Council Rules of Conduct for Public Meetings,
2023 to 2027.
Pursuant to Rule 58 of the Chicago City Council Rules of
Order and Procedure, the Sergeant at Arms sets forth the
following rules of conduct for members of the public.
These rules shall be in effect at all times that a viewing
gallery or room is open for a meeting of the City Council
or any of its committees. All individuals and their belongings
are subject to search at entry or upon request.
Individuals must remain seated at all times except,
one, when entering or exiting the gallery.
Two, when providing public comment during the portion of a meeting
set aside for that purpose.
Or three, when asked to rise and be acknowledged by a member
of the City Council.
Profane, threatening, harassing, abusive,
or defamatory behavior or speech, which in the
judgment of the meeting's chair or the Sergeant at Arms, may
lead to a breach of the peace or disrupt the orderly conduct
of the meeting, is not permitted. Disruptive or distracting
actions, such as the stomping of feet, waving of arms,
throwing any item, whistling, booing, shouting,
or other loud utterances, are not permitted when in the judgment of the
meeting's chair or the Sergeant at Arms, such actions are
disrupting or impeding the orderly conduct of the meeting.
Any item that poses a potential safety hazards, as determined by the
Sergeant at Arms, is prohibited in the gallery.
Such items include, but are not limited to, one, any
pointed objects, including knives of any kind.
Two, banners, flyers, or other forms of signage.
Three, food and beverages, including in glass or
metal canisters. Four, backpacks, large bags,
and sealed packages. Clear bags, not tinted in color,
that do not exceed 12 inches by 6 inches by 12
are permitted and subject to search.
And five, firearms, ammunition, fireworks,
laser pointers, stun guns, tasers, mace pepper
spray, and toy weapons. Cell phones and other small
handheld recording devices must be placed in silent mode,
can only be used while seated, and can only be used in a
manner that does not interfere with the ability of other
individuals to view or hear the proceedings.
Individuals or groups failing to adhere to these rules
will be subject to removal from the remainder of the meeting by
the Sergeant at Arms.
City of Chicago City Council Rules of Conduct for Public
Meetings, 2023 to 2027.
Pursuant to Rule 58 of the Chicago City Council Rules of
Order and Procedure, the Sergeant at Arms sets forth the
following rules of conduct for members of the
public.These rules shall be in effect at all times
that a viewing gallery or room is open for a meeting of the City
Council or any of its committees. All individuals and
their belongings are subject to search at entry or upon
request.
Individuals must remain seated at all times except,
one, when entering or exiting the gallery.
Two, when providing public comment during the portion of a meeting
set aside for that purpose. Or three, when
asked to rise and be acknowledged by a member of the City Council.
Profane, threatening, harassing, abusive,
or defamatory behavior or speech, which in the
judgment of the meeting's chair or the sergeant-at-arms, may
lead to a breach of the peace or disrupt the orderly conduct
of the meeting, is not permitted. Disruptive or distracting
actions, such as the stomping of feet, waving of arms,
throwing any item, whistling, booing, shouting,
or other loud utterances, are not permitted when in the judgment of the
meeting's chair or the sergeant-at-arms, such actions are
disrupting or impeding the orderly conduct of the
meeting. Any item that poses a potential safety
hazards, as determined by the sergeant-at-arms, is prohibited
in the gallery.
Such items include, but are not limited to, one, any
pointed objects, including knives of any kind.
Two, banners, flyers, or other forms of signage.
Three, food and beverages, including in glass or
metal canisters. Four, backpacks, large bags,
and sealed packages. Clear bags, not tinted in color,
that do not exceed 12 inches by 6 inches by 12
are permitted and subject to search.
And five, firearms, ammunition, fireworks,
laser pointers, stun guns, tasers, mace, pepper
spray, and toy weapons. Cell phones and other small
handheld recording devices must be placed in silent mode,
can only be used while seated, and can only be used in
a manner that does not interfere with the ability of other
individuals to view or hear the proceedings.
Individuals or groups failing to adhere to these rules
will be subject to removal from the remainder of the meeting by
the sergeant-at-arms.
City of Chicago, City Council, Rules of Conduct for Public
Meetings, 2023 to 2027.
Pursuant to Rule 58 of the Chicago City Council Rules of
Order and Procedure, the sergeant-at-arms sets forth the
following rules of conduct for members of the public.
These rules shall be in effect at all times that a viewing
gallery or room is open for a meeting of the City Council or
any of its committees. All individuals and their belongings are
subject to search at entry or upon request.
Individuals must remain seated at all times except,
one, when entering or exiting the gallery.
Two, when providing public comment during the portion of a meeting
set aside for that purpose.
Or three, when asked to rise and be acknowledged by a member
of the City Council.
Profane, threatening, har-
Good morning, ladies and gentlemen.
The Committee on Finance meeting is called to order.
Today, we're holding a TEFRA public hearing for the Lathrop
Redevelopment Phase 1C project, for
which the city will issue multifamily housing bonds.
We'll have a roll call now to establish quorum.
Vice Chair Conway.
Alderman Espada.
Alderman Hall.
Alderman Harris. Alderman Beale.
Alderman Lee.
Alderman Ramirez. Alderman Quinn.
Alderman Lopez.
Alderman Curtis.
Alderman O'Shea. Alderman Taylor.
Alderman Mosley.
Alderman Rodriguez. Alderman Scott.
Alderman Sigcho-Lopez. Alderman Burnett.
Alderman Taliaferro.
Alderman Cardona.
Alderman Waguespack.
Alderman Rodriguez Sanchez. Alderman Casada.
Alderman Villegas.
Alderman Mitz.
Alderman Sposato.
Alderman Riley.
Alderman Knudsen.
Alderman Martin.
Alderman Silverstein.
Chair Dowell is here. We have a quorum.
We have 16.
Alderman Moore will be counted towards quorum.
We have 17.
Alderman Irvin, Alderman Vasquez, Alderman Hopkins,
and Alderman Mitchell
have requested remote participation for reasons stated under the
provisions of Rule 59. Can I have a motion to allow
these aldermen to participate? So moved by Alderman
Mosley. All those in favor signify by saying "aye."
Opposed?
Yes, Nick. In the opinion of the chair, the ayes have it and the
motion carries.
I'd like to confirm Alderman Irvin,
Alderman Vasquez.
Alderman Irvin is present.
Alderman Vasquez present.
Alderman Hopkins?
Alderman Hopkins present.
And Alderman MitchellLet the record reflect
that this is a public hearing that is being held pursuant to the
requirements of Section 147F
of the Internal Revenue Code of 1986 as
amended. Notice of this public hearing was published on
April 3rd, 2026, on the website of the Office of
the City Clerk of the City of Chicago.
Let the recorder mark the screenshot of such
notice as committee exhibit number one for
identification.
This is a public hearing regarding a plan of finance to issue
multifamily housing revenue bonds series
2026 for the Lathrop redevelopment phase
1C project in a principal amount not to
exceed $100 million. We will refer
to these
as the bonds. The proceeds of the bonds will be issued
by Lathrop Preservation Phase 1C LP,
an Illinois limited partnership, which we will refer to them as the
borrower,
to finance an affordable development project by acquiring,
constructing, rehabilitating, and equipping a
mixed-income multifamily housing development, which we will
refer to as the project.
The project consists of the third phase of the
redevelopment of Lathrop Homes, which will include the renovation
of seven existing buildings, resulting in
250 residential rental units and
the demolition of three existing buildings to make
room for the construction of one new building that will
generate 59 additional residential rental units
and functionally related and subordinate facilities, all
located in the city of Chicago in Illinois,
generally at 2600 through 2618,
2601 through 2631,
2628 through 2662,
2664 through 2704,
2633 through 2667,
2740 and 2750 through
2768 North Hoyne Avenue,
and 2731 through 2759
North Leavitt Street.
And two, by paying fees, expenses, and
costs incurred in connection with the authorization,
issuance, and sale of the bonds.
Of the 309 residential units in this project,
approximately 63 units will be available to
households earning up to 30% of the area
median income. Approximately 113 units will
be available to households earning up to 60% of
the area median income, and approximately 72
units would be available to households earning up to
80% of the area median income, and approximately
61 units will be market rate units.
The borrower will own the improvements that constitute the
project, which are to be constructed and rehabilitated on
land that is owned by the Chicago Housing Authority and
leased pursuant to a ground lease between CHA
and the CHA Community Support Corporation,
an Illinois not-for-profit corporation.
The borrower will simultaneously assume the leasehold interests of the
CHA under the ground lease, and the
general partner of the borrower is Lathrop
Preservation Phase 1C GP
LLC, an Illinois limited liability
company.
The city will issue the bonds pursuant to its powers as a home rule
unit of government under the 1970 Constitution of the
state of Illinois and an ordinance adopted by the City Council of
the city. The bonds will not be a general obligation of the
city, the state of Illinois, or any political subdivision
thereof, but will be a limited special obligation of the
city. The principle of premium, if any, and
interest on the bonds will be payable solely out of the
revenue of the project and other funds pledged and
assigned for the payment by the borrower in
accordance with the trust indenture among the city, the borrower,
and the to-be-named trustee.
The bonds will not constitute an indebtedness or an
obligation of the city, the state of Illinois, or any
political subdivision of the state of Illinois within the purview of
any constitutional limitation or legal provision.
No holder of the bonds will have the right to compel any
exercise of the taxing power of the city, the
state of Illinois, the United States of America, or any
political subdivision of any of them to pay the
principal of premium, if any, or interest on the bonds.
Written comments related to the plan to issue these bonds
must have been submitted by email to the committee not later than
1:00 PM Friday, April 10th, 2026, and
the record should reflect that no written comments were submitted
on this project. Ladies and gentlemen, if any resident,
taxpayer, or other interested person attending this hearing
desires an opportunity to express their views for or
against this proposed issuance of the bonds, please do one of the
following. For those attending this hearing in person, please come to the
microphone when your name is called, and for those who have called on the
toll-free number,
please enterStar nine on your phone to notify the host
of the call-in number, and once you are called
upon to provide your comments, please enter star six to
unmute your phone. Each speaker will be limited to three
minutes.
We will begin the public comment period
with
the first speaker being George Blakemore.
TIF
money.
I see.
And the public comment.
Where are the public?
I've been beating up on these elected officials, but
we can't do that. We have to beat up on the citizens who allow
this voodoo economics going on here.
It's been going on
when Burt was here. Now,
Patty is here, and it never stops.
It never stops because the people
of the city of Chicago allow this to
happen.
Millions and millions, and then reading this fundamental,
did you hear her say that the city is not responsible for
this money, and they kicked the bucket down another
10 or 20 years? Voodoo economics.
Voodoo economics. You are responsible for that
because you're using city money. I was under the impression several
years ago that TIF was for flighted areas.
That's not true.
When you know better, you do better.
And the reason this can go on,
because the citizens are
silent. They let it go
on. And look, Trump has nothing to do with this.
You do not want a educated, informed
constituent.
You want to keep them ignorant, uninformed, and unengaged, where
you can take advantage of them
with these millions of dollars. How are you going to mix oil
and water together, the rich, the Lathrop that's
up north?
Who's going to get these jobs, goods, and contracts and service?
How many is that going to twinkle down to the
poor Blacks here?
With CHA. They're having a saga out there with CHA,
and it's because of you. You let it go
on. You keep putting these same people back in office.
The audacity to try to say, "We're going to throw you out." Why would you
do that, Pat? You know the law. You know if you get rid of me,
you got to file a legal complaint. But you don't, because
you get the police that are also corrupt with this.
All of you,
and you can't blame this on Trump. All of you are a
member of a corrupt machine, every one of you.
And some of you are like, I think
if you know better, they know better. But what is this all about, Mr.
Blakemore? Tell me. Make it short. Make it short.
About the money.
About the money,
and you Black ones are sellouts.
You white ones are sellouts. You as bad.
Thank you, Mr. Blakemore. I'd like to acknowledge Alderman Harris,
Alderman Mitts, Alderman Rodriguez Sanchez, Alderman O'Shea,
Alderman Burnett, and Alderman Rodriguez
have joined the meeting and will be added towards quorum.
Our next speaker is Nivia
Sandoval.
Followed by Annette Griffin.
And Alderman Knudson has joined us and will be counted towards quorum.
My name is Nivia Sandoval. I have been in the
Lathrop for 42 years. I brought up my two kids
there, and has been so long for the next
reconstruction or
however you want to call it. We need those houses, please.
Thank you, Ms. Sandoval. Our next speaker is Annette
Griffin, followed by Jessica Jackson.
Yes. Hello, my name is Annette Griffith.
I'm a Lathrop resident for about 13 years.
We need this housing. People need houses.
It's been too long. Let's get this done.
Thank you, Ms. Griffin.
Jessica Jackson.
Well, I don't see that the city is in a position to do
anything with money, because you all have just blown and messed up a whole lot of
money. And as it pertains to bonds for
housing, it is yet to be determined where the Southwest invest
money went.
We still haven't seen that money on the South Side and West Side, but you keep on
finding bonds and money to build up North.
But let me deal with the issue at hand, Pat Dowells, Alderman Pat Dowells.
I'm seeing a pattern.
And the pattern is that the Cook County and city
officials continuously give these seminars
about property after death and how to protect your property, how
to transfer your property to your loved ones.
I saw it the first time Saturday, October 12th,
2024, with
Commissioner Cedric
GilesCook County
Commissioner Bill Laurie and Alderman David Moore.
And this was going on while I was going to Bill Laurie
about how they were stealing, trying to steal my mother's probate
estate.
And while Bill Laurie sold me out,
he was making a seminar about the very thing.
Now, Saturday, you,
Michael Scott, Commissioner Michael Scott, and
Monica Gordon are doing the same thing.
You're giving a seminar that's supposed to be about how people
protect their property
in death and after-death benefits, and you're sitting there misleading
the people while you all know that what you're saying is not
true. Because all of you sitting here day after day, month after month,
at this point, year after year,
knowing that Cook County officials are stealing probate
property through the public administrators.
So how long are you all going to keep going in front of the
people, acting like you're giving seminars about
information to save their property when in fact, you all are
complacent with stealing the property?
How long are you all... And you could play with your papers all day, but it don't
change the fact that you were there, you heard me speak, and you didn't even
do so much as turn around, just like how you're playing with them papers now.
