna spend, you know, a quarter of
that, give or take.
And by the way, that was not,
not a number in dispute whether you were part back the
mayor's budget or the budget of the Rebel Alliance,
that would number was the same in in both of those.
So none of that makes the settlement, uh, inappropriate,
in fact illustrates why it's prudent.
But I really want
to make sure we are confronting the reality here
as we look at the liability for the city going forward and,
and have the proper context.
But for, for those reasons
and perhaps the, the words of caution around it,
I support this settlement
and would ask my colleagues to do the same.
Thank you Madam Chairwoman for indulging me in the chamber.
Uh, thank you very much. Alderman Irvin.
Thank you. Uh, thank you Madam Chair.
I do, uh, appreciate the, uh, comments that, uh,
vice Chair made in, in relation to this.
One question I do have is, I thought our SIR
uh, was at 15 million.
When did we jump from 15 to 20 million?
I can get you that answer through, um, the chair.
I do know that our SIR varies from, from year to year,
and that for this particular year, it was 20,
but I can get you information about when our
sirs were 15 million.
Okay. And then, and also, what is it now in 2026?
I can also provide that information through the chair.
Okay. Yeah. Again, it's a, you know, tragic case.
Uh, and unfortunately, um, you know, the throws
of having a municipal police department here in the state
of Illinois, especially in Cook County.
Um, the only other thought in question is, uh,
from a risk management perspective, uh, what is happening
around pursuits, around chases?
And if any discipline was applied in this,
in this, in this scenario.
Um, uh, you may have mentioned
that if you did, uh, uh, forgive me.
But, um, where is the other side of, of
how we manage this particular risk around
chases and, uh, disciplinary too?
Sure. I'm happy to answer that question as
to this particular matter.
Um, for the driver officer Stro
Copa recommended termination, um,
and the superintendent concurred with that recommendation.
Um, as to Officer Arroyo, there was a recommendation of, uh,
30 days suspension.
And the superintendent has concurred
with that recommendation.
Um, in terms of the, the discipline, it is a rapidly
changing day to day as to when, um,
and if anyone will be served and what next steps look like.
But where we're at right now is, uh, recommendation
and concurrence of a termination for stro and recommendation
and, uh, concurrence for 30 days on Arroyo.
Well, the thing that's refreshing, uh,
'cause generally there, we,
we don't hear anything about the discipline.
And, and, uh, that is one thing that
that does generally help turn tithes
and situations is when you hold people accountable
for them. So, thank you Madam Chair,
And thank you. Um,
was it 30 days or? I thought it was three months.
So when I spoke with, um, Copa as well
as, uh, BIA, uh, to confirm, they did inform me
that it was in fact 30 days chair,
30 days, not three months.
Yeah. Thank you. Yes. Thank you Chair.
Um, alderman Lopez
Again, thank you, chairman. Good.
A uh, morning members of the committee.
Good morning. Um,
Good morning.
This settlement leaves me conflicted
because my gut reaction is to obviously
be not in support
because we know we have individuals, criminals
who are the ones who are truly responsible
for this unfortunate death.
But I have a question because I also heard
what you were saying about, um,
to my colleague's point about the accountability
of not following procedures that are clearly stated.
Had they in fact followed all of the general orders?
Had they answered their radio when OEMC was calling,
and I understand this is a hundred percent speculative,
but I want to just to both colleagues' points,
would we be in this position today if all
of those items in pursuit of dangerous individuals
been followed, would we be paying a settlement
today of this magnitude?
So, um, I, I'll answer that, that question with,
if the officers had notified OEMC,
if the officers had had their lights
and their sirens on, um,
the city would be in a much stronger position in terms of,
uh, the defense of, of this file.
Um, there's evidence in the record that if
the officers had notified superiors gone over, um, radio
and said what was going on,
the pursuit would have been, uh, terminated.
So with the evidence that we have, um,
in the record is it's extremely difficult to, um,
lodge a defense for this case.
But if the rules were followed, it makes it a easier case
to defend.
And this transpired when exactly,
Sure. It happened in
June of 2023, June 16th.
We are gonna start the year on a great foot
because I'm in full agreement with Jason Irvin.
Yes. As well as to
Alderman Conway's point as well.
Uh, you know, it's my,
it is snowing outside, so it may have frozen over.
We never know. Um,
but I think that we have seen plenty of,
of these settlements that I routine routinely have had
to vote and have had conflict with
because our officers, even in recent events,
are still not following the rules of engagement
that keeps the city safe.
And I think that we as a council, especially as the mayor
and others in this chamber, are trying to limit
how much we're spending on overtime
and settlements and things of that nature.
We really need to knuckle down, so to speak,
with the superintendent, with our, as in particular,
but departments as a whole to see
how we are correcting this behavior.
'cause the behavior is not changing.
The corrective actions are not happening.
And as much as I love my first responders,
we cannot continue down this path.
So I gladly look forward to working with my colleagues, uh,
as well as to the Chairman of police and fire
and public safety, to see what we could do with finance
and budget to make sure that we are correcting behavior
because this is beyond tiresome at this point,
when there are simple things we could do that would save us
tens of millions of dollars while simultaneously still
trying to keep communities safe.
So with that chairman, um,
I will be reluctantly supportive of this.
Um, and if there's no questions, we'd move
to pass on this item.
Make The motion this time,
Hold your horses.
Um, wanna acknowledge Alderman Curtis, who has joined us
and will be counted towards roll call.
Um, alderman Hall has asked to be, uh,
in this meeting for reasons under Rule 59.
Can I get a motion?
So moved by Alderman Irvin to allow Alderman Hall
to participate by remote means Alderman Hall.
All those in favor signify by saying Aye. Aye. And opposed?
And the opinion of the chair. The ayes have it.
Um, and can I confirm Alderman Hall? Are you there,
President? Happy New Year, everybody.
Same to you. Alderman Spto,
IAM chair. Thank
you, Maggie. Uh, thanks for the briefing also.
It's pretty informative. Uh, pretty damaging.
Once again, tough to support, but we have to support it.
Tra tragedy. Uh,
but piggybacking off my good friend's questions there about
should, should we or,
or should we not have, uh,
the speculating if we did follow procedure?
That's not my question. My, this is more of a statement.
This is a statement for the future for everybody.
This is just a prediction.
This is a damned if we do, damned if we don't, people,
the next settlements are gonna be
because we didn't chase the bad guy.
We didn't do anything about it.
They were racing down the streets.
They were wreaking havoc in the community.
And something's gonna happen, and we're gonna be
responsible for doing nothing.
So I'm not asking for a response.
I'm thanking you for the briefing.
It was, uh, you gave us a ton of information,
hard not to support it.
So I do support it once again, painfully, but I support it.
And that's it. Thank you, Madam Chair.
Thank you. Alderman Spaza, alderman Lawson.
Uh, we see you as a non-member. Thank you for being here.
Alderman Farrell.
Madam Chair, I just, I just have one question.
Um, what was the original ask of the plaintiff?
Sure. The original ask of the plaintiff. Yes.
The original demand from the plaintiff on this
matter was 50 million.
Um, and if I may, uh, alderman Spaza, I know that it,
it was not a question.
I just do want to note, um, that we have in fact, uh,
within the past few years, received a lawsuit
for failing to pursue.
We filed a motion to dismiss regarding that
and we were successful in our motion.
Has Officer Spilotro since been fired,
or was that just recommendation?
Sure. Um, so there's been the recommendation by copa, um,
and a concurrence by the superintendent.
Um, and as to the next steps
of the disciplinary disciplinary process,
those have not occurred yet.
Okay. Thank you. Thank you, Madam Chair. He has
Grieved his, he's grieved the decision.
So in, in terms of, um, the next steps of the,
the disciplinary process, um, I have been informed
that they are, uh, proceeding.
Um, however, I am uncertain
nor cannot disclose
what next steps may look like here in this case.
Okay. Can I get a motion
to move on this Due pass recommendation?
So moved by Alderman Lopez.
All those in favor signify by saying aye. Aye. Opposed?
In the opinion of the chair, the ayes have it.
And the do pass recommendation will be reported out at the
next city Council meeting.
Thank you, Margaret. Um, we're gonna go out of the order
of the agenda and take item number 10.
Next,
item number 10 is a substitute resolution introduced
by Alderman Irvin of the 28th Ward, calling for a fixed time
and place for a public hearing on the formation
of the Chicago Tourism Improvement District.
And the levy of transaction charges scheduled on
February 27th, 2026 at 10:00 AM at the,
uh, in the council chambers at 1 21 North
LaSalle on the second floor.
Uh, this is a substitute resolution, which has been prepared
and sent electronically to everyone.
Uh, can I get a motion to accept the substitute?
Uh, moved by Alderman Rodriguez.
All those in favor signify by saying Aye.
Opposed in the opinion of the chair. The ayes have it.
And the substitute ordinances before us.
Um, the Alderman Irvin,
before we get started,
would you please address the committee?
Thank you, Madam Chair. Uh, joining us, um, is, uh,
Mike Jacobson from the Illinois Hotel
and Lodging Association, as well as, uh, Kristen Reynolds,
who's the new Executive Director of Cchu Chicago,
which is our, uh, tourism
and, um, convention, uh, marketing agent on, on behalf
of the, uh, MPEA.
Um, this, uh, and the presentation will show, and,
and quite frankly, uh,
after being part of the Cchu Chicago, uh, board of Directors
was, uh, very happy to learn the impact
of tourism on the city of Chicago
and what it's doing to help bolster our economy.
Uh, the presentation that you will see today tells
how we can improve upon that, uh, by the utilization
of the Tourism Improvement District, which is a creature
of state statute that will allow us to, uh,
generate additional revenue to support, uh, the work up
to Chicago and the, uh, convention and Tourism Bureau.
So I'm gonna turn the, uh, presentation over, uh,
to Kristen and Michael.
Um, and this is, uh, this is the first step
of a multi-step process to get us, uh, where the, uh,
where the hotels will be able to, uh, levy this,
but again, with the approval, uh, of,
of the city of Chicago.
So, uh, Kristen and Mike,
Uh, thank you Alderman Irvin.
Um, before we get started with the presentation,
I just wanted, uh, Ms. Reynolds
to explain the substitute ordinance
so people have an understanding
of why there was a substitute.
Thank you, Alderman.
Do, and then you go into your presentation.
Yes. Thank you. Chairman, uh, Dow, uh,
the substitute ordinance adds to additional zip codes
to the district per Chairman.
Dow's recommendation in anticipation of two new
hotels that are planned for those districts,
and then would contribute and benefit from the tid.
Thank you. So good morning.
I wanna thank Chairman Dowell again for having us here.
Members of the committee, alderman Irvin, thank you so much
for your kind words and support.
We're pleased to be here today to provide the benefits
regarding a proposed tourism district for Chicago,
also referred to as a tid.
I'm Kristin Reynolds, president C of Choose Chicago,
which is the destination marketing organization
for the City of Chicago.
Joining me today is Michael Jacobson from the Illinois Hotel
and Lodging Association, and Tiffany Gallagher from CITAs.
Tiffany is an expert on tourism improvement districts
and can answer any technical questions, um,
about the experience in other markets
or questions about the district.
So we have a very brief presentation
and then would welcome your questions.
So I'll let Michael take it away.
Great, thank you Kristen.
Um, and thank you to the committee for, uh,
considering the TID here today.
It's great to be with you all.
Uh, again, I know you all,
but, uh, Michael Jacobson, president
and CEO of the Illinois Hotel Lodging Association.
Um, and on behalf of a majority
of the hotel owners in Chicago, I'm here on behalf of IHLA
to express our, uh, strong support
of the Tourism Improvement District.
Or as, uh, Kristen mentioned a TID.
Uh, I know some of you might think it's weird
because I've been up here before, uh, many times
and we're usually a hell no on any sort of tax increase
or, uh, increase to any, uh, fee that relates
to the hotel guests.
Um, but this is different for several reasons.
Uh, the TID is a self-imposed assessment on hotel stays.
Um, it's not a tax, it's directed entirely
by the hotel industry to support tourism, sales, marketing,
and business development.
It's a lockbox fund that can only be used
to drive more visitors to the city.
Uh, the funds can't be diverted elsewhere.
And this is really the way
that hotel taxes were originally envisioned,
not just here in Illinois, but across the country.
But over the years, uh, this concept has eroded.
And our current hotel tax goes to a variety
of different areas, whether that's into the general fund,
whether that's to infrastructure, in some cases, even
to sports stadiums, uh, among other areas.
We started this process coming out of COVID as a, a way
to truly recover from the devastation
that our industry experienced during the pandemic.
Um, and we passed state enabling legislation back in 2023
to allow municipalities throughout Illinois
to pursue, uh, this plan.
Throughout this, uh, the past year, we have worked
with hotel owners to educate them about the
value of this initiative.
Uh, we incorporated their feedback into the district plan
that we're presenting to you today.
And ultimately we had a majority of hotel owners sign PAT
petitions expressing their support for the TID.
Uh, at the end of the day, this is simply allowing Chicago
to level the playing field, particularly
with our major competitive, uh,
markets in the convention business.
In fact, more than 200 other tourism markets throughout the
United States already have a TID in place.