This is why we're coming for y'all seats.
This is why. This is why.
Conway, Conley, Conway, whatever his name is, is a whole
prosecutor, and he sits here
meeting after meeting. Him and Matthew Martin, who are
attorneys, sit here and listen to how you all participate with
stealing property and don't do anything, except for bring some more crooked
contractors in here to do more crooked work and make more crooked
deals.
Thank you, Ms. Jackson.
Ladies and gentlemen, this concludes the public hearing on the proposed plan
for the City of Chicago to issue the not to exceed
$100 million principal amount in multifamily housing
revenue bonds series 2026 for the Lathrop
redevelopment phase 1C project.
Let the record reflect that this public meeting or public
hearing on this matter concluded at 10:25 AM,
April 13, 2026, and this concludes the
TEFRA hearing.
Good morning, ladies and gentlemen.
The regular meeting on the Committee on Finance is
called to order. We'll now have a roll call to
establish quorum.
Vice Chair Conway.
Alderman Lampada.
Alderman Hall.
Alderman
Harris. Alderman Beale. Alderman Lee.
Alderman Ramirez. Alderman Quinn.
Alderman Lopez.
Present.
Alderman Moore.
Alderman Curtis. Alderman O'Shea.
Alderman Taylor.
Here.
Alderman Moseley.
Alderman Rodriguez.
Alderman Scott.
Alderman Siccho Lopez. Alderman Burnett.
Alderman Taliaferro.
Alderman Cardona.
Alderman Waguespack.
Alderman Rodriguez Sanchez. Alderman Casada.
Alderman Villegas. Alderman Mitz.
Alderman Sposato.
Alderman Riley.
Alderman Knudsen.
Alderman Martin.
Alderman Silverstein.
Chair Dowell is here.
Alderman Silverstein. Yes.
We have a quorum. We have 23 members.
Aldermen Ervin, Vasquez, Hopkins, and Mitchell have requested to
participate remotely at today's meetings for reasons
under Rule 59. Can I have a motion to so move by
Alderman O'Shea? All those in favor signify by saying
I.
Opposed.
Got you, Nick. All those in the opinion of the chair, the
ayes have it, and the motion carries.
Aldermen Ervin, Vasquez, Hopkins, and Mitchell, can we confirm that
you're here?
Alderman Hopkins present.
Alderman Ervin is present.
Alderman Vasquez?
Alderman Mitchell.
At this time, we'll begin the public comment period.
The public comment period will be limited to 30 minutes.
Out of respect for everyone's time, each speaker is limited to three
minutes. We have no
remote speakers this morning. Alderman Hall, good morning.
We'll count you towards quorum.
And Alderman Siccho Lopez.
We have one speaker this morning, that is Jessica Jackson.
No?
Jessica Jackson, please proceed.
So,
the police, the FOP man was out here.
John, what is it, Cardozona, was out here, and he asked
me
jokinglyif my
time for suspension from in here was up.
And I told him, "Yeah, I wouldn't be here."
And I
said, "So it's being investigated." So he started laughing
and he said, "Kwame Raoul not going to do nothing."
It's amazing how someone can find it
funny that your rights are being violated,
especially somebody that's supposed to be over the police, and the
police are used
to bother us in these meetings. Now, I have nothing against the police per
se, but they should not be allowed to be used
to violate our rights. And then the person that's in charge of the police
finds it funny
because he feels that Kwame Raoul won't do anything.
Now, I'm of that same opinion.
Kwame Raoul probably won't do anything.
That's the reason why you all do the things that you all do.
You have no fear of prosecution.
You have no fear of going to jail. You have no
fear of anything. You all really don't even have any
fear
of losing your seats.
You all are not even fearful of that because you hoodwink your
constituents so much
to make them think that you're doing something for them when you're not doing
anything for them, and you constantly grab at the low-hanging fruit.
And everybody y'all got in y'all pocket with these 501
[3] s, these non-profits,
these contracts.
Everybody is in the City of Chicago and Cook County's
pocket.
And you got the citizens in a straight-up political headlock in
this city. We can't get nowhere because of you
all and your corrupt politics. And then the FOP
man had the audacity to laugh
because he can use these police.
We coming for these seats. How it's going to happen?
God knows. God knows. And it's going to
happen because y'all are too corrupt.
You're too corrupt
and don't even have the audacity to be shameful for it.
That's why Silverstein can just walk.
But let somebody say something about the Jewish community, oh, boy.
Oh, boy.
We coming for them seats. Bring on it.
Thank you, Ms. Jackson. Our next speaker is George Blakemore.
Did you all hear what Ms. Jackson said?
Were you listening?
The police, they say, "Raoul, he's
hooked up with the machine,
and nothing going to happen when they violate your right."
And the police, it's millions of dollars.
But they talk about police crime and shooting and
the day all this money going to be spent. Uh-uh.
These policemen are hooked up with this.
The audacity. The way you can get me out, you have to sign a legal
complaint
if you want to get rid of me. No you don't, Pat.
All you have to do is call the police, police throw me out, then you type
up a letter say, "Don't let Mr. Blakemore back until August the 18th."
That's illegal.
You bully, you.
Back to what happened to this lady. She was lynched.
She was lynched on the poplar tree.
We, Black people, are being lynched,
but you still think you're free and Black.
That was a lynching.
And how you going to put me out when I file a legal
complaint and then type up on this,
don't let him back till August the 18th. This is illegal.
But all of you, legal, it's illegal.
The machine put you there. People didn't vote for
you. They didn't vote for you, but they
slated you. And whoever they slate, that's who the people
vote for.
This is a corrupt system.
And he smiled. The reason he laughed, because he say, "They not going to do
anything about it."
He laughed, Raoul. All of them are hooked up.
All of them, the Black ones,
the white ones, the Hispanic, the Asian, all of
them. And Trump didn't have a darn thing to do with
this.
All of them.
It is a corrupt system here. And don't beat up on
the aldermen. The people are corrupt.
Somebody was supposed to say, "You can't pull her out, and
60 days.
You didn't arrest her."
You do what you want to do because the people let you
do
it. Because you all are at fault. Don't lay it on the
aldermen. Don't lay it on Brandon Johnson.
This mess was here long before Brandon Johnson.
And when he leaves, it's going to still go on
because this is the game that's being played.
All of y'all, all of us, you, you, you, you, you,
all of us
are part of this corrupt machine. Now, throw me
out. Tell the police you got to sign a legal
complaint. No, you don't. The police, you can't come back.
Thank you, Mr. BlakemoreWe have a total of nine
items on the agenda this morning. We'll start with our
monthly Rule 45 report
and we'll begin with the approval of the March
2026 monthly Rule
45 report for the Committee on Finance.
This report was sent electronically to everyone.
If there are no questions, can I get a motion?
So moved by Alderman Riley to recommend
approval of the monthly Rule 45 report.
All those in favor signify by saying aye. Opposed?
In the opinion of the chair, the ayes have it, and we'll move on to item
number one from the Department of Law, a communication
transmitting reports of cases in which verdicts, judgments, or
settlements were entered into for the month of March
2026. This report was also sent
electronically to everyone, and if there are no objections, we'll
place this item on file with the clerk.
Item number two is from the Department of Law.
Two proposed orders authorizing the corporation
council to enter into and execute
settlement orders in the following case.
I thought that was something by my foot.
Item
2A is Derrick Wordlaw and Camille
Wordlaw versus the City of Chicago, case number
2024-L-004324,
in the amount of $470,000. We're joined this
morning by Deputy Corporation Counsel, Margaret Mendenhall
Casey, to present this case. Margaret?
Thank you, Chair.
Married plaintiffs, Derrick Wordlaw, who was then 31 years
old, and Camille Wordlaw, 30 years old, were involved in a motorcycle
accident after they encountered a pavement buckle on
southbound Lake Shore Drive near McCormick Place.
As a result of the accident, Mr. Wordlaw claims a skull
fracture and traumatic brain injury, and Ms.
Wordlaw claims a concussion, as well as scarring.
From two years before the accident until one month after,
the city received 27 complaints about the asphalt in this
section of Lake Shore Drive. Department of Law recommends
settlements in the amount of $470,000.
That is $380,000 for Mr. Wordlaw
and $90,000 for Mrs. Wordlaw. On September
3rd of 2023, around 9:00 PM, Mr. Wordlaw, who
was the driver, with Ms. Wordlaw as a passenger, drove his
motorcycle south on Lake Shore from Roosevelt.
Two motorcyclists accompanied the Wordlaws.
The pavement was dry. Testimony reflects they
were traveling at about 50 miles per hour with the speed limit being
45. As they traveled south, all three cyclists hit
a pavement buckle in the roadway near the I-55
southbound exit. The Wordlaws' bike fell, and they flew
into the air. The other two cyclists were more experienced and able
to clear the buckle without incident. Mr.
Wordlaw's insurance settled with Ms.
Wordlaw for $25,000. Therefore, the
city cannot seek compensation from Mr.
Wordlaw for Ms. Wordlaw's injuries.
From two years before our accident until one month after, the
city received 27 311 reports about pavement
issues for this section of Lake Shore.
A June 22 report, which was before our accident,
stated that the defects will cause, quote, "a major wreck one of
these days." A November 22 report, again before our
accident, contains pictures of the subject roadway
defect.
CDOT was aware that this section of Lake Shore had
pavement buckle issues.
CDOT used patches that were a short-term fix
and sometimes would sink due to traffic volume and weather
conditions. CDOT did ascertain that the section of
Lake Shore required a more permanent repair, which was overall
resurfacing of the roadway. CDOT was awaiting funds to
complete the resurfacing when this accident happened.
The defect was repaired when CDOT resurfaced this entire section
of Lake Shore Drive in April of '24, our
accident happening in September of '23.
As to the injuries, Ms. Wordlaw was hospitalized for three days and
diagnosed with a concussion and cuts to her face.
By October, Ms. Wordlaw had healed and returned to work.
She has small scars on her left hand and her face.
Ms. Wordlaw's economic damages total 57,000, including
medical bills, as well as lost wages. Mr.
Wordlaw was diagnosed with a skull fracture and bleeding
inside his brain and hospitalized for five days.
He tested negative for drugs and alcohol.
In October of that year, a surgeon diagnosed Mr.
Wordlaw with left shoulder dislocation.
A neurologist diagnosed him with a damaged right eye nerve.
In April '24, Mr. Wordlaw complained of pain from a
keloid on his head that contained foreign matter and
received a steroid injection. He continues to
experience nerve pain from the keloid.
He has significant scarring to his scalp and his back. Mr.
Wordlaw worked at Ferrer-Roche as a laborer.
He was off work for about a year due to this accident.
His total economic damages are
$196,000. In total, the
Wordlaws claim $253,000 in
economic damages, and the Department of Law recommends settlement in the amount
of $470,000. That's 380 for Mr.
Wordlaw and 90 for Ms. Wordlaw
Thank you, Margaret.
Are there any questions from the committee on this matter?
Alderwoman Taylor.
How you doing?
I'm good, thank you.
Were they wearing helmets?
So thank you for that question, Alderwoman. Ms.
Wordlaw was wearing a helmet. Mr. Wordlaw was not
wearing a helmet.
However, the law in Illinois is very clear on
this, that the failure to wear a helmet is not
admissible at trial. So, that's not something that we
would be able to present to the jury.
Has the pavement been fixed?
Yes.
Thank you. Thank you, Chair.
Thank you. Margaret, you might want to explain
the other inadmissible item in this case.
Yes. I'm happy to, Chair. In this matter, Mr.
Wordlaw had a permit to ride
his motorcycle, and that permit did not allow
him to carry a passenger. That permit also did not
allow him to drive
after dusk, with this accident happening at 9:15 and
the evidence being that it was dark outside.
Unfortunately, again, the case law is rather clear in this
area. Someone's failure to have a
license, and in particular, a motorcyclist's failure to have a
license or disobeying licensing
regulations is not admissible at trial, the Illinois
Appellate Court has held.
Thank you.
Alderman Lopez.
Good morning, Chairman, and good morning, members of the committee.
So I understand this correctly,
this inadmissible
aspect of this,
does that apply to all motor vehicles?
So just to make sure I understand your question, are you asking
if an individual's failure to wear a
helmet, if that's admissible?
No, no, I'm sorry.
Okay.
Forgive me.
With regards to licensure,
is that universally applied to all motor vehicles?
Unfortunately, yes, it does.
So we can literally have someone driving on the streets right
now
without a license, hit a pothole, and then turn around
and sue us even though they are in violation of the law to begin with?
So the Illinois Appellate Court has held that an
individual's failure to have a driver's license
is not admissible because there's a different standard between what
you need to get the driver's license and a finding that somebody is
negligent. The courts have reasoned that an individual may know how to drive
despite having or failing to have a license.
And I understand what you're saying.
It is very counterintuitive. When I began in this role, I'm a former
prosecutor, I got a file, a person didn't have a license, it was a
simple car accident, I said, "I'm going to win this case.
We're going the fact he couldn't drive." My superiors at the
time advised me that unfortunately, due to the Illinois
Appellate Court's ruling, an individual's failure to have a
license is not admissible in motor vehicle civil
cases.
And when did the appellate court make that decision?
Give me one second.
I have that information with me.
And was that the Northern District that did this?
Sure. So this would be the First District,
Appellate Court, because this is a state law case.
Give me just one second. Okay. So this
was from 1976. It says,
quote, "Licensing statutes do," and this is the precedent,
"Licensing statutes do not set forth specific standards of
care, and the fact that a driver has not submitted to the
state for testing of his driving skills is not
evidence that he was driving negligently when involved in
an accident." So that's the quote from the
1976 ruling that sets the precedent
about the admission or inability to
admit lack of a license in these motor vehicle and
motorcyclist cases.
Thank you.
Thank you, Alderman Lopez. Seeing no more questions, can I get--
Oh, Alderman Riley.
Thank you, Chair.
Just a follow-up question on that.
Is this something that can be cured by statute?
Give me one moment to think about that.
To be honest, I would have to answer that question through
the Chair.
I don't think that
a statute could cure this, and certainly not--
I mean, the question is about, is it an ordinance or a state statute?
State statute.
I'll have to answer that question through the Chair, Alderman.
Thank you. Thank you, Chair.
Thank you, Alderman Riley. Alderman Vasquez.
Yes, Madam Chair. I just wanted to identify I was here.
I know you had called earlier, so my apologies.
All right. Thank you. We have you. Alderman Hopkins has
joined us in person and
will be counted towards quorum, and he also has a question.
Thank you, Madam Chair. If this matter were to go to trial, would tort immunity
be a defense?
One of our defenses would be
the fact-- Yes, it would be tort immunity and the fact specifically that the
pavement buckle was an open and obvious defect
that Mr. WordlawShould have been able to
avoid. That argument would not apply to Ms. Wordlaw.
We did sue Mr. Wordlaw for Ms. Wordlaw's injuries, but the insurance
company settled that claim, meaning the city could not proceed with it.
As to Mr. Wordlaw, if we were to proceed to trial, we certainly
would argue
that this was an open and obvious defect.
Our notice argument that we didn't know about this condition
would be difficult. We'd argue we knew about it, but we did
not know about the risk.
That's going to be a pretty difficult sell, and the plaintiffs
will argue how many calls needed to come in at this time.
So we'd make the notice argument as not as strong.
We'd also make the argument that this matter was open and obvious, but
I would foresee a jury compromising on that issue and
not completely throwing out the case against Mr. Wordlaw.
Okay. In your case summary, I thought I heard you mention a
specific number,
I think it was 27, of records that
would prove the plaintiff's claim of notification.
Was that
certain types of emails or phone calls?
Or how did you arrive at a specific number to document that we
were adequately notified of complaints about the conditions?
Thank you for that question, Alderman.
Anytime we have a premises case, whether that be a
sidewalk, Lake Shore Drive, a light pole falling down,
we do a search of 311
records within the vicinity for two years before the
incident and one month after. And so our 311
search revealed 27 complaints about this
particular location of Lake Shore Drive
in the two years before and one month after this accident.
Okay, thank you. I'm going to make a request then for information through the
chair from our Risk Management Department.
There's been some talk, I think this came up during the last budget,
that we really need to have an automated mechanism to
flag a high number of complaints about a specific
hazard. That it should compel a
more rapid response from CDOT or from whatever department is in
charge of fixing the defect, because it really undermines our
ability to defend against claims like this when there's a high number
of notifications and communications and internal
discussions, and yet months, if not years, go
by before the defect is repaired. That's unacceptable, and
that's a risk management function.
So can we get a status update, Madam Chair, from Risk Management
regarding what they're doing on this specific topic?
Thank you. Yes, Alderman.
Yes.
Alderman Villegas.
Thank you, Madam Chair, and for my colleague from the Second Ward, we just
passed an ordinance out of the Economic Capital Technology Development
Committee requiring CDOT as well as DTI to work collectively
to put forward an asset management software that will take a look at
all of the assets in the city, inclusive of light poles,
sidewalks, streets,
et cetera, for their condition. So that way, the departments responsible for
those
categories would have some knowledge as to what the life of
the asset is, what the plan is to request funding for those, and
again, to minimize the risk to the City of Chicago.
That just passed out of the committee last week, and we look forward to passing it
on Wednesday this week.
Thank you, Madam Chair.
Thank you.
Alderman Lopez.
Thank you, Chairman. I appreciate the second indulgence.
Is it allowable or permissible to say how many other lawsuits similar to this with
regards to city service complaints we have in the hopper?
I can get you that answer through the chair.
Okay. If you could provide that through the chair, and then I think-
And just for clarification, you want it for
accidents, issues like this for all?
So what I would like to request, Chairman,
is as of today, how many cases that we
have that deal similarly with
unanswered 311 requests?
Okay. That's clear. Thank you.
Seeing no other questions, is there a motion to recommend approval of this
item? So moved by Alderman O'Shea, recommending do pass.
All those in favor signify by saying aye. Aye.
Opposed? In the opinion of the chair, the ayes have it.
We'll now move to Case 2B.
Thank you, Margaret. Carl Reid versus Richard Zule at
al., case number
23C17186,
in the amount of $9.5 million.
For this case, we're joined by Deputy Corporation Counsel, Jessica
Felker. Good morning.
Yes, I'm here to present the case of Carl Reid versus Richard Zule,
and we recommend settlement in the amount of $9.5 million.
Plaintiff Carl Reid was convicted of the 2001 stabbing death of
his neighbor, Kim Van Vo. Four and a half years
later, after he was arrested on December 5th,
2005, Reid entered a plea of guilty and was
sentenced to 27 years in the Illinois Department of Corrections.
In 2020, Governor Pritzker commuted
Reid's sentence and granted him a compassionate release based on
COVID-19 concerns and his claim of actual
innocence. In March 2020, Reid filed a
petition for post-conviction relief, asserting actual
innocence. On May 26th, 2023,
without opposition, the Circuit Court of Cook County granted the petition,
vacated Reid's conviction and sentence, and granted the state's
motion to dismiss the case. In total, Reid served
18 years and 8 months in custody for the murder of Mr.
Van Vo, followed by approximately three years of mandatory
supervised release.Reed did file a certificate of
innocence petition, which the state did not oppose, but the certificate
was denied by the court. He is currently appealing that decision.
Reed filed suit against the City of Chicago, Detective Timothy
Thompson, who is now deceased, and Detective Richard Zuley.
He also filed suit against an assistant state's attorney.
He asserts claims under the federal claims of
fabrication of evidence, suppression of exculpatory evidence, a
coerced and fabricated confession, as well as other
federal claims. He also brought a claim against the
city for a policy and practice that led to his wrongful
conviction. Finally, he brought state law claims including
malicious prosecution, intentional infliction of emotional distress, and
conspiracy. As to the underlying incident, on
July 19th, 2001, DeLong Reed,
who is no relation to the plaintiff, lived in apartment
4946 North Sheridan and shared an adjoining bathroom with Mr.
Kim Van Vo.
He contacted his apartment manager regarding a foul smell
emanating from Mr. Van Vo's apartment.
Around 2:25 PM,
police arrived and discovered Mr.
Van Vo, who had been stabbed 11 times, in a state of
advanced decomposition. There were no signs of forced
entry or burglary. Date of death was estimated to be three
days earlier. Plaintiff Carl Reed lived in the same apartment
building on the same floor as the victim.
A man named Ricardo Burns showed up to the apartment building on July
19th, 2001, the day the body was found.
He was in the victim's car looking for plaintiff.
Burns told the property manager that he was returning the
car to plaintiff. Burns was interviewed by
detectives and gave varying accounts of his interaction with plaintiff, but
asserted in each of his statements that the
plaintiff had tried to sell Burns the car and Burns did not know it was the
victim's. Detectives stated that plaintiff Carl Reed
voluntarily agreed to come in for questioning.
Reed was interviewed and initially denied knowing Burns or anything
about the car. Detectives spoke to other witnesses while Reed remained at the
station. Reed was interviewed several times and gave several different
versions, always denying, until approximately 44
hours into his time at the station, he confessed.
In his reported confession, Reed told detectives that he offered to have sex with
Mr. Van Vo for $400, but actually planned to rob
him.
Mr. Reed told Mr. Van Vo before anything happened, Reed needed to
see that Mr. Van Vo had the $400. When the victim
refused to show Reed the money, they got into a fight and Reed stabbed
the victim multiple times.
At that time, forensic testing was done on various items at the scene without any
results tying the items to Reed. However, no
DNA testing was conducted on the knife suspected to be the murder
weapon. On December 5th, 2005, after four and a half
years in jail, Reed pleaded guilty to the murder.
In post-conviction proceedings, DNA testing was undertaken,
including on the suspected murder weapon, the knife.
And Reed's DNA was not found on the knife or anywhere
in the apartment. Reed's claims are premised on allegations
that detectives physically and psychologically coerced him into falsely
confessing. He alleges that he is illiterate with an IQ of
65, and therefore could not have read or knowingly signed a handwritten
confession, which he contends was fabricated and nonsensical.
Reed alleges that during the 44 hours in custody,
defendant officers denied him the access to necessary insulin for his
diabetes. Also, Reed will allege that the DNA
testing proves he's innocent, which confirmed his DNA
was not found on the victim, inside the apartment, or on the knife.
Plaintiff further alleges that his years in custody at the Illinois
Department of Corrections
ended in him receiving inadequate care for his
diabetes. It caused him to suffer from related chronic kidney
disease requiring dialysis, and eventually the amputation of both
his feet.
Considering the risks of litigation and the potential damages associated
with plaintiff's almost 19 years incarceration, the law department
recommends the settlement for a total of $9.5 million,
inclusive of attorney's fees and costs, to avoid the financial
exposure that could result from a jury trial.
Reed may seek damages at trial of $40
million or more. If settlement is not authorized by city
council, the city defendants and plaintiffs will complete expert discovery,
summary judgment briefing, followed by a trial.
Plaintiff's counsel will also be entitled to attorney's fees if he is successful at
trial, which could be in the range of $3 to $5 million.
To the city's knowledge, the county has not reached a settlement as of this date
and is continuing to litigate the case.
So for all these reasons, the law department recommends this settlement in the
amount of $9.5 million.
Thank you, Jessica.
Vice Chair Conway.
Were there any other witnesses in this case, and have they
recanted?
So the two main witnesses are Burns and DeLong
Reed, and neither of them have recanted.
But neither of them witnessed the murder.
Sure.
They have not recanted from their stories that they saw or
that Mr.
Reed, the plaintiff, had the victim's car and tried to sell it
to Mr. Burns.
Yeah. I will tell you, I wrestled with this one, noting
the certificate of innocence was not granted, the issue with the witnesses, but
after sort of thinking about the facts on balance, the
IQ of 65 of the plaintiff, the
fact that the plaintiff has no feet today, which obviously make him a sympathetic
plaintiff to say the least. No DNA on the murder weapon, despite it being a
stabbing.
And 44 hours, nearly the maximum time before a
confession. I think all those factsTogether
lean
towards settlement. So I will be in support of the settlement, Madam Chairman.
Chairwoman. Thank you.
Thank you, Vice Chair. Jessica, has he
submitted a lawsuit against the state's attorney?
Yeah, the lawsuit against the county is still pending, and they have
declined to settle at this point as far as we know.
Any other questions from members of the committee?
Seeing none, may I have a motion to
approve this item? So moved by Vice Chair Conway
recommending due pass. All those in favor signify by saying aye.
Aye. Opposed.
Y'all got to speak up now.
Thank you. I-
Oh, please don't Alderman Lopez. Not on this, please.
So the due pass recommendation will be reported out at the next city council
meeting. Thank you so much, Jessica.
Thank you, Chairman.
Moving on to item number three from the Department of Finance is
an ordinance authorizing the issuance of the city's water revenue
bonds project and refunding series
2026.
For this presentation, we're joined by Acting
CFO Steven Maher
and Brendan White, Assistant Commissioner from the Department of
Finance. We have
Commissioner Randy Connor on
virtually, and Joel Vieira, the First Deputy
Commissioner of the Department of Water, are with us.
I just also want to commend the
members of the city council for showing up at the briefings.
It was pretty well attended. Thank you, Alderman Hall.
I'm glad that you
are thankful.
All right.
CFO Maher.
Good morning. Can everyone hear me okay?
Yeah.
Very good.
So we'll just jump into the first slide.
Today, we've got an ordinance in front of you related to the issuance of second
lien water revenue bonds.
Oh, okay.
Mm-hmm.
Oh, no, it's not.
Okay.
So today we've got an issuance of second lien water revenue bonds
in front of you. The top of this slide, you can see our current water bond
ratings from S&P, Fitch, and Kroll.
This is an enterprise fund credit like our airport, so the credit rating
agencies understand the importance of this system to the city's
functioning and wellbeing.
There are three main components to the ordinance in front of you today.
There's a component for six
hundred and sixty-one million of principal amount of some project
Series A bonds. These 2026 A bonds will fund
approximately 14 months of Department of Water Management capital needs through
August of 2027.
The second component is one hundred and sixty-four million of principal amount
associated with a Series C bond, excuse me, Series B bond.
These bonds will refinance portions of outstanding bonds from
2004 and 2016.
Under current market conditions, we're estimating that that refinancing will
generate approximately nine million dollars in cash flow savings, and
this does not involve any extension of the final maturity or increase in average
life of those bonds.
And then the third component at the bottom of the slide, about fifty million in
principal amount associated with a Series C set of bonds.
This is related to a potential tender of outstanding bonds from
2017, and we're only going to execute this if interest rates are
favorable as we move forward.
This tender component is currently estimated to generate approximately four point
three million dollars in savings.
So if you add that to the nine million from the second bullet, we're estimating
around thirteen point three million dollars in savings across
these refinancings and tenders associated with this transaction.
This next slide displays the bond deal team we're going to use for this
transaction. Working from the top left, Mesirow, which is
headquartered here in Chicago, is going to be serving as the book runner or senior
manager on this transaction.
We're also utilizing Academy and PNC, Hilltop and
Cabrera, Blalock Van, as well as Sandbloss.
A number of the firms there you can note are
MBEs or VBEs.
And then on the second portion of the slide, the bottom half, you can see the legal
and advisory teams we're using for this transaction.
Miller Canfield, as well as Holt, Lee, Pearson and Farrar are serving as bond
counsel and co-bond counsel respectively.
Cotilliss and Associates, as well as Burke, Burns and Pennelli serving as
disclosure counsel and co-disclosure counsel respectively.
We have RSI and Prag serving as co-financial advisors on
this transaction, as well as BNY Mellon serving as the trustee.
On the next slide, we're showing how this series 2026 financing
impacts the water debt service profile in aggregate.
There's a few bullets on the left-hand side we'll walk through, and then we'll walk
through the graph on the right-hand side as well.
The first important point here is that the assets these
bonds will fund have very long, useful lives.
Water mains and lead service lines last fifty to a hundred years.
Second, these bonds, like past water project bonds, typically
align the average life of the bonds with the average useful life of the
assets.And then the third point is that these bonds
will also be structured to fit within annual projected
2.5% consumer price index rate increases.
A level debt service structure would require us to
increase water rates approximately 10% in 2028 and
2029 to accommodate more near-term principal
amortization.