Uh, Chris and her team at two Chicago already do phenomenal
work with the resources they have,
but the fact of the matter is they're severely
under-resourced under their current funding model.
So what we're proposing here today is an assessment of 1.5%
that will be added to the guest bill
when they stay at hotels.
Uh, to be clear, this is not a tax, it will not be paid for
by Chicago residents.
Um, at least residents
that are not staying in Chicago hotels, um,
it won't be paid for by Chicago.
Businesses will be paid for by the guests of hotels.
Um, it's expected to raise about $40 million, give
or take, each given year.
Um, and the budget and expenditures
of this fund will be overseen by a committee
of 11 hotel years
who will dictate the spending based on the maximum ROI.
Uh, this committee will be decided by the hotel community
and approved by Choose Chicago's Board of Directors.
And we'll have diverse representations in terms
of geography within the district, the size of hotels,
so it's not just the big box convention hotels.
There'll be a variety of sizes as well
as brand diversity from the various hotel brands.
Uh, what the hotel community likes most about this proposal
is the accountability measures built in the TID is required
to issue regular detailed reports on its spending, and ROI.
And there are annual audit requirements for,
to both city council as well as the state.
The district only lasts for five years.
That's what we're asking for approval here today is the
initial term of the district for five years.
After that five years, we'll need to come back to you all
as well as hotel owners to get your approval
to reauthorize the district
for a new term in an absolute worst case scenario within
that five years if things go terribly wrong, which we,
of course do not anticipate, uh,
happening under Kristen's leadership at Choose.
Um, we have also have the ability
to kill the district at any, uh, time by taking a vote
of hotel owners, and we could dissolve the district
and the assessment would fall back off of the guest folio.
Uh, this slide shows you the geographic
boundaries of the district.
We are very intentional in setting these boundaries.
Uh, it incorporates hotels
that have at least a hundred rooms
or more within the zip codes, uh,
that you see on the screen here.
We are making sure that the hotels
who are paying into the district are the ones
that will benefit the most from it.
Uh, so I mentioned, uh, it's rooms, it's hotels
that have rooms, uh, with a hundred or more.
And as you can see, it primarily consists
of the central business district, the McCormick Place area,
as well as the Illinois Medical District.
After we see how the first five years go,
it is quite possible that these boundaries may shift.
Uh, but this is the right coverage area for the first term
of the district to make sure, uh,
that we have maximum benefit.
That said, uh, the benefits will obviously transcend the
entire city, even those wards
and neighborhoods who don't have hotels directly
paying into the district.
Aside from the tax revenue that the TID will re, uh,
ultimately generate for Chicago's general fund
and the broader budget, along with bringing more visitors
to the city who will be shopping
and eating in our neighborhoods,
the TID will support new jobs employing more residents
from across the city.
Uh, IHLA recently conducted a survey of our hotels
that shows that we have hundreds
of employees in every single ward across Chicago.
That doesn't even include the 5,000
or so jobs that we anticipate being added in the tourism
economy as a result of passing this.
TID uh, keep in mind that a majority
of hotel employees in the city come from black
and brown communities.
So thank you again for your support in advance of the TID.
Uh, happy to answer any questions at the end,
especially technical questions,
but I will, uh, defer over to Kristen
for the rest of the program.
Thank you so much, Michael. Appreciate you being here.
And in addition to choose Chicago
and Michael, uh, we're representing a broad
and diverse coalition of industry
and business leaders, um,
made even broader and more diverse.
Thanks to the guidance of Chairwoman DAOs, I want
to thank you for that direction.
Um, and in doing so, we represent an industry that in 2024
had, uh, more than $20 billion in annual spending
and represents more than 130,000 local jobs.
So what we're trying to do here today is continue to grow
that, continue to be competitive.
And the the reality is tourism is a very
competitive industry.
I always like to say when visitors come, they're taxed
and where they eat, sleep, shop,
and all of those taxes come to our bottom line,
and we don't have to educate them
or fill their potholes, they just leave.
And it's hundreds of millions of dollars into our coffers,
and that's why every other destination wants the exact same
visitors that we want in Chicago.
And just because Chicago is a wonderful city,
it's the best big city, United States, as we all know,
nine years in a row, that doesn't mean
that people will automatically come to Chicago.
Anyone that's tried to win business
or win an election based on name recognition alone,
we'll quickly learn that marketing matters
if you want to win.
And that's what we're trying to do here at Choose Chicago.
So I'm incredibly proud of the accomplishments
and results that we've achieved through strategy, hard work
and data driven commitments.
But our budget is a fraction of
what our competitors are spending.
Here's a, a brief look.
As you can see, uh, even markets
that are much smaller than Chicago,
with smaller convention centers
and less hotel rooms to fill,
and less local businesses to support
and less neighborhoods to promote,
have greater budgets than we do in Chicago.
So this is a very real impact on how we operate.
It means that our global marketing
footprint is smaller than other markets.
It means that we don't have the leverage
to offer convention incentives that other markets do.
And here's a great example.
Tourism is, like I said, highly competitive.
And as Michael noted, more than 200 markets already have
ts which provide significant resources
that Chicago doesn't have access to.
One of the areas that we suffer the most is
meetings and conventions.
So to give you a real life example,
we just recently were competing for a national convention,
actually a union convention that we lost to Portland,
Oregon, because Portland has more money.
They have a tourism improvement district,
and they were able to incentivize that business, uh,
by sponsoring transportation costs, reception costs.
And for our meetings and conventions clients,
their number one concern is cost of doing business.
So while we lose shows
and conservatively estimate
that we've lost nearly 2.7 million in room nights, that
that represents hundreds of millions of dollars lost
to Chicago, not just hotels, but restaurants, taxis, retail.
Um, so what we're doing is we are booking meetings
and conventions right now into 2040.
So the investments that we are making today,
or the investments that we are lacking in making today are
not only impacting us tomorrow,
but they're impacting us for the next decade.
And a TID is an investment in the future of Chicago.
And as Michael noted by state law, the TID can only be used
for very specific purposes.
We discuss sales meetings and conventions,
but also marketing.
I think it's no secret that our city and our city's brand
and reputation has been globally tarnished
and misrepresented greatly in the past
year on the global stage.
So we need the marketing dollars to ensure
that the real story of Chicago is told by Chicagoans
that people understand what our city really
is about and represents.
Chicago does mega events better than most cities,
and Lollapalooza is a great example.
But we're going to use these dollars
to invest in attracting more mega events,
especially music and sports.
We have WWE wrestling coming in in a couple of weeks.
It's gonna draw hundreds of thousands
of people into our area.
So these events have an impact far beyond their venue.
And we heard most recently from the international rugby
event that took place, that local businesses had 20% more
business and revenues than they had
during typically a slow time.
So we know that attracting these bus,
these events does impact local business.
And finally, a portion of the TID revenue will be used to,
uh, invest in innovation and technology.
We wanna ensure that we have the right tool so
that every dollar stretches further
and reaches the largest audience.
So fundamentally, a TID will allow, choose Chicago
to seize untapped opportunities and will expand our reach
and ensure that that Chicago is competing on a level playing
field across the globe.
Uh, the tid not only preserves existing jobs in tax
revenues, but will generate more jobs and more taxes.
What you're looking at on the screen
and in your packet is a estimated study by Oxford Economics
that shows that positive impacts
and revenues for Chicago over the next five years,
2.9 billion in new visitor spending
269 million in new incremental tax revenues
for this city over five years.
And more importantly, five to 50,
600 new jobs every single year as a result of this spending.
So, um, this is a tremendous return on investment,
especially since there's no risk to taxpayers
and it's a solution entirely driven by the private sector.
I wanna leave time for questions,
and I appreciate your attention.
So thank you very much.
Thank you, uh, Kristen
and Michael, um, for your presentation.
And we'll go with questions. Uh, alderman Hall.
Uh, thank you so much, um, in the spirit of my colleague,
uh, alderman, spaza, not much to, uh, question.
Moreover to, uh, say thank you for stretching
what you all do, have to not only put on some
of the best events for the country, uh,
last year you showed Chicago even brighter to the world.
So, um, great work.
Uh, and I know that you are new to the, uh, role, uh,
Madam President, but you've been doing a great job
as if you've been doing it for years for the city
of Chicago, and also to our board, uh,
great leadership from the chair all the way down to those
who have worked so diligently to make Chicago, again,
even brighter and more of a, um,
a game changer in different sectors through hospitality
as well as entertainment.
So again, um, I fully support every whicher way
and, uh, continue to do the great work to continue
to push Chicago on display
and to get more tourism into our city.
Thank you. Alderman Hall,
Um, alderman Hopkins, followed by Alderman Smith.
Yeah, thank you, Madam Chair.
Uh, and, uh, thank you, uh, Ms. Reynolds and, uh, and,
and team for an outstanding presentation.
This is not just an opportunity to create a new tool, uh,
that you've made a compelling case, uh, that we need.
Uh, but it's an opportunity
to talk in general about the importance
of the tourism sector to Chicago's economy.
We occasionally lose sight of how important it really is,
and that's reflected in the, in the lack of investment that,
uh, compared to our, uh, our, our competitors
and our, our peer cities.
Um, we sometimes have forgotten how important tourism
actually is to the vibrancy and the health of Chicago
and our economy in general.
And I commend the lodging industry.
You're taking one for the team here.
You know, what you're doing is supporting the entire, uh,
hospitality sector and tourism industry.
It's not just about heads
and beds, as you say in your industry.
It's about feet on the street.
Every visitor who comes
to our city spends money on all sorts of things
outside of the hotel.
It just has an echoing effect that just cascades throughout,
uh, our entire city.
So this is very important, um, that we pass this
and that we acknowledge it.
Um, and, and talk a little bit about, uh, the significance.
I actually learned something, uh, Ms. Reynolds yesterday at,
at your, uh, outstanding city club presentation.
Um, I, I was unaware of the fact
that international tourists, uh, spend so much more
compared to tourists from,
you know, anywhere else in America.
And not that we don't welcome them all equally.
We love them all. We want them all to come.
Um, but international tourists, uh,
stay longer and spend more.
Of course, the flip side to
that coin is it costs a little bit more to recruit them,
and it would be possibly unattainable
or unaffordable for us to really target
that lucrative international market.
With the limited resources we have,
the Tourism Improvement District changes that immediately
and allows us to go
after those lucrative international tourists that need
to hear about Chicago and need to come to Chicago.
And you talked a little bit about, uh,
the challenges therein in your city club presentation.
We all know sometimes we don't get favorable headlines.
You know, we've all seen it, we've heard about it, um,
and we have to push through that.
We know Chicago isn't always accurately
and fairly portrayed.
We have the power to change that,
but there's a price tag to that,
and this provides the funding to do that.
Um, so I, I have two questions.
Uh, the first is
where you touched a little bit about on your intention
to push through some
of the negative press and get beyond that.
Um, Chicago isn't the only city that is dealing
with challenges right now.
And in fact, when we think about what the year 2026 is going
to look like globally, you know, there's, there's turmoil,
there's uncertainty, there's instability,
there's military conflict, all kinds of things,
macro factors that are going to affect the tourism climate.
Uh, what are your thoughts on, on
how you design a marketing campaign
with those uncertainties in mind?
How, how can we convince people who might, uh,
maybe be afraid to travel for reasons
that have nothing to do with us?
Um, how do we do, you know, go after those people and,
and convince them to still take a vacation?
Thank you so much, alderman, for your kind words.
I very much appreciate your understanding of the value
of our industry and, uh, its impacts on the economy.
So, to answer your question, it is a difficult time
to promote tourism
because of every single morning you wake up
and read the paper and you don't know
what you're going to encounter.
Um, but we do it every day, and we're nimble and,
and a couple of things we've done.
And we recently launched a brand new marketing campaign
for Chicago called Never Done, never Outdone.
And that means we are hardworking, we're persevering,
we're going, we're going to shine through.
If you choose Chicago as your destination,
you will not regret that decision
because we're gonna make it worth your while.
But, uh, particularly in when faced in some of the headlines
that we were receiving that we tear gas and,
and, you know, um, pictures
that did not depict our city in a way that was realistic,
um, what we did is we decided
to launch a new campaign called All For the Love of Chicago.
And it's a social media campaign,
which we just yesterday announced.
We are including a brand new podcast that launches tomorrow.
And what it does is it gives the voice of the Chicago story
to Chicagoans takes it out of even choose Chicago.
We provide the platform, we share it with the world,
but it's anyone that wants to submit a video on
what they love about Chicago.
We wanna tell stories. We wanna,
we wanna talk about the neighborhoods.
We wanna talk about the people of Chicago
that are living here and know this city,
and make sure that what we're presenting is authentic
and in real time and relevant, um,
and cuts through the noise of some of the misrepresentation
that people are seeing today.
Um, it's a lot of work, um,
but I think it's been very well received.
Thank you for that. And my, my second question involves,
let's project a year from now,
or, uh, what, what are the, the metrics
that we will be using to measure the effectiveness
of this new, uh, tourism improvement district?
Thank you. We use, uh, several different data platforms.
Um, third party, as I mentioned, Oxford economics, tourism,
economics, because we wanna make sure that it's credible.
It's not just us providing the numbers.