If we just move over to the chart on the right-hand side, you can see there in the
dark gray at the bottom of each of these stacked bars, that's our
existing second lien debt service.
In green, that's our existing Illinois Environmental Protection
Agency debt service.
In yellow, that's our existing WIFIA debt service.
That's a loan that the city received from the federal government a few years ago.
In dark blue, that's the refunding debt service, so that's the B and C series that
we've talked about at the outset. And the light blue at the very
top, that's the debt service associated with the new money of the Series A
portion that we're talking about.
So we're expecting to start paying debt service in November of this year.
Our water bonds have May and November payments of each year.
And then the last payment, or at least the last projected payment on this
particular series that we have in front of you today, will be in November 1 of
2066. You can see there
that on the x-axis of this chart.
The next few slides,
Joel from DWM will cover.
Good morning, everybody. Joel Viera, Department of Water Management.
So these slides kind of present
the Water Department's plan to spend
these investments.
So in the Water Department, we have two general types of projects.
We have water projects, and we have sewer projects.
So we're talking about sewer projects here.
And in particular, we're talking about the water bond.
So the water bond
funds a couple of buckets of programs.
So it covers facilities, it covers water main replacement, it
covers public side lead service line replacement, covers
restoration costs, covers our meter costs, it covers the
cost for our program management office and our construction
management.
We fund our programs from a variety of
sources, but water revenue bonds is the most critical component.
As the CFO mentioned, we also fund
our programs from what's called the WIFIA loan, but we also get IEPA loans
as well. So on this slide, you can see just a
quick synopsis of some of the work
that the bonds will cover. Number one is
facility investments in our pumping stations and our
purification plants. So we have Jardine as the largest
water treatment plant in the world.
Sawyer Plant on the South Side is the eighth largest.
We have 12 pumping stations. That is the
mechanism by which we all get our water.
So these investments cover, or these bonds cover investments
at the purification plants and at seven of the pumping
stations. We're also doing meter replacements.
These are replacements for our current meters.
Our current meters only have a useful life of between 15 and 20
years, so we have to start to replace all of
those. Next slide.
We'll be doing about 20 miles of new water main installation with this
funding.
These cover, for 2026, some of
the projects that the alders were briefed on at
the CIP briefings earlier this year.
2026 also going into 2027,
covers the cost to replace approximately 12,000 lead service
lines with new copper services. The Water Department
is going to be subject to what's called the Lead and Copper Rule
Improvements, beginning in 2027.
This establishes minimum annual
replacements.
For us in Chicago, it will require a minimum of at least
19,000 replacements per year,
beginning in 2027, but really going into 2028.
And we have now structured our capital improvement programs on both the
water and the sewer side sort of to coincide with us meeting
those targets for our lead service line replacement.
The funds also cover street restoration costs for our repair
work and the program management office cost, which does the
design for all of our facilities and our water main
replacements and our construction management services.
And if we look at this next slide, this is just a quick snapshot
of the mileage for 2026 and where it's
located. You can see there's a relatively even distribution
across both the South, Central, and North
districts for water main replacement.
This is water main replacement and lead service line replacement.
That is the conclusion of the presentation for today, but we're happy
to answer your questions.
Thank you. I want to acknowledge Alderman Rodriguez Sanchez
has joined us in person. Alderman Mitchell,
are you here?
All right.
Steve, at the briefing on Friday, it said that these
projects would cover through June-
Yes, Chairman, I'm here.
Yeah, you're late.
Would cover through June 2027.
In this
presentation, it says August. What's changed between now and
Friday and today?
Alder Gal, we'll have to go back and check that.
I thought the presentation on Friday did display through August.
I can
take that question, Chair.
Okay.
So this funding covers 14 months, six months of
2026 and eight months in 2027. When we had the
slide up Friday morning, there was an error on the slide.
It said June, but we corrected that in the afternoon sessions
to reflect the August timeline.
Okay, thank you.
Chairman
Viegas.
Thank you.
By Vice Chair Conway.
Thank you, Madam Chair, and I wanted to first thank you for the
joint committee around capital as well as finance.
I think this is a good process moving forward, and you have my commitment
that we will work together to figure out how we can make sure that not
only the departments' voices are heard, but also our colleagues' voices are heard
when it comes to capital improvements.
So thank you for that collaboration.
For
water, I see that you have a PMO and CM
services in the slide. I was wondering, have those
companies already been selected?
What page are you referring to?
Madam Chair, I think it was the second to the last page, if I'm not mistaken.
Right there. Last bullet.
Project Program Management Office, as well as Construction Management
Service.
Have those PMO and CMS teams been selected already?
So Joel Vieira.
So the Program Management Office contract was
executed in December of 2022 with a
start date of January 2023.
That is a
five-year contract.
The construction management contract was executed in May of
2023, and it is also a five-year contract as
well.
Could you, through the chair, provide, or if you know now, who those companies are
and whether or not they're headquartered in Chicago
as the prime?
I do have the names.
Yeah.
So for on the PMO side,
it's AECOM, DB Sterling,
2IM Group, Ardmore Roderich, Clarity
Partners, Rubinos and Macia,
Primera Engineering. For the construction management, it's
Primera, Cotter,
AECOM, DB Sterling,
V3,
SQN,
PDF, Discoto,
MKM, and Olux. Those are all local.
Thank you. If at some point you could provide it through the chair,
the percentage as well as where these firms are headquartered.
I think the reason why I'm getting to that is because these are large contracts
where we've seen, and we're missing an opportunity to
have Chicago firms that are headquartered here
participate in the prime role. What we've seen is that over the course of the
years, larger firms that are not headquartered in
Illinois, and Chicago specifically, have benefited from
these contracts, are taking corporate dollars and corporate profits
elsewhere. So I'd like to see if there's a push from Water as well as
CDOT and other opportunities for procurement, that there would be
opportunities for Chicago-headquartered firms, given the fact
that those dollars stay here, and those employees
pay taxes here and purchase property in Illinois.
So I'd like to see if there could be a push from
you guys moving forward on that.
Thank you. I want to repeat what I think I heard you ask for.
Yes, ma'am.
You're asking for a listing of the companies that make up the program
management and construction management services portion of
this program. You want to know the location where they
are. You're interested in MBE, WBE
designation, if any.
And a percentage of the work that they're
contracted for.
Okay. Percentage, and if you can give amounts on that.
Yes, ma'am.
I'm going to add amounts to that. That would be helpful through the chair.
Thank you.
Madam Chair.
Thank you. Vice Chair Conway.
Madam Chair.
Excuse me, I'll get to you.
I just wanted you to add something to that before you left that subject, that's
all.
Who is that speaking?
This is Alderman Irvin.
Hi, Chairman Irvin. Go ahead.
No, just the racial makeup of the MBE components as well.
Okay, and the makeup of the MBE/WBE
component of the total amount of work.
Thank you, Madam Chair.
Thank you. Vice Chair Conway.
Yeah, could we go back to slide...
The first slide after the cover. So slide one, presumably.
So,
noting our ratings, they're obviously much higher than our general
obligation. Is that because these bonds are
collateralized by the future payments of water
bills?
Or are they collateralized by the water system itself? I don't know.
Yeah. So Steven Maher, acting CFO.
That is one reason why,
Alder Conway.
The rating agencies use different methodologies for different types of bonds.
So our water revenue bonds are graded against a different kind of methodology
than our geo bonds, and similarly for our airports.
For our water revenue bonds, the primary characteristic they're looking for is a
strong customer base, and of course, the city has that between
$2.7 million in residents plus suburban customers,
as well as our financial performance at the water system specifically, as well as
the fact that they're secured by
water revenues that residents and suburban customers pay.
So, all right.
So it is secured by the water-
That's right
... revenue. If for-Somehow, if the city started using a
lot less water, would we, city government,
be on the hook for the bonds or no? Presumably yes, but I don't know.
So if that was the case, then we would need
to change our water rates to increase them to provide for
cover operations as well as debt service on these bonds.
That would be the mechanism through which we would address that issue.
Is that something that happens automatically, or would this body have to do that
or the water-
Yeah. So water revenue rates currently, they increase at
the lesser of CPI or 5% of
inflation.
Okay.
So for the past decade or so, water rates have increased at inflation.
Great. That actually was going to be a subsequent question, so I'm glad you
answered it. If you go to slide three,
so I notice
that all of this debt is second
lien, and it seems to be
the big gray bars are existing second lien.
It looks like we're refinancing some second lien.
Where's the first lien?
Yeah.
Thank you for your question. This is a sort of a fun historical
question. It used to be the case that the city, the water revenue bonds were
issued both on a senior lien and a second lien.
Okay.
And for the benefit of those that may not understand what that difference is, the
senior lien water revenue bonds had...
They were issued under different constraints than the second lien water revenue
bonds.
I think the last issuance of senior lien water revenue bonds occurred in the late
'90s or early 2000s. Of course, bonds issued in the late '90s or
early 2000s didn't mature until the past few years.
I think it actually matured in 2020 or 2021.
So we no longer have any senior lien bonds outstanding
anymore, although in the '90s and 2000s we did, and even up through the
2015 and 2020 we did.
Now that we don't have any senior lien bonds, our second lien bonds are
effectively our senior lien bonds.
So one of the things that we're doing as part of this transaction when we go
to offer these bonds to investors, on the cover page of that offering
document-
Mm-hmm
... we're actually going to remove the word second lien because we no longer have
any senior lien bonds outstanding.
And hopefully that will provide investors a little clarity on
the fact that these second lien bonds are really senior
because there's nothing senior outstanding to them at the moment.
Yeah. Obviously I was confused about it, and I've done a few hundred debt
offerings, so I think it's probably good.
On this amortization schedule,
so I know the light blue bars are our payments this year.
Are those anticipated to be cash payments
made in the year allocated, like that little bar?
Is that, are we going to make that cash payment in 2026?
That's right. At the water system, our payments are in
May and November of each year.
Mm-hmm.
So 2026, we will likely issue these bonds after May
1st of this year, so our first payment would be in November.
And then in 2027, we'll make a payment in both May and November of
2027. So these correspond to the years that those payments will be made.
Great. And noting that
it seems like this will take us through August of '27, per the
previous comment, do you
anticipate another debt authorization sometime in
early or mid '27 to pick up where that one leaves off?
It is possible. We're working through...
Of course, we had capital improvement hearings over the past few weeks, working
through what an issuance in '27 might look like.
Of course, to the extent that we don't use proceeds from this bond
transaction because of weather delays or when we're digging under
the ground, we find issues that we don't foresee.
It's possible that the proceeds from this bond issuance could take us
into later in the third or fourth quarter of next year.
So we're expecting we might have a bond issue next year, but it's a little too
early to say.
That's fair. I
just want to make sure I understood what you said on the CPI.
Yeah.
So on the CPI 2.5% rate, so the number is either
the CPI capped at a maximum of 5%, but you just are
using 2.5% as a fair estimation of what you think the CPI is going to
be?
That's right.
Okay.
That's right. When we look back over the past several years, and COVID obviously is
a complicating factor, but we think 2.5% is a reasonable
estimate-
Yeah
... to make moving forward over the next three to five years.
Yeah. No, I would agree.
I've certainly one that's been concerned
about
the backloading of debt. I was dismayed that
the money that we borrowed for firefighter back pay and lawsuit settlements at
budget time, we thought it was going to get paid over three to five years, and we
have found out no principal's being paid off
till 2031, which
upset me. But I will say
in this case, we are dealing with
an asset that produces revenue. There are baked-in increases to
that revenue. The assets here are extremely
long-lived. So based on that,
I think I fully support this bond issuance, and I
encourage my colleagues to do the same. Thank you, Madam Chairwoman.
Thank you, Vice Chair Conway. I do appreciate the
conversation, the discourse that has just gone on here.
So we'll move on to...
Yeah. Well, that's what I mean.
How many times do we have to hear that from you?
And a prosecutor.
Okay.
Just joshing with you, Vice Chair.
Alderman Lopez, followed by Alderman Lee, followed by Alderman
Riley
Thank you again, Madam Chairman. I'm glad he mentioned his laud pedigrees because
now my bingo card is complete for the day.
I have a couple questions and a couple concerns.
First and foremost, I have no intention of supporting this.
None.
I am sick and tired of this administration asking me to support debt, to
support infrastructure, and to see my ward and the six communities that it
represents completely ignored,
not one, but two years in a row. And if you're telling me that this is going into
2027, then that means I know what I could expect next year too, right?
I'm not going to just sit here and keep saying yes to all this debt.
Yes to an administration that refuses to work with people.
That's not your problem, that's the two commissioners' problem.
But the cycle repeats itself over and over and
over again. And I'm glad you brought up CIP because my map was completely blank.
They had to put on items from last year from my menu to try and tell me that
those were what your investments were, and they're not.
They are my investments, what is authorized by this council for every
alderman. What also concerns me about this,
Madam Chairman and members of the committee,
is that what we learned
not too long ago
by the Department of Budget and Management is that we continuously
find open ends of credit that
nobody seems to know about.
And I think the problem, to be perfectly honest, lies with
section 1.02,
either in
subsections
L, M, or N, which deal with the authorized
borrowing authority issued by the city council.
If I'm reading this correctly,
there's no expiration date to our bonding authority that we're giving, correct?
I believe that is technically correct.
So that's a yes, it is correct.
So then,
in this matter and in all bonding matters,
let's say you are asking for how much in total?
661.
So the ordinance outlines two separate components.
We're asking for $700 million, and Brendan, please correct me if I err here,
$700 million in new money capacity.
That is associated with this $661 million that we've got
here on this slide. And then in terms of our funding capacity, the
ordinance lays out, I think, a request for $350 million.
So roughly one billion
plus-
That's correct. A little more than a billion
... if I'm not thinking correct.
And that is what is listed in
section K,
one billion fifty million, correct?
That's right. And we tried to right-size this
ordinance.
It's possible that as we work forward over the next few weeks, this
$661 million
could go down or it could go up. I expect it'll stay around
$661 million. But in the event that there's another project that we
want to add to the list, it might go up from $661 to
$675 or to $680, but we've given that $700 million
buffer, again, as our max.
So that $39 million buffer is-
That's right
... leeway
should a department decide that they want to squeeze something in down the road
without having to come back and tell us, correct?