Um, but as far as our marketing,
we also have several platforms that we use to ensure, uh,
our marketing attribution is being measured.
So we actually do it in real time.
We can tell you we have all of our different ads
and messages pixeled,
and we can tell you which ones are more relevant,
which ones are being, uh, responded to more.
And we can change those, um, messages or images
or marketing strategies in real time for things that are,
um, resonating in things that aren't as well
as we're looking at meetings, we have every single year,
we have additional room night goals, we have citywide goals,
we have very specific goals
and metrics that we are required to respond
to for our stakeholders.
Our hoteliers definitely make sure that we're, um,
providing the assets that they're expecting from us.
Um, so it will be a variety
of key performance indicators from social
media to engagement.
We, we track everything from, you know,
TSAs origin markets from international markets, um,
and we, we do have, um,
cover in this Tourism improvement district
to provide those metrics
and reports to the stakeholders
who will be governing the dollars.
Very good. Thank you. Uh, I have been to chew chicago.com
and signed up for the, uh, podcast already.
Uh, so thank you for that. And, uh, as my colleague, uh,
alderman Hall said a few minutes ago, you're relatively new
to the job, it seems you've been here for years already.
Uh, so you, uh, absolutely hit the ground running.
So, uh, to you
and, uh, also are relatively new, uh, chairman of the board
of, of C Chicago, guy Chip Perone, uh, who is, uh,
bringing his, uh, experience in, uh, and expertise
and dedication to the role.
I'm very optimistic about the future of two Chicago, uh,
and at the appropriate time, uh, Madam President,
I will submit a due pass motion on
this matter after discussion. Thank you. Okay.
And Alderman, if I may, just
to give you a little bit more context on the international
piece you mentioned, um,
that I think is an important data point to remember is,
of course, O'Hare airport busiest international airport in
the world, few miles down the road from us.
Um, you would think that we would be one
of the top international destinations in the world when in
fact, in, uh, in terms of overseas arrivals
to the United States, Chicago rinks number 10 currently.
So that shows you that something's not adding up.
They're landing in Chicago.
We need to spend that money,
especially in their home countries to convince them
to leave the airport even
for a weekend on their way transiting elsewhere in the us.
Just spend some time here.
And once they see Chicago,
not only are they gonna spend their money here,
they're gonna come back once they
experience it for themselves.
So it shows you the big discrepancy
between we have 'em landing here, we need to convince them
to actually come experience Chicago
instead of just heading elsewhere.
Thank you. I'd like to move on with, uh,
alderman Mitts followed by Alderman Rodriguez.
Thank you, Madam Chairman.
Um, I'm excited to hear about, um, the,
to Chicago tourism as well.
It seems like an opportunity to capture dollars that
just laying there, waiting for someone
to discover that they're there.
And I think probably a lot more that is around this city.
If we just start looking at where are they at, um, I wanted
to ask you about, as you accumulate these funds,
there are contracts that has to be let,
and I didn't really get the full understanding of
how your board, um,
do you have another board behind
and those peoples on that board?
And when you get through with all your boards,
how is it gonna translate to the public
and the community, community partners?
How are we going to work with that?
Good question, der.
So, um, in terms of the board that the first step
or the first kinda layer of accountability here is a board
of 11 hoteliers that will oversee the annual budgeting.
Each expenditure that comes from this fund, that board,
to your point, reports up
to the two Chicago board of directors.
So there's two layers of transparency
and accountability built into it itself, um,
for any major expenditure.
So if we're giving a, a major, uh, uh, investment
to a conventional organizer as an incentive to offset, um,
I'll give you one example of how this money could be spent.
If, uh, a convention organizer says, Hey, I'm choosing
between Nashville or Chicago, my attendees could walk
to the convention center in Nashville given just the layout
of their convention center, but in Chicago, we have to pay
for buses from the central
business district down in McCormick Place.
That's a $60,000 spend for us.
We could say, Hey, we have this fund that can help offset
that cost for you to make Chicago more attractive so
that it's kind of apples to apples and,
and it helps us earn that business.
For an expenditure like that,
or any major expenditure, there would have
to be a detailed ROI report
after the event that shows that it really paid off,
that it just wasn't a, a, I don't wanna say a waste
of money, but it, that it was a important
and impactful investment above and beyond that.
Then there will be annual audit, um, reports that will be,
um, uh, that will be submitted to both city council
and to DCEO at the state level so that there is
that public transparency level each year.
But then even within that year on each major expenditure,
That's what I wanted to see.
How was the transparent Yep. Going to work.
And then, um, who, who tracks
the tourism and the dollar.
So if I ask you who's tracking the dollar spent
with the Bears and everybody coming in town,
who, can you answer that?
So yes, we, we have several platforms.
One of the things we do is we track,
we don't necessarily track for different
for hotels the barrels, right, right.
But the, the, the events that we are bringing in all, uh,
in particular, um, or we have a stake in, we do track them.
We track them for a variety of ways.
We have occupancy in hotels.
We can tell average daily rate
and what they're paying as well at those hotels.
Um, we also look at, um,
flight information from the airports,
and we actually have other data where we have points
of interest that I don't wanna freak anyone out,
but we have points of interest there.
When your phone is somewhere,
we can actually track cell phone mobile geolocation data
and determine we can circulate a geofence in certain area if
we wanted to know from the convention center that week
where else they went in Chicago.
And we can also determine based on average spend,
what they spent while they were here.
So there are a lot of different tools
and metrics that we use
to provide the return on investment, as Michael was saying.
Um, and it's, it's, it's pretty exciting how,
how clear we can do that.
And then at, at will you look to grow your, your district,
I mean, at some point, add on other zip codes as you
Mm-hmm. Yeah, we
wanted to make sure that this initial term,
like again, we're still learning,
we're gonna learn in the first five years, we wanted
to make sure that it was kind of, we didn't try
to boil the ocean in our first attempt, so we wanted
to make sure that we kind of focus on the ones
that would benefit the most from this.
And then after that, fir when we come back to you
for renewal five years from now, um, I think we'll have
to reevaluate if, are there additional hotels
that have been developed that aren't even open yet?
Are there additional hotels that benefited from this
that we didn't originally anticipate?
And we're gonna reevaluate the boundaries
and the stipulations around who's to,
I I would just ask if you could look at some
of your chambers
and other business out here to take another layer of, uh,
members to get ideas from this in the various
community. Yep. So, um,
It's important to note also that there's hotels
that won't be paying into this, that will certainly benefit
from it as a result of, as a result of compression.
When we have a major citywide convention downtown,
of course, the downtown hotels are filled,
and visitors that have to come here
for other leisure purposes
or business purposes have to get a room elsewhere.
Right. And they push out not only into the
neighborhoods, into the suburbs as well.
So there's gonna be PP people
that have 10 tangential benefits from this
that aren't actually paying into it.
I, the whole city will benefit from this.
Okay. Very good. Well, Jacob, um, you can look
to put one on out in 37th walls, you know, a hotel,
you know, uh, the area somewhere with some
of this funding at some point.
Uh, include all of the city Chicago.
Uh, thank you, Madam Chair. Thank
You. Alderman. MITs,
alderman Rodriguez, followed
by Alderman O'Shea.
Thank you, Madam Chair. Um,
and thank you for the presentation.
Uh, look, tourism is an economic engine, uh, for our city.
You know, I think about, um, the number of jobs
that tourism supports here in our city.
And when I think about our ho hotel industry, that, um,
for any private sector industry is disproportionately
unionized, uh, we know there are good jobs that can be,
can benefit off of a thriving, um,
economic engine that tourism is.
And we need to fuel that engine.
And this is a way to fuel that en, uh, engine, right?
Investing tax dollars in promotion, um,
in the very, um, fabric of what you do.
You know, I think about the excellence that we're able to
get out of our local ssas
and the way in which we have excise taxes locally,
and how we're able to leverage that
to promote our own neighborhoods, I think about what kind
of scale we can achieve in downtown
with this concerted effort.
Just curious, Michael, um,
or forgive me, Mr. Jacobson, um, you know,
could you give some color to the number
of union jobs in the hotel industry and
and that would be supported in, in, in this endeavor?
Yeah. So I mean, you, we don't even like calling 'em jobs.
They're careers. Thank you.
Um, and, and the reason I, I differentiate the two is,
our starting wage in the city in hotels right now is $23 an
hour, um, far above the city or state's minimum wage.
Um, there's a, a huge path
for career advancement very quickly.
Most promotions happen within the first year, um, above
and beyond the, the benefits that come on day one,
like healthcare and travel benefits,
free meals in our staff cafeterias and so on.
So there, there is a differentiation.
These aren't dead end minimum wage entry level jobs.
Um, in terms of union jobs, uh, a majority
of our jobs are union in, in Chicago hotels.
And they, again, even though most
of our employees work in the central business district,
they live, as I mentioned earlier,
in every ward across the city.
Um, I, I mentioned earlier that the TID is expected
to add about 5,000 additional tourism economy jobs.
Um, I think because of the proportion
of jobs at our union already in our hotels, it's fair
to assume that a majority of those new jobs will be union
jobs in our properties as well.
Um, and you even look at, uh, the amount of unions in our,
our, uh, hotels,
especially in our big box convention hotels.
Uh, we have nine different unions represented in our
properties that doesn't even account for McCormick Place,
which I believe is still, uh, the, the most union, uh, the,
the facility that employs the most union
jobs anywhere in the city.
I don't, I believe that's still the case.
Um, but when you combine the convention center jobs
and the ones in our hotels
and the predominance of unions in there, um, uh, again,
it's fair to assume that a majority
of those 5,000 new jobs will be union.
Yeah. And, um, particularly I, you know,
I'm interested in the jobs piece,
but then I'm also in interested in the potential for, uh,
Excuse me, alderman Vasquez,
Uh, uh, tax dollars that potentially come out of this.
Uh, I do think there are multiplier, uh, impacts here.
And, and I'm, I'm,
I'm happy this is getting to the finish line.
It sounds like my colleagues are,
are generally very supportive.
Um, look, the last thing I'd say is I think, uh, you know,
we're in a competitive environment
and I think that cities
that invest in tourism are gonna win.
And I wanna win as a city.
I want the Chicago Bears
to be the Super Bowl champions here in the city of Chicago.
And I want our to, uh, I want our tour.
I want our tourism, uh, industry, uh, to, to, to
maximize its ultimate potential because we are a great city.
We've got so many great amenities.
We just gotta let folks know about that.
And I think this will help do that.
So thank you Madam Chair, and I'm in full support.
And if I may, on the tax revenue piece, it's important.
A lot of people say, okay, how much new hotel tax revenue is
this gonna generate as we attract more visitors here?
But it's important to remember, we have to broaden the scope
outside of just hotel tax.
I see some of my colleagues from the retail association
and the Hospitality Business Association and,
and WDI here, they're eating in our restaurants.
They're shopping in our stores,
not just downtown, but across the city.
They're drinking in our drinking establishments.
Um, it's gonna be sales tax, liquor tax,
transportation taxes,
the payroll taxes that come with the new jobs.
The ripple effect to the general fund
of the city budget is gonna be, uh, of great interest
to this council in several years.
When we start seeing the ROI payoff from this initial
investment, that's a self-assessment on hotels.
All right. We have a long agenda today, guys, so
if we can, uh, keep our questions in responses short.
Uh, alderman OSHA followed by Alderman Moore.
Uh, thanks chairman.
Um, Ms. Reynolds, I just wanna
congratulate you and thank you.
Uh, anytime you get Michael Jacobson to go along
with anything is an accomplishment.
So, uh, this is a great partnership, uh, echoing one
of my colleagues, have many of our colleagues have said, uh,
this is gonna help us in the future.
I'd also like to recognize
the gentleman in the back there, Mr.
Chip Peroni for all his hard work. Uh, thank you.
Thank you, alderman. Osha Alderman Moore,
followed by Alderman Martin.
Yes. Okay. Um, thank you all for coming before us.
I wish we could have did this outside of just a,
a regular meeting, so we won't be rushed,
but I'm gonna try to get my questions in.
Um, I'm, I'm glad you touched on this transportation cost.
So, 'cause I wanna know to understand the difference
between marketing and, and a subsidy
'cause that sounds like more of a subsidy
to me than marketing and how much
besides transportation, uh, I mean, what
besides transportation is,
is gonna be subsidized out of this as well.
Sure. Other examples of how we try to incentivize
or lure conventions is oftentimes we will, um,
provide signage for them.
If they want to help market their their convention,
we can say we're gonna, if they want a, if they have an expo
and they're trying to drive traffic to their expo,
we can provide marketing or signage or, or outreach.
We can sponsor a reception, um, that it's still beneficial
to the organization and it still has a great, um,
opportunity for us to network with them
and showcase our signage and our brand.
So it, these are very strategic ways
that we incentivize building the meetings
by alleviating some of their costs,
but not certainly writing a check, if that makes sense. So
If you can't, uh, at some point this is gonna
come up for a vote.
Right. And can you provide through the chair, um,
based on your estimate, what percentage, uh, would be
straight marketing and what Yeah.
Percentage would be what I call subsidy. Thank
You. Well, it's not this,
it's, it's meetings
and conventions, um, overall.
So some of it would go to trade notes that we would go
Down, down, just through the Chair.
Yeah. It, it would be up to, we would have
to put every single one of those incentives in front
of the governing board of hoteliers.
And then they would essentially approve whether it was the
right value and use of the dollars.
It would be a small fraction of the overall dollars
that we would use to lure meetings
and conventions, which a lot of it is, you know, collateral
trade shows, hosting site visits,
N-A-A-C-P is going to be here next week.
They come for several site visits to make sure that they,
we, they know the venues and the restaurants.
All of those things are costs that are under that umbrella.
The actual incentives would be a small portion
and would be approved by the governing board.
Break that out. That's all I'm asking.
Um, so help me understand,
any time we raise an any additional, uh,
fee surcharge at a hotel, it's gotta come
before the city council
because I just, I mean, I went to New York
and I had this thing called resort fee,
and I'm like, I don't, I'm not at a resort.
Why am I paying a resort fee?
So I, that's everything has to come to a council,
or there are certain fees you all can charge without
having to come to council.
So the resort fees are charged
by individual hotel operators.
Um, that's a business decision of individual hotels
that doesn't go towards any sort of city fund to, like,
that doesn't go to their tourism bureau.
Um, that's again, at, at the individual business level.
Um, this is different. This is something that is collected
by the city that's, um, uh, sent over distributed
to choose Chicago with the guardrails that, that, uh,
expenditures would be dictated by, um,
the Choose Chicago board
and the Board of Hotels related
to the Tourism Improvement District.
So it's, it's, those are kind of two different types of, I
I, I know that different.
I was just at my, I guess I was trying to get
to the question is that you could charge fees without having
to come through council.
Um, so what I need to understand is that, wh why do you have
to come through council for this?
Why couldn't you just charge the fee
and then you guys put it in your, um, fund
to do what you need to do?
So why couldn't that just happen?
Uh, if it's okay, I'll step in here.
I'm Tiffany with CITAs.
We're a legal consulting firm
that has supported this initiative.
Uh, so I'd just like to speak about the, the, this is a,
an assessment district that is established by state statute.
And that state statute, uh, governs those rules.
It's relative to the benefits source.
So this is a compulsory district, which means that all those
who will benefit directly must pay in.
And so that's very different than, say, a membership model
where you might have voluntary contributions.
What this does is ensure legally that the product
of the district benefits those who pay in.
And there's accountability to that.
And so there are no free riders in this program.
However, it's only in place for a very short period of time,
which is five years, which give then the benefits
to the stakeholders and the city to come back
and revisit it, to assure that, uh,
the program actually fulfilled that role.
And I get that, I guess from a, if we wanna say, uh,
used the word, um, automatic standpoint,
political standpoint
or whatever, if, um, I, I am talking to constituents
and they're then saying, okay, then why was there a pushback
on a head tax or any other tax?
Um, and they saying they can't afford it,
but they can afford it when they want it.
How do I then answer that, um, uh, in that situation?
Because I'm trying to,
if somebody's saying they can't afford something,
they can't afford it, period.
And so I,
and I know businesses, they set their business up
for marketing and things like that, and, and, and
however we call it, I mean, it just, I'm not opposed to it.
I'm just saying you, you're putting it on us.
And, um, that's that. I'm, I'm, I'm struggling with that.
Yeah, I think it's a fair question,
but I think, um, I think it's actually the, to your point,
the hotels are putting it on themselves.
I think, uh, um, alderman, uh,
or I'm sorry, alderman Hopkins said earlier,
we're taking one for the team.
Um, it is rare for a business group to be supportive
of a assessment like this.
Um, and I think the key differentiation between this
and the head tax is not only the head tax was going to be,
uh, punishing the employer
and the company where this is gonna be the hotel guests in
most parts out of town visitors that are paying this.
But the key differentiation is this being, this stays within
investing in the tourism industry,
Reinvesting, I'm just using the head tax an example.
It is to the point of what you said when you got up here,
you fight back on all the tax.
So don't I understand that.
I don't wanna get bugged or down to the head tax,
but even if someone said, let's do a, um,
increase in hotel, it's, it's pushback.
And I'm just saying it becomes a challenge
for an elected official then, then to say,
okay, but I agree to this.
And then somebody say, Hey, yeah,
they were always able to afford it anyway.
Yeah. And I, I, I guess that that's the challenge.
Yeah. I think it, it boils down to
how they're fundamentally structured attacks going to areas
outside of tourism versus assessment that, uh,
we have the safeguards
and guardrails that preserve it to not only help the city,
but also to help the industry.
My last two questions, chairman,
I hope they're my last two.
Um, the, from the marketing standpoint, um,
with tourism, can you provide through the chair
how you targeted, um, through your marketing, um,
communities on the south and the west side of Chicago?
And then two, do you all hire returning citizens?
Do we Hire, do the hotels hire returning citizens?
Yes, there are robust programs in place.
Um, obviously every, uh, keep in mind
that each hotel's individually owned and operated.
Um, so Marriott, Hilton, they don't own any
of their hotels are individually operated.
So each company has different structures of programs.
But yes, there, there are robust programs in place, uh,
across Chicago and across the country
for hiring returning citizens.
And it's been a big focus of us.
We have a new workforce development initiative
that's being funded by a state grant,
and that is one of the focus areas of, um, of that grant
And provide that workforce initiative, um, set up
or whatever through the chair.
So absolutely to know, um, um, how, um, that works.
Please. And I think I had more question,
but I lost the chairman, but I'm gonna leave it at Yeah.
You know, alderman Moore, this is, uh, the, the resolution
before us today essentially establishes a public hearing
date for the, well,
I and I, that's what I thought,
and I was like, now we hearing this
Stuff. But, but my point
is that there is an ordinance that will be
before you that actually creates the district that, um,
you'll have another bite at the apple. That was my point.
Thank you, chairman. You
Are welcome. And for the record,
that was Alderman
Alderman Hall, uh, alderman Martin, followed
by Alderman Faroh.
Thank you Chair, and good afternoon, everybody.
We've, we've, we've passed the 12 o'clock mark.
Um, as the chairwoman said, I'll,
I'll be brief in my questions,
and if any of these get into, uh, sensitive pieces
of information, happy to, um, bring it offline.
Thank you for reaching out. Um, and,
or, or through the chair.
Um, I know that there was some reporting yesterday on the,
uh, city club event, um,
and specifically talking not just about pushing this forward
in order to, um, compete with peer jurisdictions,
but also in a defensive posture simultaneously, given
that there are some up
and comers, including some folks just to the Easton,
Indianapolis, I'm curious in terms of some
of the convention incentives in particular
that they're providing, um, what are you seeing them do
and putting aside whether into
what extent you want to mirror that, right.
Where are you starting to see, uh,
their success being driven from?
Thank you, and thank you for the great
question, but it, it's similar.
So what we were talking about
before, in our competing districts like Las Vegas
and Orlando, both of which have budgets,
the top a hundred million dollars,
they will just write a million dollar check
to offset the costs of conventions.
Um, and they're, they're willing to do that.
That's not something that we would be doing.
We talked about, you know, very strategic ways to,
to lure conventions.
But what we're seeing in other,
in other smaller competing destinations now, for example,
Dallas, Nashville, new Orleans, they've all, uh,
doubled the size of their convention centers.
Indianapolis, you talked about.
They're investing heavily in their buildings to make them
as modern as possible.
And then as well, they're really sort
of capitalizing on some of the negative media exposure
that we've received as a city recently.
And, and, you know, saying that they don't have those issues
and you can come to their destinations and, um,
and again, talking about cost savings, sometimes,
depending on the location of their convention centers,
oftentimes in the city center and can save a lot of costs.
'cause it makes it walkable and people can go to a meeting
and then walk to dinner
and alleviates a lot of the cost for the attendees
and the meeting and the meeting planner.
So any and everything, it's a very competitive industry
because when you're bringing in tens of thousands of people
for one meeting, it's about a $20 million economic impact
just that week alone.
You can imagine that other destinations are willing to,
uh, pull out all the stops.
Could these funds, in theory, be used on brick
and mortar improvements as well as some
of the transportation opportunities you mentioned?
I don't think it's, yeah, Go ahead.
Uh, it, the district plan that we have doesn't have, uh,
an allocation for brick and mortar.
Uh, the law does allow for, uh, the money
to be spent on capital improvements,
but there's limitation, uh,
that the fund cannot be bonded against.
And so there's a limitation on
how much could be spent potentially
Understood. And
my last set of questions,
Excuse me, Alder Martin, what is that limitation?
There's, there's a limitation on the revenue.
Uh, it cannot be bonded against,
and so you cannot use that to finance bonds
for large capital improvements.
Okay. Thank you.
Uh, and my last set of questions around KPIs,
I was hoping you could share at least two things.
One, what's a non-exhaustive list of some
of the more notable ones, like if for a novice like me,
maybe just seeing tourism numbers increase well beyond
what we were at our height in 2019.
And then second, um, how
public will the KPIs be once they're finalized?
So we use several different data resources.
One is Smith Travel Research.
It's a national company
that tracks occupancy average daily rate
and RevPAR, what RevPAR means is revenue per available room.
That's the standard, um, metric used
to determine hotel health and, and, um, success.
We also, uh, work with the state of Illinois
and we align with them in using DK Shifflet,
which is another national research firm.
They track visitor profiles.
And those numbers are announced, um, from the state
and from our destination every year
as far as the number of visitors.
Last year it was 55 million, the economic impact,
how many days they're, they spend in the market.
So we can gauge that on an annual basis.
And then we track every single week, um, convention, hotel,
leisure, and we provide those through our extranet service
and to anyone that reaches out to us for a transparent.
Um, so that's just from a, a, a real basic metrics on, um,
how we track visitors and hotels and, um, stays in the area.
To what extent do you have goals
that you're comfortable sharing with us associated
with those helpful metrics? So
We have goals set, uh, by our board of directors, um,
that is made up of a variety of people, including hotels,
unions, local businesses, um,
and those annual goals are based on, again, we look at a lot
of the trends that the data companies provide to us,
how conventions are trending, how leisure is trending,
and it's room nights, it's number of meetings booked,
different sizes of those meetings.
Um, and so we have those goals.
We also have a separate set of goals through a contract
that we have with the MPEA, um, the number
of citywide meetings that we get through that,
that we're expected to bring, um, through them, as well
as the number of leads that we are expected.
And we, we can bring leads.
They don't always translate into confirmed business,
but we have a variety of those goals that,
um, are updated every year.
The governing committee have those position
or those, um, representatives been finalized yet?
No, once, uh, the district is formed and,
and passed by city council, then um, there will be an, uh,
a selection process that's dictated by the hotel community.
Those 11 hoteliers then once nominated, will eventually be,
uh, voted upon on, at,
by the two Chicago Board of Directors.
Great. And if you could, there's lot of interest. I
Can imagine if you could provide that
through the chair when it's ready, just
to ensure it makes our way to us.
I'm sure it'll get publicized,
but still coming through the chair would be helpful.
And that's all. Thank
You. Thank you. Alderman
Martin,
alderman Talia Farrell fo followed
by Alderman LaSpada Alderman Lee.
We will count you towards Squam.
Thank you Madam Chair.
Um, I just have a couple of questions regarding the, uh,
1.5% assessment.
Um, how is that 1 5, 1 0.5% assessed, or how is it set?
Is that a cap or if there's a need, um, in the future to,
um, increase that?
What does that process look like?
Good question. So, um, yes, it would be the,
it would be kept at the 1.5%.
It wouldn't be able to go down
or up for the first five years for the duration
of the term that you would all approve.
Um, after, when we come back for renewal,
we could decide does it need to go lower?
Does it need to go higher? How, how has the ROI been
for the funds that have been raised?
Um, we, we've spent,
we are very intentional in setting this, knowing that, um,
we, we really don't want to go above that 20% threshold
of total burden, whether that's ta a combination
of taxes and assessments.
Um, we're currently at 17.5%.
This would bring us to just under 19%, uh, with this one
and a half percent increase.
And so, um, the, we're the hotel community felt comfortable
with at that 1.5% generating enough money to be able
to show a positive ROI,
but not going above that 20% threshold.
But, um, the process to raise it, if we wanted
to raise it within that five years is we'd have
to start this whole, do this whole process over again,
go back to owners for a new approval,
go back to city council.
Uh, frankly, it would be more prudent just to wait
for the five year duration of the initial term
and then handle that during the renewal five years from now.
Okay. And is that 1.5%, is that assessed against, um,
just lodging or would it be assessed against lodging, uh,
restaurants or any of the other amenities
that a hotel may offer
Exclusively lodging.
And it's important to note that anyone that's, um, uh,
exempt from the state lodging tax would
also be exempt from paying this.
So permanent residents that might be living in hotels
or things like that, they would not be assessed this if
they're exempt from the state lodging tax.
And, and lastly, and I certainly
appreciate your presentation.
Um, is there a possibility in the future that,
that this can be assessed against any other entities
outside of lodging?
According to state law, no. It's exclusively lo lodging.
Thank you so much, and thank you Madam Chair.
Thank you. Point of information, alderman Moore,
Airbnbs, Or no, no, just hotel stays.
If they have a, a hotel license under the hotel
license structure.