No. That's if the Department of Water Management sees fit to add
another relatively small project-
I swear I just said that
... to this list.
I just said that, that if the department chooses to add a
project
on its own without having to ask us for money,
that's what the $39 million is, correct?
Correct.
Okay. I
know these answers and I appreciate you trying to dance around
them, but I'm concerned because what we
have seen in the past is a growing,
in my opinion, abuse of the authority that we're giving because
there's some intentionality, which I know that both this committee and the
Committee on Economic Capital Technology Development are both trying
to correct.
But the
multi-billion dollar blank checks are
troublesome. We have one department that, as you
just stated for one of my colleagues, caps CPI increases
at 2.5%, guesstimating that it's going to be roughly 5%,
based on what we are giving you the authority
for the next
generation to execute upon,
while another department arbitrarily assigns costs
at 8% to 10%,
based on the same funding mechanisms and models that we're discussing today.
So I take serious issue with
adding hundreds of millions of dollars at a time.
Yes, I appreciate that we're trying to refund some of our debt.
I understand that we're trying to save money, and yes, saving $13 million,
13.3 I think is what you have up there, is a good
thing. But I think there needs to be, one, some clarity of
purpose with what we're doing, some commitments of sticking within the budget that
the departments are putting forward, and you all both need to be able to say, "This
is what we're sticking to," so that there is some transparency to what we're
being asked to pay for moving forward, and there needs to be some finality.
We can no longer continue to have surprise lines of credit
dumped on us that we've forgotten about
and then told that we have to pay for them later.
So Chairman, with that, I would like to be recorded as a no
on this item. Thank you.
All right. When we get to that point, we'll record you as a
no.Commissioner
Vieira,
the cushion dollars, could that
be used for emergencies that
might happen across the city of Chicago?
Yes, Chair. So the biggest difference between us
and other departments is that our infrastructure is
underground, and so we really can't tell how much we're going to have to
spend on each individual project until we start going
underground. Great example of that is a water main project
we recently did on the south side of the city,
where we started digging and the infrastructure is all in bedrock.
So now that's going to delay you, it's going to cause increased cost,
and additional inconvenience for folks.
At our treatment plants and our pumping stations,
the costs are very high because of the specialized nature
of the infrastructure. If you go back
or forward one of the slides.
Right here. So you can see that top picture, there at the
Cermak Avenue pumping station, which is on Harrison Street.
That is a diver. He's going down, in a wetsuit
into the tunnel, which is 150 feet underground.
Our costs are very, very large, and when there are emergencies, we have
to deal with them when we encounter them.
We cannot wait, because it's water.
The water system is all interconnected.
So our costs are very high because of the specialized nature of the infrastructure,
but that additional funding provides us that
additional funding source we need when we encounter emergencies such
as these.
Thank you, Joel.
Alderman Lee,
followed by Alderman Riley.
Thank you, Madam Chair.
Following up on a couple of points that my colleague, Alderman Lopez, made.
One of the questions that I have is, what was the amount of the
previous bond before this one that you're proposing now?
Yeah. So the most recent issuance of water revenue
bonds was in 2023.
The principal amount of that transaction was
$576,415,000.
And we've spent through all of that already?
Yes. So, of that funding on the water revenue
bond,
we have remaining about $24 million.
Okay.
That was really my question, how much is remaining?
I know firsthand some of these water projects that are going on, Joel.
We've
got a sewer
main replacement going on. We've got
water main lines that date back to the 1880s.
So I appreciate that you've answered some questions around just the
unpredictability
of what it is to work underground.
Can you, and I don't expect you to have this here today, but through the chair, can
somebody provide how much of the previous bond
authorizations funding was spent on emergency repairs?
Sure.
And then I know that
all of these construction projects are always sort of weather dependent.
Can you talk a little bit about how the weather's been impacting current water
projects? Because I'm also curious about the severity of the weather that
we've had, how that's going to push potentially new projects
back,
given the bond issuance that we're talking about today.
Sure. So,
our biggest challenge is in the winter.
So when it gets below 15 degrees, we cannot work, so we can't do lead service
line replacements, for example.
In the summer months, the biggest challenge is, of course, flooding.
So if we're working on a capital project, like we're replacing a water main or a
sewer main, but we get an incident with a lot of flooding,
then the in-house crews are pulled away from their capital
projects to help address some of the flooding concerns.
So climate change is definitely a challenge we have to
address here,
but we can't work in extreme cold, and we also can't work in extreme heat.
We're working on solutions for flooding.
But it definitely does raise the cost of everything that
we do.
Thank you. And then on
the
restoration. Sorry, I haven't had enough coffee yet this morning.
On restoration, are you using in-house construction through the water department to
do that?
So we use both in-house construction and contractors.
The in-house construction folks
do the work that's more urgent and less
complicated, and then the contractors will do the bigger stretches and the more
complex components.
And are you all fully staffed for the season moving
forward?
Yes.
Great.
Thank you. That's all I've got for water. But for you, Mr.
Marr,
throughout the last several budgets and especially this
last one, we've talked a lot about the bond issuances and the fact that we
established last year, there's still over a billion dollars of bond
authorization that's yet remained untapped.
And it is a big concern for all of us, obviously, in this environment.
Can you talk a little bit about what the disposition is of
some of the, well, in particular, the prior bond authorizations that have not been
utilized? Why we keep coming back for more?
I know water is a separate issue. But while I've got you in the hot
seat, I thought I'd raise the question because I think that's something that we
need to make sure we're talking about.
Yeah. I appreciate the question, and let me just take the water system first
and then get back to the core of your question.
At the water system
in 2023, we issued about $576 million worth of
bonds.Before that, the prior new money
issuance was in 2014. So it's been really quite a while since the water
fund has issued
new money for new projects. But of course, as Joel said,
the water system is funded by a mix of sources, right?
So funds on hand, we call PAYG, IEPA loans, WIFIA
loan, as well as bond proceeds.
In conjunction with each of the transactions that we've done at the water system,
we've come before council to ask for additional ordinance authority.
And there are different ways we can write these ordinances, more or
less parameters or fewer or greater parameters.
One of the things that we could
do moving forward is to really think about,
for example, is 700 million the appropriate number, or should it be 690
or 680 or 670?
I think at the water system, we've been pretty good
about tying projects and new money issuances with the
ordinances that we bring before city council.
On general obligation bonds, the story is a little bit more
nuanced. So we've got GO bonds that have
been issued in coordination with the ordinance passed for the Chicago Recovery
Plan.
We've got GO ordinances associated with our capital improvement plan.
We've got GO ordinances associated with our housing economic development
bonds. So they're just sort of a larger suite of programs that we
fund with bonds repaid from property taxes
than at the water system. I think that's part of the reason why we
have sort of additional ordinance or additional ordinance authority
outstanding on
the GO credit than we do on the water credit.
I understand that, yeah. We can talk about that as separate.
I'm not trying to hijack the meeting.
I just thought I'd ask since we're on the subject, so thank you.
Thank you, Alderman Lee, because you see this stack I have here, right?
All right. Alderman Riley.
Thank you, Madam Chairman.
Followed by Alderman Mitts.
If you go back to the slide, and maybe it's three. There we go.
I wanted to talk about your projected CPI rate.
Who came up with two and a half percent?
So in all our transactions, whether it's a GO or a water OHere, we work
with our financial advisors as well, their bond underwriting team,
as well as the in-house expertise that we have.
Okay. And so how did we arrive at two and a half?
Two and a half, when we look back over the course of the past five as well as 10
years, we see two and a half being a reasonable estimate based on
especially costs at the water system.
Okay.
Do you do any forward-looking?
We're currently at war in the Middle East.
The Strait of Hormuz is closed.
20% of our oil supply for the world travels through that strait.
It doesn't seem like there's any end in sight for the campaign that's occurring
there.
And I can tell you that
analysts from Goldman Sachs are projecting a much higher
CPI than you are.
And they're not talking about for a few months, they're talking about
years.
And we're talking at least double your projection.
So again, you're coming to this body with a
projection,
but when was this projection arrived upon?
Did it predate the war that's occurring in the Middle East?
We've developed it over the past several weeks and months.
Several weeks?
Yeah, in anticipation of this transaction.
Okay. And did anyone on your team speak with analysts at Goldman
Sachs?
No, we did not.
Or any of the other major financial interests-
No
... on Wall Street?
We did not.
Of course, as I said at the outset, we have a team of financial advisor-
Okay
... and a bond underwriter here that have provided us some insight.
And the other thing I'd say is that the
long-term projections that the Federal Reserve puts out is sort
of one of the guiding lights we use to inform these projections.
Okay. Well, I'm not sure we're going to be getting a lot of helpful information
from them in the near term.
I'm concerned that the CPI rate that you're touting here
is not accurate by a long shot. And through
the chair, I'd like to know who all advises you
on setting that rate when you come to this body seeking additional
borrowing authority.
Because I would argue that that rate is
more than half
of what projections we're seeing coming from the street right now,
for the next year plus, if not two.
And each year can cost us a lot of money.
So I'd appreciate that, Madam Chairman, but just wanted to flag this, that
current events have impacts on CPI.
And when a barrel of oil is going for over 120
bucks, that's going to push costs up, certainly for
food and other items. So I'd appreciate that, Madam
Chairman.
Thank you, Alderman Riley. Alderman Mitts.
Thank you, Madam Chairman.
I apologize, I missed
Friday's
briefing that you had in finance where we talked about the water
bond. So I wanted to ask a question surrounding the
sewer replacement. And in 2023, we're still
dealing with the flood, so I have to be able to share.
Can you tell me the number of sewers replacement that are
going into '37? Can you give me
that information?
You can give it through the chair, as long as I have something to take back.
Water mains, you can give me that as well.
Yes. So-
Um
What was the other one? Street restoration.
I guess that's after the work being done.
And then is there any deep tunnels
pumping that you're going to be doing as well?
Is that anything coming out of this bond?
So,
Alderwoman Mitts,
so on the sewer side,
this water bond is actually paying for a little bit of
sewer. That's for the lead service line replacements.
Okay.
So this will pay for a portion of that.
For
2026,
our projections are that we're going to be doing
10 miles of sewer main replacements this year.
And then because we have to comply with the lead and copper rule in
out years, the way we're complying with that is, in addition to
doing more block-level lead service line replacements, we are also going to be
doing more water main replacements and more sewer main replacements.
In addition to that, the city does have an agreement now
with HUD on some community development block grant
disaster recovery funding-
Mm-hmm
... that will be for sewer projects, in
particular. So, for
2026, the water department is looking at doing
about 21 miles of water main and about nine
miles of sewer main, and then those numbers start to
increase every year. And then going into
2029, we're going to be doing about 34 miles of
water and about
16 miles of sewer every year, and 19,000 lead
service line replacements across the board there.
In addition, on the sewer, and I know that we're in
the same ward, we had the same problem with the flooding in
2023. One of the other things that we, the water department, are looking
at is the construction of a west side
tunnel, which will substantially remediate flooding
there. That will take a very long time,
but we are moving forward with that design.
It will take time, but the benefit will be tremendous and the benefit-
Estimate the time frame. Can you give a roundabout?
So
we are just starting the conceptual designs for that.
We do have a consultant who looked at that for us.
We have to look and see what the engineering cost would be.
So what's the timeframe for a tunnel?
We'd need a lot of help from others on that, but I would say,
five to 10 years.
Okay.
Thank you. You have other questions, Alderman Mitts?
No. That was it, but if you could pass that information to me
through the chair, I'd appreciate it.
All right.
Thank you, Madam Chairman.
You're welcome. Before
I ask for a motion to recommend approval of this item, I see
we have our...
Alderman Villegas, you.
Sorry, Madam Chair. I just have one question while the CFO was talking
about the GO bonds related to CIP. So I just wanted to get
clarification. Although we've provided the authority for
spending, there still needs to be some type of ordinance or
vehicle that would identify the projects that are going to be
funded with the authority. Is that accurate?
When we do general obligation bonds or water revenue bonds,
as part of that issue-
No, not water. I'm talking about strictly GO, CIP,
capital improvements, roads, sidewalks, lighting,
alleys, et cetera.
Not water
In any case, we develop a list of projects that is shared with
attorneys. They then help make a tax determination.
So we have a project list associated with every transaction that we do.
So you have $3 billion worth of projects right now
that you have created
based on the authority that you've requested. Is that accurate?
I would have to talk with the budget director.
Yeah, I would prefer that you... Because the management ordinance that
passed requires that the city
council have the ability to talk about capital along
with the departments to find out what the priorities are.
So that needs to occur in order to make sure that we can support
the
appropriating authority. Now, we've given you the bonding
authority, but that doesn't mean that we've given you the authority to spend it
yet,
for capital.
I believe that's
a fair interpretation of the management ordinance that was passed in
December, that that is going to be part of the process or a requirement moving
forward.
I think, Chairman Villegas, that line of
questioning we probably need to take offline.
Okay. No problem.
Okay?
Yes, ma'am.
Before I ask for a motion on this item, I wanted to
give Commissioner Randy Connor, if he wants to take it,
an opportunity to speak on this matter.
Commissioner?
Good morning, Madam Chairman, and Finance Committee. Thank you.
Can you hear me okay?
Yes.
Yeah. So I did want to just take the time to say thank you for the consideration of
this bond. This work is going to be very
significant over the next few years, especially as we try to
continue our replacement of lead service lines.
And what we found out is the way for us to do that is to be able to
increase our water main replacement.
But it also comes along with being able to do additional work at our
pumping stations as well as our treatment plants, as we are trying to
become a more regional water supplier at this point.
As we've noticed over the last few years that
theThe underground water aquifers
are starting to dry up in other parts of the state, and people really want
to have Lake Michigan water. And at this point, we're the only ones that can really
provide that. We want to position ourselves to be able
to do that, as well as to
keep it as sustainable as we possibly can.
So again, thank you for your consideration.
Thank you, Commissioner. I want to acknowledge Alderman Curtis has joined
us and will be counted towards quorum.
And a motion is made by Alderman Villegas recommending do pass.
Alderman Lopez.
Just if I could ask for, through the chair,
it was referenced with regards to new money from HUD and projects going in for the
next few years. Can we have that list of the dollars spent annually
and where those projects are anticipated to be provided through the chair, please?