Thank you. At 125 rooms or more,
Is that a hundred or more a hundred hotels with a hundred
or more within the geographic boundaries.
Okay. Yes. All the mentality Farrell
And, and I was very brief actually.
Uh, does the assessment
or, um, does this fund pay any salaries?
And if so, um, how much of that goes towards salary
and administration of the fund?
Sure. So when you double the budget of choose Chicago, uh,
for marketing for sales, we would,
we would certainly need additional resources in order to,
um, execute those programs.
So there's not a specific amount in there for salaries or,
and it's not hotel salaries.
It would go to, to Chicago in order to be able to make sure
that we're able to execute, bringing in more meetings
and more conventions, which usually would take salespeople
or marketing experts to do that.
Thank you. Thank you, Madam Chair. Thank you.
Alderman Lasana. Alderman Curtis,
Thank you. Followed
By Alman Vasquez.
Thank you. Mad having chairman. Uh, congratulations.
Um, this is great to hear
and, uh, even to talk about, uh, um, it reminds me
of World Business Chicago,
and they should definitely piggyback off
of everything you guys are doing.
I, I think that, I don't know, maybe you should reach out
to him soon, but, uh,
you guys are definitely headed in the right direction.
I got two questions and I'll put 'em together
and so you can answer, so we can get through this quick
one was, um, when you decided to put all of this together
and you went out to talk to all the individual owners
and operators, uh, did you get any pushback at all?
And also, um, wraparound support,
if you could talk about that a little bit?
Yeah, I could talk about the history of kind of going out
to the ownership community.
Um, there were a lot of questions, don't get me wrong, um,
um, from our hotel ownership community.
Um, but not, not only did we garner eventually,
like it took, took a lot of conversations and education.
Um, we were able to obtain far above the, uh,
required majority proportional
vote of the ownership committee.
Um, to date, we have not had a, uh,
any owners flat out opposed to it.
Again, we didn't necessarily hear from all of our owners,
uh, that we petitioned.
Um, but nobody came out in stark opposition to this.
It was a lot of, uh, answering questions, education,
but all the ones that did come to us,
we eventually were able to convince
that this was the right one and they,
they approved their petitions.
Mm-hmm.
And then wraparound support,
you mean the coalition that we built?
Yes. Yes, sir. So, um, we have been reaching out,
we have over 1600 members for two Chicago
of local businesses, attractions, restaurants
that participate in our organization
for our resources and benefits.
So we have been reaching out to them, communicating them
to them about this opportunity.
Everyone knows that we're before you today.
Um, we continue to grow our coalition every single day from
everyone from, again, local restaurants, to candy shops
to museums that understand
that when we're promoting Chicago,
that their business benefits
Visits such a great benefit for Chicago.
And I wish you well.
I, I'm, I'm excited to hear more about it
during the next process.
Thank you, Madam Chairman. Thank you. Alderman Curtis.
Alderman Vasquez, followed by Alderman Conway.
Thank you, Madam Chair. Uh,
really greatly appreciate the presentation,
but more than that, the work done, I think for me, um, uh,
we've had conversation before and not a lot of people come
and say, please tax us some more.
So that's always helpful.
But what I appreciate is the accountability in place that
those funds go to people who know how
to capitalize on the funds that are being presented
and are open to the accountability of reporting back on
how we're doing as far as KPIs and metrics
and auditing for success.
I think having that quarterly is a model
that it works in corporate all the time.
We need to see more of it in government.
So to kind of see that being instituted is something I
greatly appreciate.
Um, I will keep that part tight, add a plus one
to all the amazing comments for the work being done.
Uh, two questions I have.
I know one Alderman Martin had asked a little bit as far
as like some of those funds potentially being there
to support other hotels, motels
that are not necessarily in the district.
And if there were any levels of like grant programs
that may not be capital in nature,
but might be something else to support if this, any of
that currently exists or could be something to be built.
I think, uh, again, the, the geographic
and the stipulations of the a hundred rooms
or more in the geographic
boundaries are set in the district plan.
That's what we want to petition for.
Um, so it's, we're not able to change the,
the geographic boundaries at this point.
Um, not to say we can't reevaluate that
after the initial term, which will go faster than we think.
Five years sounds far off, but it'll go very quick.
That said, keep in mind that choose Chicago has existing
budget, um, their budget already.
Um, and this will even potentially free up some additional
resources within their existing budget to be able
to help choose.
Chicago's mission is not changing, to only help the hotels
that are paying into this district.
This funding will help the hotels paying into this district,
but they, 50% of their budget will still be what they're
existing, um, charter and mission is to do.
And that's to help every tourism entity across the entire
city, including those smaller properties.
Yeah. So, so I think, I think kind of in that spirit,
which really was kind of more the question is like do the
chair of what it currently exists,
because I think some of us may not
know what's possible there.
Um, I think similarly, uh, we do a lot
and I appreciate the true Chicago marketing getting
information out to get people in other cities,
other countries to come check out Chicago, right.
Partnership with World Business as well.
But there's also just Chicagoans that I think
gaming through the challenges people are gonna have
'cause of the cost of everything going up.
There might be something
where somebody's taking a vacation downtown rather than
flying somewhere and figuring out a four day weekend.
And so kind of identifying what the marketing
and opportunities are for like
Chicagoans to maybe take advantage.
And also looking at the ward offices
of potential distribution points for information
so our neighbors can also realize like
what opportunities are available for them.
Thank you. So we do, actually, we have,
it's a big strategy of mine in particular is looking at the
local market as well as the drive market, which we're,
we define as five hour radius of drive potential
because the way it typically works in their destinations
is in your peak season.
So during the summer months when rates are highest
and we're glorious, people will come from furthest away.
That's when you want those international visitors,
people from Atlanta, for people from uh, California.
That's when we're targeting those people.
But then the lower seasons when you never know when you wake
up that morning and there happens to be a blizzard happens,
Right? Every once in
A while. Yeah. We can still
know
that this weekend is gonna be a great weekend
with the Chicago Bears and the Blackhawks
and we can attract quick people
to come in from the suburbs or drive markets.
And so that's when you'll see our marketing shift Sure.
To locals as well as the, the drive market.
But if you look at the bus shelters
and a lot of the JC Deco digital marketing, um, billboards,
we actually are in place in the local market
to encourage Chicagoans to go out, great,
have a great dinner, see a show on Broadway,
and, um, enjoy, enjoy their own city
where they people come from all over the globe to visit.
Is there something kind of similar along those lines,
like an event calendar, right?
So that thing we can get out to neighbors as well.
'cause I just think like everyone's just
trying to pay their bills.
Yeah. And make it check to check
that even if we can serve some sort of purpose to kind
of tie that together, I think it's an added
benefit for neighbors.
Thank you. Um, separately, uh, along those lines,
and this is a quick to Chicago, love
to figure out a conversation
and rely, uh, regarding merchandising
because I think the city could position that.
And then if we had the hotels as distribution points,
similarly find other ways
to grow ancillary revenue even for the city.
Because I think we look at these assets, we look at
how people even support their sports teams and logos
and everything else that the city is in
and of itself, that kind of asset
that we should be leveraging in that way.
And so finding opportunities to partner in
that regard might be lead to some level of success as well.
I think that's great. Thank you. Our new, um,
2026 Travel Guide comes out February 2nd.
We will distribute them, uh, gladly to your offices.
We also have, um,
everyday updated calendar events on Choose chicago.com.
We have a variety of social media
channels, all for the Love.
We have a new podcast. We're talking about things to do,
which is totally free for everyone to access.
And, um, merch is on our list to, uh, to,
we've had such a great outreach.
People want to wear all for the love of Chicago merchandise.
It's a great revenue generator.
And, uh, what we call them in the industry is human
billboards, when people are wearing our
brand and are, are saying.
So thank you on our list.
Get the summertime shot t-shirts out here.
Thank you for everything.
Uh, look forward to supporting it
and look forward to future conversations.
Uh, I'm really appreciative of the efforts
and I think it's something we should all be very proud of
as far as Chicago's improvement
and being able to leverage us as a city.
So thank you very much. Thank
You. Alderman.
Alderman, vice Chair Conway.
Yeah. My, my question was answered.
I would merely say to my colleagues, this is a big deal
for downtown Chicago and the, and the 34th Ward.
Um, it includes my, in my entire ward.
In fact, I've certainly been supportive of this effort from,
from the get go and wanted to make sure I thanked, uh,
chairman Irvin for quarterbacking this within city council
as well as, uh, thanking Chu Chicago.
Kristen, you and Chip have hit,
really hit the ground running, so I wanna make sure I thank
you and Michael, always appreciate you and the Hotel
and Logic Association, your and your steadfast leadership.
And I'd ask that, uh, uh,
everyone in this chamber support this effort.
Thank you so much, Madam Chairwoman. Thank
You, alderman Riley.
Thank you, Madam Chair.
Um, I'll save my more extensive comments
to when we actually have an ordinance in front of us.
But likewise, wanna say thank you
to the great leadership at two Chicago,
and to refocus this really quickly on the fact
that we're in an arms race with our competitors here.
Um, Chicago has always been near the top
of the pack in convention and tourism,
but, uh, all these new tools, especially ts,
are putting at a, at a significant competitive disadvantage.
And so, uh, we need to keep up
with the Joneses, so to speak.
Um, and the fact that we're losing $2.6 million, um,
room nights, uh, to our competitors, drives me crazy as much
as it does when I see construction trains in other cities
around the country that should be here.
Um, and so the fact
that the industry is taking this upon themselves
and willing to shoulder this extra financial burden
to reinvest in promoting our convention
and tourism economy, I think is really
important to note here.
Um, one very quick question for choose, and,
and I think this is probably best for you Ms. Reynolds, is,
um, could you give us a sense of, you know, I, I know
that we've been losing a bit of ground
because we don't have these types of tools.
Um, what's happened in the last 10 years
to our standing when it applies to
competitive cities like Orlando, Las Vegas, and New York.
Thank you very much for your kind words
and for your support of the organization.
Um, you know what it actually,
it it's become increasingly challenging every day
with those kinds of competitors that you mentioned,
Orlando, Las Vegas.
Of course. When, when they are eclipsing us in budget,
our budget is a one fourth of what theirs is.
It's almost like impossible
to even try and compete with them.
We are now in a position that
because of the lag time here, that we are competing
with secondary markets.
Boston just got aed, Dallas has aed, Seattle has aed.
So that's now we've actually lowered our competitive set
even though we have the largest convention center in North
America to be with second tier markets
because they're coming after our market share.
So this will allow us, again, to take the reins of
where we should be aligned
with the top destinations in the country.
And to best illustrate the contrast in in marketing spend,
um, what, what are we currently spending
annually on marketing?
About 34 million, well, 34 million total.
Okay. So 34 million.
And what is Las Vegas spending annually?
About 105 million. Sorry, 105 million. Yeah.
So, uh, that I think tells the story right there.
Um, and I'm also really glad that you mentioned JC Deco.
Um, so we have their infrastructure here,
but they have a global network
and, uh, I think you all remember not that long ago,
I encouraged a direct conversation with Deco
because they can serve up free media impressions
for the city of Chicago and shoes throughout the globe,
and especially in the Asian
and European markets where we have the highest value
tourists and visitors.
Um, and so I just wanted to explain to people
that while we have this infrastructure here in the city
of Chicago, um,
that infrastructure is being leveraged in other global
cities to promote us, correct?
Yes. Thank you. Um, in fact, the marketing
that we do globally through JC Deco is currently
with our budget, almost the only marketing we can afford
to do in our primary markets.
Um, so it is right now our saving grace
And we get a lot of free impressions, millions
and millions of them, because we have them as a partner here
with our outdoor advertising.
Okay, great. Well, look, um,
I fully support this initiative.
I'm glad to hear that. It sounds like most of my,
my colleagues do as well.
And I think this is really gonna be, um,
critical in giving us a, a leg up in competing with, uh,
some of these other cities that are trying
to grab it, our market share.
Thank you Chairman and I support the ordinance.
Uh, thank you, uh, alderman.
Uh, before we have, uh, alderman, uh, vice, excuse me,
chairman Irving close on this matter.
I wanted to also express my enthusiastic support for this
and to say, Ms. Reynolds, when you came to talk to me about
this initiative, I'm like, why haven't we,
why haven't we done this?
It's like a no brainer.
Um, so I wanted just to acknowledge that
I did have one question.
Um, Chicago, you know, is a great city.
It's a diverse city, diverse neighborhoods, diverse people,
um, and $40 million,
which this will generate is nothing to sneeze at.
It is, and while I understand it is private dollars,
it's not the city dollars or state dollars.
I wonder if you could talk about your approach to diversity
and contracting
and, um, how you model that currently.
And if we can get some data, uh,
before we vote on the full package
on how you spend your money today.
Thank you. Thank you for your support, uh, chairwoman.
So, yes, we actually just recently, um,
created a new department at two Chicago called Tourism
Inclusion and Community Engagement, um,
where we had our long time, uh, DEI director promoted to VP
to lead, uh, an organization,
a department in the organization that includes, um,
neighborhood engagement as well as cultural tourism.
It's really exciting. It's, it's one of the best things, um,
we have as an asset is our diversity
and our culture in Chicago.
It sets us apart from a lot of other destinations.
So, um, in doing so, we also track the number of partners
that we have that are diverse businesses.
We track that every single month, um,
against goals that we have.
Happy to report that out to, to the committee.
Um, and then we also look at all of our contracting
and, um, definitely provide higher weight to, uh, women
and minority owned business companies when looking at
the contracts that we hire.
So it is, it is part of our integrated, um,
procedures at the organization.
And would you be able to provide through the chair, um,
information about what that looks like
for 20 25, 20 24, just so we get a sense of,
uh, um, how you're following through on
and modeling, uh, diversity and contracting?
Yes, ma'am. Thank you. Alderman Moore, point of information
and then Alderman Irvin to close.
Yes, yes. That's on top of that.
And that's what I was forgetting
and my, that the, um, the board of directors,
you know, a, um, a chart of the board of directors and its,
and its members, but also, um,
and I don't know how many people choose Chicago employ,
but the ones that's making over 75,000 and more.
I'm gonna be more specific.
And, and, and I appreciate you going there, chairman,
but that was one of my questions, 75,000 and more
and where, you know, the communities, those, um, residents
that you hire, um, in from two Chicago making 75,000
or more, what zip codes do they come from?
Thank you. Alderman Moore, alderman Irvin,
before you start, I just want to acknowledge, uh,
alderman Maria Hadden, welcome back.
Welcome back. We missed you.
All right. Uh, alderman Irving to close.
Thank, thank you, Madam Chair.
Uh, just one thing I I do want us to understand, uh,
Ms. Gallagher, if you could, uh, lay out the balance
of the process from this point so that there's some clarity
as to what the next steps are
and, uh, when this ultimately, uh, comes online, uh,
pending, uh, council approval.
Sure. Happy to, uh, following the passage
of the resolution of intention,
there would be a public hearing set
and noticed there has to be 30 days in between the, uh,
mailing of the public hearing notice.
And so once we hit to the public hearing notice,
we have the opportunity for objections
and also for support within that 30 days.
And then formally at the public hearing, uh,
following the public hearing, the ordinance can be placed up
for vote and approval.
Tiffany, can you just lay out the 60 day window,
let them know that from the petitions have been filed.
Oh, back solution of intent. Understand, uh, right.
60 days, uh, is the minimum req requirement, sorry,
maximum requirement of seeing this in front
of counsel from the time that the petitions were submitted.
And I'm sorry, I don't have that date. 21st. Okay.
Okay. No, that was, I just wanted, uh, members
to understand the balance of the process
as this, uh, moves forward.
So next, there'll be a hearing, uh,
which is currently scheduled for the 27th of February, uh,
here in chambers,
after which, uh, there'll be a ordinance that would be, uh,
brought forth back to this committee, uh,
for review and approval.
And I believe you all could, if that follows, that timeline,
could begin collecting somewhere near April, May-ish,
if I, if I remember correctly.
Okay. Alright. And again, uh, thank you to the staff
and, uh, everyone for, uh, for bringing this forward also
to, uh, chip and, uh, Jevon for their work on, uh, on this.
Again, uh, this is, uh, in my opinion, a game changer, uh,
for the city of Chicago, for our tourism
and for the ability to generate
additional resources and jobs.
Uh, as you can see, uh, bulk of these jobs
and things that will be created, uh,
actually aren't just specifically
for the central business district,
but, uh, this industry permeates throughout our city and,
and supports lots of, uh,
individuals in the work that they're doing.
So, with that, I, I would, uh, ask for, uh,
DOPA recommendation, uh, from the committee.
Thank you, alderman Irvin, uh, hearing, uh, motion made
by the alderman in favor of this item,
please signify by saying Aye.
Aye. Opposed? And the opinion of the chair, the ayes habit,
and the substitute resolution will be reported out at the
next city council meeting.
Thank you all. Uh, going back
to the regular item on items on the agenda,
let's see, where were we?
I think items three and four.
Okay. Item number four, we're gonna hold
in committee item number five, we're holding in committee,
which brings us to item number six,
which is from the Department of Housing.
It's a substitute ordinance concerning the execution
of a tax increment financing redevelopment agreement
for 30 North LaSalle MF redevelopment, LLC,
and downtown Chicago Neighborhood Council NFP
for the property located at 30 North LaSalle Street
and the 34th Ward in an amount not to exceed 57 million.
Uh, there is a substitute ordinance, which was prepared
and sent electronically to everyone.
Is there a motion to accept the substitute ordinance?
So moved by Alderman Mitts.
All those in favor signify by saying Aye. Aye. Opposed?
In the opinion of the chair, the ayes have it.
And the substitute ordinance is now before the committee
and will be explained
by Dina Wayne from the Department of Housing.
Thanks chair. The substitute ordinance was to correct some
of the affordable unit numbers in the unit mix.
In the ordinance. We had the total number
of affordable units at 105, correct,
but some of the AI a MI percentages
and the number of units corresponding to that was off.
So that's corrected in the ordinance that you have
before you we're here today
to discuss the proposal at 30 North LaSalle Street
and to authorize the, uh, the amount
of $57 million in TIF from the LaSalle Central TIF
District for this project.
It is in Alderman Conway's Ward, uh,
obviously the South central Tiff,
and that Tiff expires January 30, uh, sorry,
December 31st, 2030.
Here are some of the LaSalle Street, uh,
projects outlined in red
with the LaSalle Street project being the most northerly,
uh, project in this, uh, LaSalle Street area.
Go and company will be the lead developer,
and what they're proposing is to adaptively reuse
and convert floors three to 18,
which is currently the whole building is an office building
except for commercial on the first floor
to convert those floors
to a 349 unit residential development,
105 of which will be affordable units.
Uh, they will be a RO units
and 244 will be market rate, again,
$57 million in tif,
and a total project cost
of
$132,643,066.
They're expecting to close in quarter two of this year,
can start construction in about May
and finish in quarter four of 2027.
Uh, again, the development team, Gallup
and Company is the lead developer.
Solomon Cornwell Bends is their architect.
The general contractor is a joint venture
between Power Construction Company
and Toro Construction Corporation,
DLA Piper is the attorney,
and they're looking for a lender at this point.
Here's a, a picture
or a drawing of the building that shows the breakout.
Again, commercial on the very first floor, uh, resident
or leasing offices on the second floor.
And then again,
that area in yellow would be the proposed area.
That's going to be com, uh, converted to residential.
Here are some renderings of the building upon completion.
In terms of the total project budget.
Uh, a portion of this will be be equity, which will be,
we expect a historic, uh, tax credit investor
who will come into the project.
The building is on its way to being landmarked.
We expect that to be introduced to City Council, uh,
in February and come out in March.
And then it would be eligible for historic tax credits, uh,
a $49 million loan, a small deferred developer fee,
and again, the $57 million in tif.
Here you can see a breakout of the unit mix.
Uh, it's, the building is primarily studios
and one bedrooms with a sprinkling of two bedrooms.
Um, again, 105 affordable units
and 244 market rate units.
You may recall this chart from others
of the South Street projects that we've brought before you.
We had a, um, consultant ACOM who looked at the,
the current market rate and affordable rents in the loop.
And this just shows, uh, how the, the gray column on the,
to the furthest right compares to the, uh, market rate
rents, um, for class A units in the loop.
And for LaSalle Street,
the public benefits the 105 affordable units in the loop,
uh, 349 total housing units.
And again, this is part of this whole larger, um, effort
to revitalize loop that currently has,
especially LaSalle Street, so many empty, uh, office spaces.
So bringing a lively presence downtown on LaSalle Street,
there are gonna be energy efficiency upgrades, uh,
street scape and retail upgrades.
Uh, there are different ways that they're complying
with sustain sustainability project.
For the commercial project, which is not, which is part
of this building, but not part of the tiff, um,
they're going to have either lead or well meet, go lead gold
or well building standard.
Um, and in terms of the residential portion,
they're going exceed the energy transformation code by 5%,
have native landscapes.
They can also get points as well
for having a hundred percent onsite a RO units in a transit
served location, 80% wastewater diversion
and indoor water use reduction by 25%.
They'll meet the typical 26% MBE
and 6% WBE requirements, 26 full-time,
uh, equivalent permit.
Permanent jobs are expected and 300 construction jobs.
In terms of the tiff,
we anticipate it being paid out in three, uh, installments
during construction, and one funded
at certificate of completion.
There will be a recapture mortgage, uh,
to mitigate the city's risk, uh,
should the building not be finished.
There will, uh, be a flip provision
and profit sharing arrangements if the developer were
to sail the sell the building
within a certain period of time.
And this is consistent with the other requirements
that we've, um, with the other LaSalle buildings
that have similar requirements.
Again, the a RO units, there will be the,
the typical inclusionary housing agreement, um, for 30 years
to keep those units affordable.
And the city, uh, residency
and prevailing wage requirements will also be in place.
Again, the timeline closing in quarter two,
starting in quarter two of this year,
and finishing, uh, at the end of 2027.
So again, we're here to ask for the $57 million in TIFF
to support this redevelopment.
And it would be, uh, for the downtown Chicago neighborhood,
NFP and the 30 North LaSalle mf Read redevelopment.
LLCI know I'm joined by, uh, in the gallery members
of Power construction, uh, the developer, Colin McKenna
and Lee Gob, uh, their attorney.
And then DPD is here as well
to answer any questions. Thank you.
Uh, thank you, Dina.
We have a letter of support from Alderman Riley
who shares 57% of the TIF district,
and, uh, this is located in the 34th ward, which,
uh, has 42% of the tip district.
Um, so would you like to close or, we've got some questions.
Okay. Alderman Lata, followed by Alderman Viegas.
Thank you, Tara. Uh, I wanna say great project,
like beautiful building, great unit mix.
It feels like the cost numbers we wanna see.
I, I, uh, bill,
I could not find a two bedroom in Logan Square for the,
for the rents that they're putting up there.
So like, I love it.
And I feel like we were here a couple years ago
with comparable project, with someone saying, nobody wants
to do two bedrooms.
Families don't want to live in the loop.
To see more developers coming in
and doing like a broader size range of units mm-hmm.
Feels fantastic. I had one question.
Um, I had not understood these flip provisions
and profit sharing arrangements before.
Could somebody explain how that works?
Can I call on you, Jeff, from DPD to respond? Thank you.
Can you hear me? All right. Jeff Cohen,
deputy commissioner, DPD.
So the, uh, profit sharing
and flip provision is a mechanism
where the city can participate in the upside
and over performance of these assets.
In the event that the development team elects
to sell the property prior to the expiration of the RDA, uh,
what we have structured here are certain internal rate,
internal rate of return thresholds that if they were to over
to achieve above those, that a certain percentage
of those funds would be repatriated back to the city.
And that's if they sell
before the termination, the end of the RDA.
Correct. What's the term of the
RDA? It is 10 years.
Interesting. Fascinating. Thank you. Thank you Chair.
And, and Jeff, this is not a new,
um, no, it is not element.
Uh, these have come
before they've been included in other deals.
That's correct. Both out of housing
and out of planning and development.
Correct. Uh, alderman Viegas.
Thank you, Madam Chair. Um, has my question.
Uh, I support the project.
My question is around the, the property tax revenue,
and has there been an analysis on all
of the deconversions from, from, uh, commercial
to residential?
Uh, and what's been the loss of property tax value, um,
within that corridor or within,
or within these deconversions?
I know that there's a different tax rate,
and I'm just curious as to what the impact has been for,
um, for the city.
Do you Have those numbers in DPD by chance?
Uh, again, Jeff Cohen, deputy Commissioner with Department
of Planning Development, um, we don't have the exact, um,
number that is being essentially, so to speak,
lost from the de conversion of office space.
What we do have is the projected tax revenue to be generated
by these re stabilized projects.
Um, if you are seeking an analysis of that differential,
we could respond through the chair.
Yeah. If you, if you wouldn't mind responding
through the chair, not just for this one,
but just the whole strategy around the deep, you know,
the conversions from commercial to residential.
I know that, um, some of these properties have,
have commercial properties, have had challenges,
and I know that the strategy has been to fill 'em up,
which is I appreciate just, just wanting to know what that,
what that impact is.
Um, given the fact that the central business district has,
has seen a, a decrease,
and it ultimately hurts the neighborhoods, right?
Because the property tax needs to be paid from somewhere.
And so as you're squeezing that balloon,
that air is going out into the neighborhood.
So just wanted to see what the impact is on that.
Absolutely. Thank you. Thank you, Madam Chair.
Thank you. Alderman Viegas, vice Chair Conway to close.
I, I, uh, actually can respond a little bit
to Alderman Viegas query.
Uh, I will tell you that, um, when I first became Alderman,
the las, the LaSalle, uh, street Tiff was projected
to churn out about 170 million here in 2025.
And the number ended up being like 125 million.
But that was more due to how values have fallen.
You know, the, the, the value
of a vacant office building is of course not high.
So part of this is overall is to, is to, um,
help over time bring more property tax
revenue in, in over time.
And I think I have seen an analysis that it do.
It is doing it net net at least with regard to some
of the Class Ls that we were looking at in conjunction, uh,
with this, I, I would, I would merely say I,
I'll save you my full LaSalle Street rants
'cause you've heard it a few times, but I would merely say
this is an important project
as we convert a struggling central business district into a
vibrant multi-use district.