And can you repeat again what you're asking for?
Just so I-
Sure.
Yeah.
It was stated that the
Department of Water is now
receiving a HUD community block grant to address the
flooding, that's been referenced to Alderman Mitzi's question.
And it was stated that we're now going to have additional funding for various sewer
lead lining and other projects
ramping up through the next few years.
So if we could have a list of what that ramp-up looks like and where those projects
are going, I would appreciate that through the chair.
Commissioner Vieira, you have that?
Yes.
All right. A motion renewed by Alderman
Villegas, recommending do pass. All those in favor signify by saying
aye.
Aye.
Opposed.
Alderman Lopez will be recorded as
being a no on this matter. The do pass recommendation will be
reported out at the next city council meeting.
Thank you, Steve, and thank you, Joel.
Moving on to item number four from the Department of Housing.
It's the substitute ordinance authorizing the issuance of
multifamily housing revenue bonds and other
financial assistance to Lathrop Preservation
1C,
LP for the Lathrop Housing Redevelopment project,
located at
2600 through 2618,
2601 through 2631,
2628 through 2662,
2664 through 2704,
2633 to 2667,
2740, and 2750
through 68 North Hoyne, and
2731 through 59 North Leavitt.
And structural rehabilitation of the property located at
2567 North Hoyne,
in the 32nd Ward.
There is a substitute ordinance which has been prepared and sent
electronically to everyone. Is there a motion to accept the
substitute? So moved by Alderman Lopez.
All those in favor signify by saying aye.
Aye.
In the opinion of the chair... 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 Ann Booth from
the Department of Housing.
We're also joined by...
Say your name.
Joseph Lewis, Deputy Commissioner with the Department of Housing.
All right. Thank you.
Ms. Booth?
His name.
Thank you, Chairwoman Dowell, and members of the committee.
For the record, my name is Anna Booth from the Department of Housing.
Also attending today are individuals from the development team,
as well as CHA. From Bickerdike Redevelopment, we have
Chief Executive Officer, Joy Arguete, and Vice
President of Real Estate Development, Isaiah Horne.
From Related Midwest, we have President Kurt Bailey, Senior Vice
President Sarah Wick, Vice President Amy Maier,
and Senior Development Associate Shreya Singh.
And from CHA, we have Deputy Chief of Development, Lee Pratter,
and Development Manager, Shabo Liu.
I'm presenting the Lathrop Preservation Phase 1C transaction,
which is located on scattered sites in the 32nd Ward's Lincoln Park
community area, and the Diversity Chicago River TIF district.
The alderman is Scott Waguespack.
The developers applied in the City of Chicago's 2021
Qualified Allocation Plan funding round for mortgage
revenue bonds, tax increment financing, and
Illinois Affordable Housing Tax Credits, which are also known as
donation tax credits.
The action is to request finance committee to approve
and refer Lathrop Preservation Phase 1C to city
council for approval to authorize the issuance of
$100 million in multifamily mortgage revenue bonds,
authorize the execution of a TIF redevelopment agreement with
Lathrop Preservation Phase 1C LP for $40
million in TIF, of which $36.5 million will
be ported from the Addison South TIF, authorize the
city to transfer Illinois Affordable Housing Tax Credit proceeds
generated by the sale of these tax credits for the project known as Lathrop
1C, and designate Lathrop Preservation Phase 1C
LP as developer.
The owner will be Lathrop Preservation Phase 1C, an
Illinois limited partnershipThe developers for the proposed
transaction are Related Midwest and Bickerdike Redevelopment Corporation.
Related Midwest has over 37 plus years of experience in
developing and preserving affordable and workforce housing,
and currently owns and manages over 55,000 apartments
and homes throughout the United States.
Related has utilized some form of city assistance to build
and/or rehab over 3,000 units on various sites
throughout the Chicagoland area.
Bickerdike Redevelopment was founded in 1967,
and since its inception, Bickerdike has completed 15
previous projects utilizing some form of city assistance.
Their developments have produced over 2,200 affordable family
units in the West Town, Logan Square, Hermosa, and
Humboldt Park communities of Chicago.
Lathrop Homes is a combination of new and rehab construction,
and an architect was used for each faction of the project.
BKL was established in 2010 and is being used
for the new construction. Harley Ellis Devereaux was founded
in 1908 and is being used for the residential rehab.
And ARDA was established in 1990 and is being
used for the rehabilitation of the powerhouse.
The general contractor for this phase will be LR Contracting.
LR Contracting was founded 40 years ago.
To date,
LR has completed over 7,000 units across 20
projects in nine US cities. LR Contracting is also
Related Midwest's in-house GC firm.
The lenders, Bank of America will be the lender for the construction
loan, and Citibank N.A. will be the lender for the construction and perm
loan. Syndicators will be Bank of America for the
4% low-income housing tax credits, Stonehenge
and Citibank for historic tax credits, and Fallbrook
Financial Services Company for the donation tax credits.
The bond underwriter is Stifel Nicolaus & Company.
Stifel's counsel is Tigre Hudson & Chico & Nunez,
P.C.
Ice Miller LLP and Clark Hill are co-bond
counsel, and Cotillas & Associates and Burke,
Burns & Pinelli Limited are co-disclosure counsel.
The trustee will be Zions Bank.
So Lathrop Homes is a CHA Plan 4 transaction, and the
developers were chosen by way of a CHA-issued request for
qualifications in 2010. It is a combination of
new and rehab construction, and the entire site is located
in a landmark-registered district.
Lathrop Homes was reviewed and approved by the National Park Service and
State Historic Preservation Office and added to the National
Register of Historic Places on February 12th of 2012.
Phase 1 was completed in 2019,
and it consists of 414 rehab and new
units housed in 14 buildings, the restoration of the
Great Lawn and of the Riverwalk. Phase
2B was completed in 2023 and consists of
74 units. Phase 1C will focus on the south
side of Diversey and be comprised of the new construction of
one five-story elevator building that will house
59 units, the rehabilitation of seven buildings
that will house 250 units, the demolition of
three existing buildings, and the structural repair of the
powerhouse. All of the land is CHA-owned, and
at closing, CHA will provide a long-term ground lease.
Of the 309 units, 248, or
80%, will be available to CHA and affordable
households at the 30% up to 80% area median
income levels. 121 of the
248 will be CHA replacement units,
127 will rent to affordable households, and
61 will rent to market rate households.
All told, there will be 24 studios,
165 ones, 110
twos, and 10 three-bedroom units.
Other amenities will include landscaped courtyards, tenant
community space, and approximately 100 off-street surface parking
spaces.
The powerhouse's smokestack will be repointed and rebuilt,
and the interior will be built out as a gray box that can be built
out by a future tenant once identified.
The powerhouse building originally housed the boilers and coal stores
that delivered steam heat to all residential and administrative
buildings on-site. The restoration and adaptive
reuse is instrumental in the developer receiving the maximum
amount of historic tax credits.
So the unit breakdown for the newly constructed building, which will house
59 units,
11 will rent to households at the 30% area median income level,
24 at 60%, 10 at 80%,
and 14 market rate units. Of the 59 units,
22 of those units will consist of the CHA RAD
units. RAD is short for Rental Assistance Demonstration,
and it is a long-term Section 8 contract that ensures
long-term stable rental assistance to the development while
also ensuring long-term affordability for residents.
Tenants will pay 30% of their income toward their rent, and the Section
8 rental assistance will cover the difference.
The RAD contracts are typically 20-year renewable contracts.
For the rehab buildings, 52 units will rent at 30% area
median income, 89 at 60%,
62 at 80%, and 47 market rate
units. Ninety-nine of the 250 units will be CHA
RAD units.The average area median income for the
Lincoln Park community area is $100,600.
So HUD sets income and monthly rent limits on an annual basis.
Income limits are normally updated in April, and rent limits are normally
updated in June. The income limits shown here are for the
Chicago, Naperville, and Joliet HUD metropolitan fair market
rent areas, and affordable rents paid by the tenant is
based on the tenant's income and not on market comparables.
You can change.
Maximum rents for each defined affordable income level is published
and listed according to building construction type, number of
bedrooms, and household size. Rent per square foot
is not considered, except that HUD housing quality standards
and Chicago zoning and building codes set minimum room and
unit sizes.
You can go to the... Okay. So the funding, the financing.
As mentioned, the city will issue bonds that will be underwritten and publicly
offered by Stifel Nicolaus & Company.
The bond proceeds will be deposited into the established
project fund account, which will be held by the trustee.
Concurrent with the sale of the bonds, Bank of
America will provide a $100 million taxable
construction loan. Approximately $59
million of the bond proceeds and the CHA's $41
million loan will be used as collateral for the construction
loan.
At the initial tender date of 24 months, all of the
bonds and any accrued interest will be
redeemed, at which time Citibank will provide a $100
million tax exempt loan, which will be
used to pay off the Bank of America taxable construction loan.
And then upon achievement of stabilized operations, a
portion of the Citibank loan will be repaid from a
combination of low-income housing tax credits, historic
tax credit equity, and TIF funds. The remaining
outstanding balance of approximately $43.7 million,
which is what you see here on the screen, will convert to a
tax-exempt permanent loan and remain outstanding for the
18-year term. The bonds automatically generate the
4% tax credits, which are sold to generate equity for the
benefit of the transaction. Equity payments are funded throughout
construction to completion and finally, occupancy.
It's anticipated that the $6.6 million of tax credits
will generate approximately $63.1 million in equity for
the transaction. Bank of America is to be the
syndicator of the 4% credits.
Use of TIF was approved by CDC in
2024, and the $40 million in TIF dollars represents
16% of the financing cost. It's
anticipated that TIF will be funded in four installments,
two installments of $13.3 million at 33% and
66% construction completion respectfully, and
two installments of $6.6 million at 100%
construction completion and certificate of completion project
closeout.
Historic tax credits of approximately $30.6 million
will be sold to raise approximately $25 million of
equity for the benefit of the transaction, and Citibank is
to be the syndicator of those tax credits.
You see the CHA loan of $41 million, which I spoke of, which will be
used as collateral for the bonds. This loan will have a 43-year term
and 0% interest rate. There will be a seller's
note of $16.9 million. A seller's note is a
form of debt financing structured as an interest-bearing balloon
loan and will be subordinate to the bank and governmental
loans. It is used in these transactions to generate
donation tax credits for the benefit of the project.
Donation tax credits can be in the form of land, land leases,
or actual cash, and qualified donors receive a one-time
tax credit on their Illinois state income tax equal to
50% of the value of the donation. Donors can choose to
transfer the credits to the project, which creates additional equity for the
benefit of the transaction. In this case, the CHA land
lease is the donation, and its net appraised amount
after deducting for environmental remediation costs
is $18.6 million, which allow for up to
$9.3 million of donation tax credits to be
sold. The developer applied for $9 million of
donation tax credits, $4.5 million from each from
Ida and the city, and the $9 million will be sold and is
projected to generate $8.4 million of equity for the benefit of
the project.
Fallbrook Financial is to be the syndicator.
There will also be a comrade grant of approximately
$728,000 and state historic tax
credits of just below $2.1 million.
Rounding out the financing is a deferred developer fee of
approximately $8.5 million. The fee is not paid out of the
development budget, but out of net cash flow once all building
expenses have been paid.
On the uses side, hard costs includes the construction
contingency and a line item, and accounts for 74%
of the total development cost. There's almost $4 million in
reserves for this transaction, which accounts for 2% of total
development costs, and soft costs inclusive of the developer
fee accounts for 17% of total development
costs. The housing related per unit cost is
$728,135So
the next couple of slides are renderings.
This is looking at the south side of Diversey.
Phase one is outlined in red. The two buildings
in the upper right corner are the two buildings that were completed in the first
two phases, and the building on the left of the screen is the
senior building. It is occupied, but not part of the
redevelopment efforts.
This slide is kind of
slight, kind of light. I don't know if you can see the red, but it shows the three
buildings that will be demolished to make way for the newly constructed building
and parking surfaces. Two of the buildings are located in
the upper middle part of the slide, and one is in the lower middle part of the
slide.
This rendering shows the entire Lathrop development.
The area shaded in purple are phases 1A and 1B,
all of which are completed. The building shaded in yellow is the senior
citizen building I just spoke of. We'll go to the
next slide.
And this aerial view shows how this phase will look post-construction.
Diversey Avenue is the street at the lower left of the rendering.
East of the property is the Costco warehouse located on Damen,
just south of Diversey. Additionally, slightly southeast
of Costco on Clybourn is a strip mall that houses an
Aldi's and a Jewel-Osco. Across the river to the west
on Elston is another strip mall, as well as a Target store.
At the most southern point of this phase is the powerhouse.
As you look north, you can see the various buildings that make up this
phase. The street on the left is Leavitt, and the street on the right is
Hoyne.
For public benefits, in addition to 80% of the units being set aside
for CHA and affordable households, other public benefits
includes community amenities, green spaces,
parking, and transportation. There are bus lines that run east,
west on Diversey Avenue and north, south on Damen Avenue.
There are also designated bike lanes on Damen Avenue.
The developer will achieve 100 points by incorporating environmental
friendly features. Additionally, a minimum of
26 MWBE will be achieved. The
general contractor is looking to provide up to 1,800 temporary
construction jobs, and there will be six permanent jobs offered
post-completion.
So the timeline you see here, we introduced in March.
We're hoping to pass finance committee today and city council on
Wednesday. HUD review will take place in May and
June. Private lenders board approvals will be in June.
The financial closing will occur end of the summer, June,
July, and construction completion will take place in the third
quarter of 2028. You can
go ahead.
You can go. Oh, okay. To reiterate, the action is
to request finance committee to approve and refer Lathrop Preservation
Phase 1C to city council for approval to authorize the
issuance of $100 million in multifamily mortgage revenue
bonds, authorize the execution of a TIF redevelopment
agreement with Lathrop Preservation Phase 1C LP
for $40 million in TIF, of which $36.5 million will be
ported from the Addison South TIF, authorize the
city to transfer Illinois Affordable Housing Tax Credit proceeds
generated by the sale of these tax credits for the project known as Lathrop
1C, and designate Lathrop Preservation Phase 1C
LP as developer.
Alderman Waguespack is very supportive of this transaction and is in
attendance today. Alders Quesada and Martin are supportive
of the porting of TIF and have provided support letters.
And as mentioned, we have representatives from the development team as well as
CHA in attendance and ready to answer any questions you may have
today. Thank you.
Thank you, Ms. Booth. I always tell you, and I just want to say it
publicly, your presentations are
phenomenal. They're very thorough.
I appreciate that.
Before we go to Alderman Waguespack to
close,
are there any questions from members of the committee? Vice Chair Conway.
Thank you. The 0%
permanent loan you mentioned, and then it seemed like you mentioned a construction
loan was rolling over. Is it being converted from the
construction loan to a permanent loan at 0% rate, or what's
going on with that and the-
So the 0% interest rate
that I mentioned is on the CHA loan.
Oh.
The $41 million CHA loan, which is used as collateral.
But didn't you mention that a construction loan was going to be refinanced or
something, or did I miss?
The construction loan will be paid off.
It will not be 0%, but the construction loan, Bank of America will
provide the construction loan, and then Citibank will come
in and take out Bank of America and provide.
With the TIF.
Mm-hmm.
Got it. Now, I recall that we
voted on some TIF funds for this, I don't know, a year or so ago.
Was that for a different phase or is that...
So we did not vote on the TIF two years ago.
I brought it for a bond inducement two years ago.
Oh, okay.
And I mentioned that we would be using TIF in this phase.
Got it.
Now, looking back at the timeline, it
looks like the, and the first slide, looking at the developer was
chosen in, actually at the very beginning.
The developer was chosen in 2010.
Right.
And the first phase was completed in 2019.
It looks like this was part of a 2021
QAP program. And here we are sitting in 2026.
So I'd ask, what is
really the focal point of the extreme delay in this?
In this case. And I'm going to guess it's CHA, based upon the way this has been
going. But I don't know.
But we-- Yeah. Thank you. Mm-hmm.
Mr. Prather.
CHA,
can you come forward and answer that question for the alderman?
Certainly. This is actually, the delay in this project-
What-- Can you say your name for the recording?
Certainly. Lee Prather, Deputy Chief of Development for the Chicago Housing
Authority.
Okay.
So the delays that we and the development team encountered on this
project
had to do, in part, with getting through the finance, getting
through the design
for the work. This is a large site. So getting
through to get to city design approvals
first, and then frankly, the construction costs that
the development team came up with over the last year,
and the work that Related and Bickerdike did to get
the budget in alignment, their original costs,
projections. They had to do a lot of work
in close coordination, both with CHA and the city and the
Department of Housing, to get the project to be in alignment.
So we are in a, frankly, an excited place to be able to move
forward.
Yeah. I'm not here to lay blame, but it looks like the first phase of this project
took nine years. This phase is going to take eight years
to build, and we in this city need to figure out how to build housing
faster than that. And I'll merely echo what
was said in public comment. And clearly, this project's been around long enough and
I think it's important that we go forward today, and I want
to congratulate Alderman Waguespack on a
great project, even if it's been hanging around for a while. Thank you.
That's all I have.
Thank you. Alderman Burnett, followed by Alderman Villegas.
Thank you, Chairwoman.
Could you talk a little bit more about the CHA loan again?
I'm sorry to have you repeat yourself, but the details of how it's structured.
Ms.
Prather. Certainly. So the CHA board
approved a $41 million in capital funds, and we have
agreed, as we have done on other 4% transactions,
to be able to use the CHA funding to help
collateralize the loan. This reduces the interest
rate for the transaction and helps reduce total costs.
How many times has CHA done this type of loan before?
Excuse me. How many times have we done this?
I can get you a more specific number, but it's something that we
offer on 4% transaction on bond transactions
to reduce interest costs.
Awesome. I think it's a good tool to allow CHA to utilize their balance sheet to
help fund these type of projects. To Alderman Conway's point, we need to
figure out ways that we can finance and build more of these projects quickly.
Moving on to the development side of the project, what is the plan for
minority participation, if any, both on the construction side and if
there is any plan or inclusion of minority equity?
Can we talk about what that structure looks like?
Is there a representative from Related Midwest here, or...
Hello, my name is Sarah Wick. I'm a senior vice president with Related
Midwest. So,
the plan is that-
Excuse me. Senior vice president of?
Of development for Related Midwest.
Thank you.
So the plan is that we have both obligations
to the city and CHA for minority and women-owned
business
requirements. So we intend to meet those.
We also hope to exceed those requirements.
Our internal
goal is to get to a 30% MBE and 10%
WBE business engagement.
And that's on the construction side, correct?
Correct.
And when we think about equity on these projects, because the city and CHA are
helping fund a lot of this project, yet we often don't see a ton of minority
participation. Is there any structure or
participation on, as an equity partner or a JV partner, that
minority developers partaking in on this project?
So,
our development partnership is made up of a partnership
that responded to the CHA back in 2010.
We've not admitted new partnerships.
We've actually, quite frankly, only lost members of the JV.
So I think it takes...
We would likely, I would have to
ask CHA to confirm this, but I think we'd have to procure a
new participant in the development partnership.
Okay. Thank you.
Yeah.
Doesn't really answer.
Sorry.
But I appreciate it. That's it from me, Madam Chair.
Thank you, Alderman. Alderman Villegas.
Thank you, Madam Chair.
The slide, is it LR,
that's the,
LR Contractors, I guess, that's the-
That's the general contractor.
And that's Related Midwest, right?
That's correct.
Yeah. And so I know that they have a great record of including
minority and women-owned businesses, and I would suspect since it's a CHA project,
I think in section three as well.
Has there been any consideration for veteran-owned firms?
As well as, the city passed an ordinance,
this body passed an ordinance unanimously around
veteran participation in the affordable housing.
Can we talk a little bit about that, as to what the plan is from
the team to include those two options of veteran
business as well as veteran housing
for the project?
Thank you, Alderman.
From Related Midwest, I-
Hi, my name is Amy Mayer. I'm a vice president with LR Contracting.
Okay.
Representing our contracting division.
We do a lot of outreach, and we do a
lot of work to include anyone in the
project, including veteran-owned businesses that we track as
well. So we
make an effort in that regard.
Madam Chair, does this agreement include the
3% VBE goal that the city passed unanimously
as part of the documents,
as part of the goals that are-
Uh, this-
I know that the 26 and six is available, but does the 3%
VBE included in this?
This is a CHA project. So Ms. Prather,
can you come and answer this?
Can you clarify exactly what-
So yes, ma'am. So the city council
last year passed unanimously
a category for veteran business enterprise, which is
3%. And given that there's city dollars that are being attached to this, I was
wondering if there was consideration for adopting that
3% goal for veteran-owned businesses on this project.
As well as discussing what your strategy is based on the affordable
housing
requirement, where this body once again unanimously passed that
10% of that 20% would be set aside for veterans for the first 30
days,
and marketed to that community exclusively.
So I don't believe at this point. I will need to check back with our compliance
team.
Okay.
But happy to do that in concert with Related on this project, as well
as looking forward to other projects.
We are spending a lot of time in coordination with the city's compliance
departments, and so would like to take a look at this to make
sure that we are conducting the appropriate outreach.
I appreciate that. If you could, and get back through the chair.
Oftentimes when we're talking about homeless populations
or housing, communities that need housing, the veteran community's often brought
up, and so I want to make sure that they're given some special consideration for
this opportunity.
Happy to take a look and get back to the chair.
Thank you. And then also-
Before you go to your also,
Mr. Stern.
What your name is from DPD.
I'm sorry, Jeff.
Do you have an answer to this question because there's TIF dollars in this
deal?
Hi. Jeff Cohen, Deputy Commissioner, DPD.
I do not have an answer for Alderman Villegas.
I'm not as familiar with the DOH contracts and CHA contracts.
No, but you're an expert in TIF funds.
Yes.
Is that a requirement?
So the VBE requirement is not for all RDAs, as
they are subject to capital improvements,
essentially,
approved by city council. Whereas when the contracts are going through the
Department of Procurement Services, they are responsible for the VBE requirements.
Thank you, Madam Chair. And Jeff-
Yes, sir
... I think we've talked about this at DPD, talked about it in our DOH.
We need to amend the ordinance, and look forward to working with you to amend the
ordinance to make sure that the veteran business enterprise
program is tied to the legislation.
The intent of the body was to make sure that veteran businesses had an opportunity
to participate on publicly funded contracts.
Not just on capital, but overall making sure that veteran
businesses have an opportunity to participate on publicly funded contracts.
So look-
Okay. Seems like there's been some conversation on this.
This is very frustrating because this body unanimously passed this.
All right.
The intent was to make sure that that community was participating. So.
Another off-
Yes
... conversation that-
We're going to be talking a lot-
... doesn't apply to this
...
Madam Chair. One more, I just had-
Do you have another question, Alderman Villegas?
Now you've made me lose my
point of thought here. I'll go back. Thank you, Madam Chair.
Thank you.
Alderman Waguespack, congratulations.
Thank you, Chairwoman.
And I'll follow up with Alderman Villegas on that, and Ms.
Prather,
Deputy Prather, on the DBE. I know that's something he had brought
up in a couple other projects that we had.
And
I think answering the question of why this took so long, it has
gone through a lot of different iterations.
And it does go back to 2010. It's something that is right near my
office. It was in the First Ward for a long time.
And I want to thank Related, Bickerdike,
Housing Department, DPD, and especially Anna Booth,
because you're right, Chairwoman,
she makes a outstanding presentation every time, and they just actually get better
and better.
And I think having that information up front, I know we have to follow up on a
couple things here, but
the comprehensive plan that she's laid out here really speaks
to the effort that all of the organizations put into this.
And I know that CHA has had, we've had some hiccups trying to get this moving
forward. It's been a long saga. But,
I would also add that when you look at the plan there,
we do have a senior citizen building and no changes are going to be made to that.
But the seniors were instrumental in helping with design efforts that have
gone through a couple iterations.
And we will be returning many of the residents who were moved
more than a decade ago. So this is very important for people in that community to
be able to come back and live in this area,
and hopefully make it their home again.
We do have a lot of work to do with the other aspects of the
powerhouseTrying to gain some business
opportunity there. But overall, this is a plan.
I know the financing was the hardest part to pull together.
But this will definitely add to, I think, the
stature of the city to
basically come full circle with something that was created in the 1930s,
and see life booming again in this area.
So I ask for the committee's favorable consideration of this item today,
and thank you for taking the time to allow Ms. Booth to do the presentation.
Thank you, Alderman Waguespack.
Motion made by Alderman
Casada, recommending approval of item number four.
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.
Item number five is from the Department of Housing.
It's a substitute ordinance authorizing the issuance
of financial assistance and acquisition of city parcels
located at 201 North Kedzie Avenue,
3209 West Lake Street, and
3201 West Lake Street, to Hub
32 LLC, for the development of the Hub
32 project, located in the 28th Ward.
There is a substitute ordinance which has been prepared and sent
electronically to everyone. Is there a motion to accept the
substitute? So moved by Alderman Taylor.
All those in favor signify by saying "Aye." All
those opposed? In the opinion of the chairs, the ayes have it, and the substitute
ordinance is now before the committee, and will be explained by
Chase Wheeler from the Department of Housing.
Want to acknowledge Alderman Rodriguez,
who has joined us for this finance committee meeting, and will be
counted towards quorum.
Mr. Wheeler.
Thank you.
All right. We'll go ahead and get started.
All right. Starting off with the requested-- Well, yes, as
Chair Dial stated, this is the Hub 32 project
located in East Garfield Park. So starting with the requested actions,
we're requesting that you authorize the execution of a multifamily loan of up to
$10 million.
Hold the mic closer to you.
All right. Also requesting the authorization for execution of an RDA
as well as TIF loan for up to $14.5 million.
And finally, authorization to convey three city-owned lots
to the project.
The development team for Hub 32, so this is led by the Michaels
Organization. Also co-developing with
them are KMW Communities and True Built and Real Estate.
Excuse me for one second. Can we close this door?
Okay, go ahead.
All right. Architectural services have been provided by Studio Dwell,
as well as Brooks + Scarpa.
The general contractors, this is being done via a JV with
Skender and Ashlar Construction.
The lenders on this project are Fifth Third Bank and Sonaire.
And finally, the tax credit syndicator will be Raymond James.
An overview of the project. So this is a mixed-use project.
There will be ground floor retail as well as residential units.
Fifty-one affordable units. The address is 136
North Kedzie Avenue. This is located at the intersection of
Kedzie and Lake, adjacent to the Kedzie Green Line CTA stop.
The total development cost for this project is $40.6 million.
The city funding for this project is the
stated multifamily loan as well as TIF loan.
Other funding sources are 9% tax credits, a ComEd energy
grant, and first mortgage.
Taking a look at the rental unit profile,
there will be a mix of one, two, and three-bedroom units,
ranging from 30% AMI to 80% AMI. As
stated, this is 100% affordable. There are no market rate units.
So rents here will range for a one-bedroom from
$540 to $1,600, two bedrooms
from $638 to just over $1,900.
And for three bedrooms, the band is a little bit smaller.
There are no 30 or 80%, so they are between
$1,300 and $1,600.
Sources and uses. So here on the left, we have the
developer equity. The first mortgage, as mentioned,
$680,000. The TIF funds, it is up to
$14.5 million, currently projected at just over $14 million.
The $10 million multifamily loan.
Tax credit equity of approximately $15.6
million, and the ComEd energy grant of just over
$300,000.
Uses. As stated, the land is being conveyed for $1.
Hard costs are at $32.5 million.
Soft costs, $7.3 million, with reserves of
just over $730,000.
And taking a look at the surrounding neighborhood, so this
is East Garfield Park. It is east of Garfield
Park. As stated, the site is at the intersection of Kedzie
and Lake.
And we can see that on the left, and then on the right is a closer view of the
actual site for the project on Kedzie Avenue.
And here we have the latest rendering of the project.
So this is from Kedzie Avenue facing
west.And
here are some details. This does call for an alley vacation.
This is in accordance, this project originally came through a
DPD RFQ, and
the RFQ did anticipate this alley vacation.
So the alley currently opens to Kedzie Avenue.
That is where the building will be located.
So that will be vacated and a new alley
will be constructed, and that will open at Maypole Avenue.