We obviously have too much office space
and not enough housing, and we're solving,
we're improving both of those problems through this project
and this and this program.
Um, some other things I'd note, um, in a place that,
in an area of the city that sorely needs it,
having 349 additional housing units at 105 affordable is a,
is a great thing that will resonate,
uh, throughout the city.
I also fully anticipate after speaking to the, uh, developer
and, and, uh, prime contractor, that those MBE
and WBE, uh, allocations will be exceeded in this, uh,
despite not being required to do so.
Um, and I would, I would merely say that, you know,
the plan here of this program was to do some projects
so we can catalyze this conversion
of moving from, um, the adapt
or having the adaptive reuse
of office space becoming residential.
And we are beginning to see that there are units
that will come, come online here
that will not have to be subsidized.
So this, this program, um, does appear to be working.
So I really want to thank, uh, the Department of Housing
and Department of Planning and Development.
I could go through all the names in the box.
I know you've all done done yeoman work.
Um, but I just on behalf of myself, the 34th Ward,
downtown Chicago, and the how that impacts all
of the neighborhoods and every part of this city.
I just wanna thank you all for your hard work,
and I want to ask everyone on the committee to support it.
Thank you. Madam Chairwoman.
Uh, thank you. Vice Chair Conway.
Uh, chairman Irvin stepped back in
and I believe he had a question. Chairman Irvin?
Yes. Thank you, Madam Chair. My apologies.
Uh, and you guys have gone over this.
I, I'll deal with it, uh, uh, directly with the staff.
Uh, I, the level of the projects downtown, number one, uh,
number two, the affordability,
and number three, uh, who are the partners as far
as doing MBE, uh, WBE type work here?
Sorry, what was your, the first part
of your question, affordability
Number one is just the 20%.
Uh, is this a 20,
30, 30% of the units will be affordable?
Oh, 30. So yeah, it's a slightly higher, uh, a RO percentage
that was negotiated for all
of these LaSalle Street projects.
And that's a, a median, um, a MI of six
of 60% or below.
They all have 60 or below. Yeah. Okay.
And then the, uh, uh, M-B-E-W-B-E.
So we have members from power construction
who can speak to that.
I don't, um, so it's power
and Toro are the, are the general contractors.
I don't think they've let their, uh,
subcontractors, you know, out yet.
Uh, is there somebody here who could respond to
that from the contractor or the developer?
Whoever. I'll, I'll do a little vamping. Oh.
Or the attorney. I'll do
a little vamping while they walk over.
Uh, alderman Irv, if
I, I understood the question correctly.
Um, the, the M-B-E-W-B-E participates,
Excuse me. Can you
identify yourself for the record and speak up?
I don't. There we go.
Uh, my name is Mariah Dino with DLA Piper,
uh, attorney for the applicant.
Uh, the project will be subject
to the city's M-B-E-W-B-E participation requirements of 26
and 6% of at least 26 and 6%.
Um, as Dina noted,
the develop the co general contractor power is, uh,
in entering into a joint venture with Toro.
Uh, and then we'll also achieve participation, um,
through the subcontracting
and power is here to speak further to the details.
If there are additional questions.
Is that one? Are both, are both
of those signatory companies or not?
I'm sorry, what was the question?
Are both, are both partner signatories
To Both GCs?
Yes. Yep.
So, Sean Glorias, I'm, uh, with Power Construction. Did you
Say your name again? I'm sorry.
Yep. Sean Glorias with Power Construction.
So, uh, power Construction
and Toro Construction are both union signatory, uh,
power signatory to five different unions.
I'm not sure about Toro. I think it might be one or two.
Uh, Toro is our joint venture partner on this one.
Uh, Toro has been, um, has served on a number
of different power construction contracts in the capacity
as a carpentry contractor.
Uh, they've been expanding
as a general contractor over the last couple years,
so this is our first opportunity to partner with them,
uh, in that capacity.
So we're excited about that.
And are you all using, um, uh,
diversity consulting on locating, uh, what I'll call, uh,
right size contractors for the work
that you're doing in the MBA community?
Uh, we are not using a consultant on this one.
Uh, we are involved in a myriad of activities related
to recruiting MBWB contractors.
Uh, right now. Uh, we are partnering
with all the diverse contractor associations.
I'm their quarterly to meet
with their new members, try to get them in the fold.
We have a process internally, uh,
called our contractor onboarding process,
where newer contractors,
usually smaller MBWB contractors
never worked with us before.
Uh, we're bringing them through a two day exercise, get them
situated with power, learn how we operate, learn
how they can best engage us on bidding opportunities.
We're bringing those same contractors back in twice a year,
uh, for in-person networking session where they meet
with all of our project teams
that are bidding out work on an annual basis, uh, to try
to expand the number of bid opportunities they have.
In addition to that, we're doing a bunch
of internal trainings as well
to increase capacity contractors
around specialty contractor divisions.
Um, we did one last year with Federation
of Women contractors members
that were interested in bidding more healthcare work.
Um, this might be a good opportunity
to do a training on converting an office building into
an affordable housing project.
And so, um, there's, there's a number of ways
that we're interfacing with the NBWB community
and we're always open to, to new
Ideas on that front. Okay. Thank you. Thank you. Very
Thank you. Mad chair. Thank
you.
Um, motion made by Alderman LaSpada recommending Do pass.
All those in favor signify by saying Aye. Aye. Opposed?
And the opinion of the chair, the ayes have it,
and the DO pass recommendation will report it out at the
next city council meeting.
Thank you, Dina. See you next time. Okay.
Item number seven, from the Department of Planning
and Development, a substitute ordinance
approving the first amendment
to the tax increment Financing redevelopment agreement,
and the amended city deed covenants
with Sinai Health Center, excuse me, Sinai Health System
located at 1500 South Fairfield Avenue
to convey the property located at 3,100
through 58 West Ogden Avenue
and 31 42 West 16th Street
to one Lawndale Children's Discovery Center
in the 24th
and 28th wards, uh, there is a substitute ordinance,
which was prepared and sent electronically to everyone.
Um, alderman Mitchell moves, uh,
to accept the substitute ordinance.
All those in favor signify by saying Aye.
Opposed in the opinion of the chair. The ayes have it.
And the substitute ordinance is now before the committee
and will be explained
by Michael Carey from the Department of Planning
and Development. Hello, Michael.
Prior to his testimony, Jeff Cohen, the Department
of Planning and Development, the reason
for the substitute was a repeated word in the ordinance.
Um, it was very minor. Thank you, Jeff.
Good afternoon. Good afternoon, chairman, do Chairwoman dah
and members of the Committee on Finance for the record.
My name is Michael Carey, financial Planning Analyst
with Department of Planning
and Developments Bureau of Economic Development.
Today I'm joined by Jeffrey Cohen,
deputy Commissioner for the Bureau.
We are here today seeking your favorable,
favorable consideration
and approval of an amendment
to the tax increment Financing redevelopment agreement
originally executed in 2015 between the city
and Sinai Health System, authorizing the reorganization
of remaining project milestones, extending the RDA term
through 2035,
and the release of the property
commonly located at 31 40 West Ogden Avenue from the RDA.
Both properties subject
to this amendment are located within the North Lawndale
Community area, west Planning region,
and the Midwest TIF District Mount Sinai Hospital
with a primary address
of 1500 South Fairfield Avenue is located in the 28th Ward,
represented by Alderman Jason c Irvin.
And the property commonly referred
to his 31 40 West Ogden Avenue
is located within the 24th ward.
Represented by Alder woman, Monique l Scott.
DPD has received letters of support from Alders Irvin Scott
and Burnett, whose wards contribute
to the Midwest TIF district
and are in support of this amendment.
Here's an aerial view of the neighborhood context
with Douglas Park, and the center of the map to the east
of Douglas Park is Mount Sinai Hospital, operated
by Sinai Health Systems.
And subject to the RDA amendment under consideration
to the west of Douglas Park is 31 40 West Ogden Avenue.
Also highlighted in red this property to be released.
This property is to be released from the
RDA and Con conveyed.
Both sites are transit accessible
with multiple bus routes nearby, along
with pink line stations, a few blocks south at Kedzie
and California respectively.
Mount Sinai Hospital opened in 1919 at the corner
of Ogden Avenue and California Avenue.
The exterior shot here shows the hospital's original
building with the red brick facade and the expanded portion.
Mount Sinai has a rich history
of catering to the underserved.
Today the hospital serves
as the primary safety net hospital on the west side,
providing care to individuals
regardless of insurance status.
Mount Sinai employs approximately 3,500 system-wide,
with 60% living within the community.
Sinai Health System serves in 2022. Dr.
Anza and ZK was named the president
and CEO of Sinai Health System.
After leading the Illinois Department of Public Health.
Due to the specialized nature
and features of the Sinai Tomorrow Project,
the Capital Project team is working with a variety
of contractors, architects, engineers,
and consultants to bring the project to fruition.
The original RDA with the city was executed in 2015.
Since execution factors outside its control have contributed
to delays in the project timeline,
the primary obstacle occurred when the rounder
administration withheld state
funds allocated for the project.
During the budget impasse from July, 2015 to July, 2017,
Sinai was able to overcome some of these funding issues.
However, the COVID-19 pandemic its aftermath
and new federal policies have resulted in the completion
of four of the 10 milestones from the RDA.
The proposed amendment provides an extension
of the original 2015 agreement to 2035,
modifies project milestones
and subsequent timelines for completion.
Additionally, the amendment will authorize the release
of the property located at 31 40 West Ogden,
which was originally acquired from the city to allow
for the applicant or
to allow the applicant to sell the property.
The remaining milestones consist of a total project cost
of 58.2 million supported
by 17.755 million of funds.
No new city assistance is being
requested as a part of this amendment.
If approved, the remaining milestones will be completed over
the next 10 years.
The project's capital stack
and budget will not change as a part
of Sinai's reassessment of the project scope.
The project will continue to be financed with a mix
of equity philanthropy, state
of Illinois grants and TIFF funding.
Again, Sinai is not requesting
an increase in TIFF from the city.
The budget presented here is
for the entire project included completed milestones.
The remaining scope of work will be highlighted
in the following slide.
Here are the updated milestones projected out through 2035.
In conjunction with DPD,
the Sinai Capital project team revised
and reprioritize the outstanding milestones
by making adjustments to the remaining scope, timing,
and budget in order to address immediate needs
and achievable outcomes.
The assistance at each milestone was also adjusted
to facilitate the revised schedule.
As part of the reassessment
of the original RDA Scope Sinai will divest
of its interest in 31 40 West Ogden Avenue.
Due to limited funding capacity
to complete the original intended project, Sinai
identified the nonprofit, one Lawndale Children's Discovery
Center as a suitable buyer
and organization to acquire the site for the purposes
of fulfilling the goals sought in the original RDA
to re redevelop the site into an early childhood development
center within the community to facilitate the transfer.
DPD is requesting the release
of 31 40 West Ogden from the RDA in, in order
to convey the property to one Lawndale, one Lawndale
and Sinai have entered into a purchase
and sale agreement for the site.
And as a part of the co conveyance
of the previously owned city owned land,
one Lawndale will be held to similar deed restrictions,
including time limits for construction use restrictions,
conveyance limits, and profit sharing covenants.
In the original 2015 RDA 31 million in TIF funding was
approved to support the project.
And 17.75 million of it is remaining for the, uh,
remaining milestones.
Five through 10 payments to Sinai will continue
to be dispersed as a reimbursement
after the issuance of a certificate
of completion for each milestone.
Sinai will not be allowed to request more TIF funding than
what has been determined
as the maximum amount at each milestone
outlined in the amended redevelopment agreement
that presented on the previous slide.
In return, Sinai will continue to be subject to a jobs
and occupancy covenant of a mi of a minimum
of 1800 full-time equivalent employees
and an operations of Covenant over the
10 year compliance period.
The agreement will contain typical construction compliance
requirements for prevailing wage MWBE and City Residency.
The support of the amendment to read the support
of the amendment to the redevelopment agreement
with Sinai Health System provides numerous public benefits,
including continued partnership with Sinai Health System,
a safety net hospital with the history
of serving a large population
regardless of insurance status.
Sustained support for the Sinai Tomorrow Modernization
Project and the reprioritized milestones
and scope to maintain Sinai's commitment
to providing modern HE healthcare facilities
conveying 31 40 West Ogden Avenue
to one Lawndale Children's Discovery Center under amended
covenants to continue to bring an early childhood
development and discovery center to North Lawndale
and surrounding communities.
For these reasons, DPD is in support of this amendment
to the TIF RDA and requested committee's
favorable consideration.
We are also joined by representatives from Sinai Health
System, their council
and representatives from one
Lawndale Children's Discovery Center.
We are happy to answer
any questions you may have at this time.
Uh, thank you very much Mr. Carey.
Uh, any questions for members of the committee?
Alderman Scott.
Thank you. Um,
this is a long time coming.
Long time coming, and so I thank everyone
that has worked tirelessly on, uh, removing this particular,
um, address out of the RDA Thank you
because now we can move forward with the one Lawndale
Children Discovery Center.
Uh, thank you Leslie Bond. Thank you, Mara.
Uh, you have worked tirelessly, um,
since I've been in office.
And so now we can again move forward
and bring some, a blighted some, bring some development
to a blighted area.
Thank you.
Uh, thank you Alderman Scott. Chairman Irvin.
Thank you. Mad the chair. Uh, again, uh, Sinai is, uh,
critical to the, uh, west side of Chicago.
Uh, it is in fact the largest employer, uh,
on the west side of Chicago.
And, uh, has been critical to the, uh,
healthcare needs of the community.
Uh, alderman Scott is correct in this site
that exists in the North Lawndale community right off
of Kedzie and Ogden.
Uh, it was once a city site that was designed
to be for, uh, children.
And I think, uh, moving forward in this purpose,
I think it's beneficial, uh, not only to, uh,
to the residents of North Lawndale,
but the west side in general.
So we do look forward to a,
a favorable recommendation from the committee.
Thank you. I'm just curious, uh, just
'cause I've heard, uh,
about the one Lawndale Children's Discovery Center is, uh,
Ms. Kaufman or Ms. Bond here.
I just wanna put a name with a face. Thank you very much.
You wanna come forward and just say something about
your organization?
Hi. Leslie Bond, founder
of the one Lawndale Children's Discovery Center.
Um, Ms. Kaufman was supposed to be here.
She was hit by a car on her way here.
She's fine, but unable to make it here today.
Uh, we were founded back in 2020
actually at Sinai Community Institute.
Um, we are partnering
with over 70 different organizations citywide, um,
as well as local constituents
and stakeholders in Little Village
and North Lawndale located in North Lawndale,
but it's a one Lawndale effort.
Thank you very much. Appreciate you
for your time this morning.
Um, can I get a motion to recommend approval of this item?
So moved by Alderman Irvin. Uh, recommending do pass.
All those in favor signify by saying Aye. Aye. Opposed?
And the opinion of the chairs. The ayes have it.
And, uh, we will report this out at the
next city Council meeting.
The do pass recommendation. Thank you guys.
Uh, moving on to item number eight,
which is a substitute ordinance authorizing submission
of the United States Department of Housing
and Urban Development, HUD 1 0 8 loan application
for the rehabilitation of 2135 North Milwaukee Avenue,
better known as the Congress Theater In the first ward.
Uh, there is a substitute ordinance, which was prepared
and sent electronically to everyone.
Is there a motion to accept the substitute ordinance?
So move by Alderman Quinn.
All those in favor signify by saying aye. Aye.
Oppose in the opinion of the chair, the ayes have it.
And the substitute ordinance is before us
and will be explained by Jeff Cohen from the Department
of Planning and Development.
Um, I've just been notified
that our court reporter needs a five minute break,
so we will take five minutes
and, uh, come back.
We're in recess for five minutes. I'm sorry.
Committee on Finance will be out, come out
of recess and we'll resume.
Uh, we were having, uh,
Jeff Cohen give us an explanation
of the substitute ordinance and the ordinance.
Thank you chair. Uh, the reason for the substitute was,
uh, the replacement as a departmental, uh, uh,
item rather than a direct alderman introduction.
Uh, would that help begin my testimony? Uh, thank you again.
Uh, chairwoman Dowell
and members of the Committee on Finance for the record,
my name is Jeffrey Cohen, deputy Commissioner
with Department of Planning and Developments
Bureau of Economic Development.
I'm here today seeking authorization to allow DPD
to submit an application to the US Department of Housing
and Urban Developments Section 1 0 8 Loan Guarantee Program
in support of the redevelopment of the Congress Theater.
This project has previously been the subject
of city council approvals and including the use of tiff,
but today's request is an entirely new action.
Uh, the project is located at 2135 North Milwaukee Avenue
within the Logan Square Community area, full Fullerton,
Milwaukee, TIFF District, and Northwest Planning Region.
The property sits within the first board represented
by Alderman Daniel Sada, who is in support of this action.
Uh, the subject property highlighted in red is located in
the neighborhood's primary commercial corridor at the
intersection of Milwaukee and Rockwell Avenues.
Although it sits on the neighborhood's primary commercial
corridor, it is also situated, uh, between two large centers
of activity in Worker Park and Logan Square.
Uh, here is a exterior picture of the Congress Theater,
which was originally constructed in 1926 as a movie palace,
but was eventually converted
to a live entertainment venue in the 1980s.
Uh, in 2022,
or sorry, in 2002,
the property was designated as a city landmark.
And in recognition of the buildings outstanding architecture
and unique character, it is one of a handful of properties
where the designation included its interior features.
The property, however, has sat vacant since 2013
and has fallen into significant disrepair
that urgently requires stabilization.
Uh, shown here again, is the exterior, which as you can see,
has had its frontage boarded up
and emergency scaffolding in installed.
Uh, here is a example
of the interior conditions of the building.
Um, this has experienced a rapid deterioration as a result
of significant water infiltration that is evidenced
by these photos in the, in the commercial space.
Uh, additionally, and despite this fact, sorry,
despite the significant damage, uh, the incredible features
of the Congress are still evident throughout the building.
Uh, DBD does believe,
however, that the deterioration has reached a point
where the viability of the structure
as a whole may soon be in jeopardy.
Uh, on this slide is a, uh, projection of the budget.
The property was acquired by the,
the development team consisting of a joint venture
between bomb revival, Chicago based developer,
and a EG one of the world's largest music
and entertainment production companies.
The development team is proposing an 89.4 million
redevelopment of the Congress theater
that would reactivate the space
as a state-of-the-art 4,900 seat live entertainment venue.
Uh, the completed project will also include 16 residential
units, all of which will be affordable at a 60% blended,
a MI 13,000 square feet
of retail space along Milwaukee Avenue
and 23,000 square feet of office space, which will be
provided to local businesses, nonprofits,
and community groups at a discounted rate.
Uh, the, the project's budget, which is shown here, uh,
will be funded with a mixture of equity state
and federal historic tax credits.
TIFF assistance and debt financing,
the project is substantially ready to start construction
with most due diligence
and pre-development actions having been completed.
The project has, however, been unable
to identify a senior lender
that would finalize its capital stack.
Uh, despite exhaustive efforts,
the developer has been unable
to secure a senior loan on terms
that preserve project viability based
on its review in the project.
Pro forma DPD does not believe the cause of this is a lack
of financial viability.
Instead, there appears
to be a gap in the current capital markets
for this particular asset class, especially
with conventional lenders having a limited appetite
for a live entertainment venue focused redevelopment, uh,
with additional complexities that, uh, are brought
with the mixed use nature of the project.
Uh, securing appropriate debt is the final critical path
item necessary to move the project into construction.
Further delays in securing debt financing will likely
increase the risk of further physical deterioration
and result in higher rehabilitation costs, as well
as potential loss of the opportunity
to restore the landmark in its entirety.
Uh, after demonstrating
that all available private options have been reasonably
exhausted, DPD identified a possible solution
to address this issue with the use
of a HUD section 1 0 8 alone.
The HUD Section 1 0 8 program allows municipalities
to access low cost loans with flexible repayment structures
with terms up to 20 years in order to support,
support local redevelopment projects.
The program is,
however, a true loan program with the requirement
of full repayment by the beneficiaries.
The program achieves this by allowing states
and local units of government
by using community development block grant allocations
as a guarantee for repayment.
The program requires projects to meet, uh,
CDBG national objectives, such as benefiting low
and moderate income persons through affordable housing
and job creation, slum
and blight elimination, as well as the need, uh, urgent need
of funds in addition to following, in addition
to following strict underwriting rules for feasibility
and public benefit and meeting national objectives
through eligible activities, DBD believes
that the Congress Theater could
meet all of these requirements.
Uh, DBD believes
that a HUD section 1 0 8 loan is the best option
for the Congress because it can not only address the
critical issues facing the project,
but would do it in a way that would not require the city
to provide additional TIF assistance,
which would result in an over subsidization of the project.
This pathway is further supported by key project elements
that substantially reduced the overall risk
of the project itself, including
but not limited to underwriting support by an MAI appraisal,
demonstrating revenue and expense projections sufficient
to cover debt service, uh, a strong credit worthy
and well-established entertainment operator
as the anchor tenant subject to a long-term lease,
a development team with a proven track record
for historical renovations as well
as successfully completion
and repayment of a Section 1 0 8 loan.
In addition to, as well
as a senior lien interest in the property, if approved,
it is expected that the loan would have the following terms.
Uh, the, the city is requesting 25.25 million.
Uh, these funds will be drawn as needed
to reimburse expended eligible costs.
Uh, we are requesting a 20 year term.
Uh, the interest rate will be cons, measure it
with HUD note interest, uh,
and the repayment structure will consist
of a 36 interest only 36 month interest only period,
which would convert to a fully amortizing loan
for the remainder 20 year remainder.
Um, all HUD costs and fees would be paid by the developer
and the developer's obligation will also be for compliance
with CDBG program requirements, section 1 0 8 regulations,
HUD loan and HUD note terms, as well as the TIF RDA as well.
And the loan will be secured by a senior mortgage
and promissory note recorded against the property,
providing additional risk mitigation.
The primary source of repayment as stated,
will be from project revenue generated from ongoing
operations of the asset.
The loan can also be repaid as part of a refinance
or from net proceeds from a sale.
The loan would additionally remain subject to terms
and conditions as stated of the tif
RDA previously approved by counsel.
Providing DPD with the authority to apply for
and seek a section 1 0 8 loan would allow for the public,
the full public benefits this project
delivered to come to fruition.
The restoration of a landmark theater that has been vacant
for nearly 15 years would in turn assist
with catalyzing further neighborhood
and corridor activation
for small businesses supported being supported along
the Milwaukee Avenue corridor.
Uh, for these reasons, DPD is in support of this ordinance
and request the committee's favorable consideration
with a due pass recommendation.
I'm also joined by representatives from the development
team, and we are happy
to answer any questions the committee may have.
Uh, thank you, Jeff.
Just quickly, what happens if, uh,
who's on the hook if this goes south?
Uh, in, in the event of a, uh,
default and yes, foreclosure.
So the,
The more eloquent way of saying it,
The, the city will be guaranteeing these funds
through future CBDG payments.
However, the senior loan will provide a risk mitigation, um,
in the potential of result of a foreclosure
to recapture any funds from the sale of the property.
Alderman LaSpada. Thank you Chair.
I, Jeff, put everything better than I could.
I would only share a couple quick things.
Number one, like in the viability of this project, the,
the entertainment partner in this is a EG,
the second largest entertainment company in the world.
I don't think they would be invested in this property.
I don't think the developer would've invested
so much already in this property if they weren't confident
of the success of this space as an entertainment venue.
I would also say those photos that we put up there today,
which already looked terrible, those are from four years ago
and nothing has gotten better since then.
We are at the, the last opportunity to make this happen.
To say also this TIFF expires at the end of 2027.
We're not renewing it. It doesn't qualify to be renewed.
And so if we don't find a way to get this done,
not only does it not happen now,
it does not happen from the, for the foreseeable future.
It's deeply important to our community.
I already have seen the way it is.
Cat catalyzed attention
and interest in all of the lots around it.
Um, very excited to get this going.
And I do ask favorable consideration of my colleagues
Committee.
All right. Uh, any other comments
or questions for members of the committee?
If they're seeing none, alderman Irvin moves to pass.
All those in favor signify by saying Aye. Aye. Aye. Opposed?
In the opinion of the chair, the ayes have it,
and the substitute ordinance will be reported out
of the do pass recommendation will report it out at the
next city Council meeting.
Thank you, Mr. Stern. Item number nine is an ordinance.
And I must apologize to Alderman Nugent
who had something else that she needed to do.
So thank you for staying.
Um, an ordinance introduced by Alderman Samantha Nugent, uh,
approving the Amendment of article, uh,
26, effective date of 2026,
the municipal called Revenue Ordinance Alternative,
uh, alderman Nugent.
Thank you Madam Chair. I promise this is very
quick and brief and easy.
This was just, uh,
cleanup legislation from the revenue ordinance.
What it did was two things.
It changed the implementation of the congestion fee portion
of the legislation from January 1st to January 6th,
which they've already moved on.
And then for the, um, uh, the liquor portion
of the revenue ordinance,
changing the date from January 1st to March 1st.
Okay. Any questions from members of the committee?
Move Do Pass by Alderman Quinn.
All those in favor of the motion signify by saying Aye. Aye.
Opposed? And the opinion of the chair, the ayes have it
and the do pass recommendation will be reported out at the
next City council meeting.
Item number 11 is, uh, miscellaneous a proposed order
authorizing the payment of various small claims against the
City of Chicago.
A direct introduction.
That list of payments was sent electronically to everyone.
If there are no objections,
these will be placed on the omnibus.
Item number 12. Also, miscellaneous,
a proposed order denying the payment
of various small claims against the city of Chicago.
Also, a direct introduction.
And that list of payments was sent
electronically to everyone.
And if there are no objections,
these will be placed on the omnibus.
There being no further business
before the committee, uh, alderman Lee moves
for adjournment.
All those in favor of the motion signify by saying, aye.
Aye. Oppose and the opinion of the chair. The ayes have it.
The Committee on Finance comes to an end. Thank you.
You thank.