And this is included in the development
budget and supported by the TIF.
Moving on to the public benefits. So as stated, 100% of the 51
units will be affordable. So these will be between 30% and
80% AMI. This project also supports the Midwest
Redevelopment Project area,
specifically promoting quality infill housing,
as well as ensuring that new designs are attractive and high
quality, and finally, providing transit-oriented developments.
The developers do have a plan to comply with the 26 and six requirements for
MBE/WBE contracting.
And finally, this is expected to provide 300 construction jobs and
11 permanent full-time jobs.
And again, the requested actions,
the authorized execution of a multifamily loan of up to $10 million,
authorization and execution of a redevelopment agreement and TIF
loan of up to $14.5 million, and the conveyance of
three city-owned parcels for $1.
Are there any questions at this time?
No. I asked that.
My apologies.
No problem.
I want to acknowledge that we have letters of support
from the 24th and the 27th Ward, which share
this TIF with the 28th Ward. And
we will start out with Alderman Riley.
We'll ask you, Alderman Irvin, to close. Alderman Riley?
Thank you, Madam Chair. I think one of the earlier slides
in the presentation talks about the distribution of the units,
unit count, size.
So
again, just back of envelope here.
If you were to average this out, what's the average square footage for a unit
in this proposed structure?
Is it slightly less than 800 square feet?
We'd have to do the math.
That would maybe in the ballpark.
Yeah, I think that's about right.
And what's the price per unit?
$796,000 per unit.
So
we're talking about nearly $1,000 per square foot?
Well,
I guess it depends on how you look at the square foot.
When we did look at that, the dollar per square foot is
$569 per square foot.
How does that add up?
Well, it's the gross
building.
I see.
So it's not just within each unit, that it will include the common areas.
I see.
Yes.
Okay. All right. I guess we can agree to disagree on that.
I bring it up only because it's a recurring theme here when we're talking about
affordable projects. The cost to deliver a unit
is astronomical.
And when you look at some of the
older residential buildings in the central business district that are for
sale,
you can purchase one built for a whole lot
less money per square foot.
What is the major contributor to the cost being so high
for projects like these?
Well,
honestly, and understanding it's frustrating.
It's also frustrating for myself,
just having a background in real estate.
Honestly, a part of it is this is where we start talking about the
cost,
here at the end of the process where
the horse is out of the barn, we're trying to close the doors.
Yeah.
So I think it would definitely be helpful to have that
same support from this body earlier in the process.
Okay.
Yeah. Because, yeah, it's tough. And if you go and look at it, as you said, if you
go look at a GC bid book
on a market rate deal and then compare that to a GC bid book on an
affordable deal.
Yeah.
That's my concern.
And I'm not going to take up a lot of the committee's time with this.
But wanted to flag this, because the purpose here is deliver as many affordable
units as we possibly can, because there's such an incredible need.
So seeing these costs per square foot is
frustrating. And so if there is a way for us to get at that
issue earlier in the process, I would love to learn
offline how we can go about doing that.
Because I think we all have the same goal here.
But these costs are hard to defend, especially when you talk to folks who
work in the private sector trying to deliver market rate
units and are doing so at a much lower cost.
Thank you, Madam Chair.
Yeah. Thank you, Alderman.
Just to note that in the last deal we just approved,
that one was above
728,000 per unit.
And that makes me sad too, Madam Chair.
Yes. Okay.
I would like to just add-
Let's look at everything
... if I could just add to those points, Joe Lewis from the Department of
Housing, Deputy Commissioner in the Housing Development Bureau.
It is frustrating to compare some of the costs for
working in subsidized unit development compared to market rate development.
I will note though, in the former space, we are
Working in a regulatory framework that's a bit different than what we have
market rate developers have to work through.
In this particular instance, we are subject to
Build America, Buy America procurement compliance
requirements. These are new requirements that are taking effect
as of last year and going into this year as well for
federally assisted housing projects, where significant
portions of the materials need to be procured in the United States.
Of course, on top of that, we have to ensure that we're
paying Davis-Bacon appropriate wages when there's federal
financing involved. We also have to
contend with the fact that
we are working in a space where we have to adhere to the
different requirements for MBE,
WBE266 and the other
related local requirements.
Additionally, this is a project where it was the
subject of a couple redesigns to try and bring the cost down a
bit. So we're actually looking at something that is a little
more cost-effective than what we had initially been asked to reckon
with. So we are thinking of creative ways that we can
explore waivers, for example, for Build America, Buy America compliance,
when it makes sense to do so.
I
don't want to imply that that's the only cost driver.
It is
one of
many.
However, I do bring that up just to emphasize that this
is a different regulatory
framework that we have to work through here compared to market-rate housing.
Understood. And I guess maybe a longer
conversation for this body is what's the priority.
We can't help everyone at once. And sometimes if we have to put a
premium on delivering affordable housing, perhaps that needs to be the
primary goal,
and maybe some of these other requirements need to be looked at.
But thank you, Madam Chairman.
Thank you, Alderman. Alderman Irvin.
Chairman.
Thank you, Madam Chair,
and to all members of the committee.
I appreciate your support on this particular item.
Find it a little ironic that we spent $250 million and no one talks about
affordability, but we spend $40 million on the West Side, and
the affordability question pops up, and it's a little concerning to me.
But let's move forward. There are concerns on
cost, but let's make that across the board, not just focusing on South
and West Side developments only. So, I will
ask for the committee's support on this.
And again, as we continue to deliver affordable units on the West Side of
Chicago and throughout our city, it's important as we talk about affordability,
100% of the units in this development are affordable in a community that is rapidly
experiencing
gentrification. So, again, appreciate the
support of Alders Scott and
Burnett in this particular endeavor, as well
as the support of the entire council as we continue to try to make Chicago
affordable again. When you look at East Garfield Park, we're seeing
skyrocketing rents. People are paying more on rent in East Garfield than many
people are paying in mortgages, and these numbers are astounding, especially in the
communities that we speak of. So again, I want to thank the department for their
help on this. And also, even though this goes back to
the guy that was the professor, that was our
DPD commissioner at the time. The design on this building
was excellent, even though it took us a while to get here.
I would say the quality and the design of this particular building
in East Garfield Park, and the same thing that we did with the C40
project, is not something that you traditionally see
in lower income communities. But again, we talk about quality,
we talk about sacrifice, and we talk about having the same type of
amenities that we see in Lincoln Park. We want to see those in Garfield Park.
So again, I want to thank everybody for their support on this and look forward to a
favorable consideration from the committee. Thank you.
Thank you, Chairman Irvin. I wanted to
also comment that
this is a transit-oriented project, and a building
of this type really can make a statement
about the resurgence of a community.
So I congratulate you on doing this and also
that these are all affordable units. That's an achievement.
Motion made by Alderman Harris to
approve this matter. All those
in favor signify by saying aye.
Opposed. In the opinion of the chair, the ayes have it, and the substitute
ordinance will be reported out at the next city
council meeting, the due pass recommendation.
Thank you very much, Mr. Wheeler.
Thank you.
And Mr. Lewis.
Item number six from the Department of Planning and Development is a substitute
ordinance authorizing the allocation of tax increment
financing funds for the Workforce Solutions program.
That covers the 1st, 2nd, 3rd, 4th, 5th, 6th,
7th, 8th, 9th, 10th, 11th, 12th, 14th,
15th, 16th, 17th, 18th, 20th,
21st, 22nd, 24th, 25th, 26th,
27th, 28th, 29th, 30th,
31st, 32nd, 33rd, 35th, 36th,
37th, 39th, 40th, 45th, 46th,
47th, 48th, 49th, and 50th Ward.
This is a substitute ordinance, which has been prepared and sent electronically
to everyone. Can I get a motion to accept the substitute?
So moved by Alderman Lee. 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 before the committee and will be
explained by Ligia Evardeas from the
Department of Planning and Development, and Mary O'Connor, the Deputy
Commissioner for Planning and Development.
Good afternoon, Chairman Dahl and members of the Finance Committee.
My name is Mary O'Connor, deputy commissioner for the Small Business Development
Bureau in the Department of Planning and Development.
I'm joined by Ligia Ibarra, the program manager for the Workforce
Solution program.
We are here today to request your approval for an amendment to the Workforce
Solutions ordinance that will expand program funding and allow us to
support more businesses across the city of Chicago.
The Workforce Solution program is an established and proven economic
development tool. It provides reimbursement grants that help
companies offset the cost of training their current employees and
onboarding new hires. Our mission is straightforward:
strengthen Chicago businesses by strengthening Chicago's workforce,
improving performance, productivity,
and
long-term competitiveness. In just the first nine months of our
relaunch, we have seen the kind of demand and impact we'd hoped for.
We have awarded 25 grants totaling 1.87
million. These awards have supported training for
385 workers, including 230
incumbent employees and 155 new hires
receiving on-the-job training. Nine out of these
grantees are MBWBEs,
reflecting the diversity of Chicago's business community.
And our reach already spans all seven planning regions from the far
South to the Northwest Side.
In our last ordinance amendment, we were authorized funding limited to
35 TIF districts, and seven of those have since expired.
With council support today, we will expand coverage to nearly 80
active TIF districts, allowing this program to operate at the scale our
businesses and workforce deserve.
With your support, we can scale this program to help many more businesses
stay competitive and deliver measurable economic impact throughout the city.
We respectfully request your approval of the amendment before you today.
Ligia will now walk through the details associated with the proposed funding
request.
Thank you, Mary.
Good afternoon, Chairwoman Dahl and members on the Finance Committee.
My name is Ligia Ibarra, program manager for the Workforce Solutions program within
the Department of Planning and Development.
Before we begin, I want to just acknowledge that this is a substitute ordinance due
to the fact that we did add three additional TIFs to the original ordinance,
116th and Avenue O, Ewing Avenue, and South Chicago TIFs,
per the request of the alderperson.
This amendment authorizes 28.9 million in Workforce Solutions funding
across 66 TIF districts, spanning 42 wards.
This expansion allows us to move from a limited reach, just 35 districts,
including seven that have since expired, to broad citywide access so that
businesses across most TIF districts can benefit from workforce training,
certifications, and scaling operations with new
hires.
The Workforce Solutions program provides reimbursement grants for businesses to
upskill current employees and provide on-the-job training to new hires.
These funds help businesses adopt new technologies, strengthen internal skills,
and improve retention,
three known areas that are critical to staying competitive.
Since our relaunch nine months ago, we've awarded 25 grants totaling
1.87 million, supporting training for 385
employees, which include 230 incumbent workers and
155 new hires through on-the-job training.
These results demonstrate that businesses are ready, engaged, and eager to invest
in their workforce.
There are four key reasons for this amendment.
First, expanding to additional TIF districts gives the program a true citywide
reach,
strengthening our ability to support businesses and communities that previously
lacked access.
Second, it allows us to support a broader range of businesses, whether it's a
mom-and-pop store that has served its community for decades, a new independent
coffee shop trying to get established, or a manufacturing firm that has supported
generations of local workers. This program meets businesses where they are and
helps them move forward with their training and hiring needs.
Third, having funding ready and available makes the program more responsive and
business-friendly. Employers often need to move quickly.
Having funding across most TIF areas allows us to align with their
timelines and prevent project delays and improve overall service delivery.
And fourth, this expansion increases the program's economic impact
by helping businesses improve productivity, retain workers, and
stabilize neighborhood commercial corridors, ultimately supporting local
employment and encouraging new investment.
The Workforce Solutions program delivers direct and measurable outcomes.
It helps businesses upskill local workers without facing high upfront costs.
It lowers hiring and onboarding risks through on-the-job training wage support,
thus helping support business growth.
It improves business retention, supporting stability and competitiveness in
neighborhood corridors.
It increases local economic activity by enabling companies to expand and
retain talent. And with this increased funding, it helps promote
equitable citywide development, ensuring both high-need and high-growth areas
benefit.
We began alderpersonic outreach and engagement in Q4 2024 to ensure
all impacted alders were fully informed and in support of this resource for their
communities. The amending ordinance was introduced to City Council last month,
leading to today's presentation.
Upon passage, we will roll out funding to all eligible TIF districts and will begin
targeted marketing and business outreach to all newly funded areas.
In closing, the amendment expands the Workforce Solutions program to nearly 80 TIF
districts, allowing it to operate as a true citywide resource.
It builds on the strong momentum we've already established, delivering immediate
and tangible benefits for both businesses and workers.
Thank you for your consideration.
We hope the committee will approve this ordinance so we can continue scaling this
program to meet the needs of Chicago's employers and workforce.
Thank you very much, Ms. Alvarez.
We will start with Vice Chair Conway.
So if a ward is not on this list,
that means that none of the TIFs that touch that
ward are on the list. Is that correct?
If a ward is not on this list, it means for this new funding proposal, that is
correct, that we don't have any TIFs within that ward.
However, we do have the initial
28 of the 35 districts that we had funding for last year
that also may not be reflected on this list.
Okay. I'll have to take a look at that.
I have a ward that touches a lot of TIFs, and my ward's not on the
list, so I'll take a look. Thank you. That's all I have.
Thank you. Alderman Villegas.
Thank you, Madam Chair. Thank you for the presentation, ladies.
You mentioned there was about 20, 25 organizations that are assisting
with this.
To date, we have 25 current active projects.
Was that the question?
Sorry. Are you partnering with 25 organizations?
Is it-
Oh, no. Currently, no. So the way that this program works is that businesses that
are seeking training apply for the program. It's a reimbursement grant.
So to date we have contracted, we have awarded 25 grants.
To companies?
To companies, correct.
I got you. Okay. Could you provide a list of who those companies are?
Definitely.
Yeah.
And then,
doing back of the napkin math, that's about $4,600
per person being trained. That's the investment?
That is correct. On average.
Is that a true investment? Because do DPD employees get paid out of this
TIF as well to provide the services?
Not through this particular funding.
I'm actually not sure of the logistics of our payroll.
But do-
But the point though-
... DPD employees are getting paid through TIF, right? Is that...
I'm not sure.
I don't believe so.
I think that there are administrative costs-
Costs associated with it
... associated with every TIF that goes
to a department. I'm not sure the breakdown between
the housing department and DPD, but it's not coming out of
this bucket.
Okay. Yeah. I ask only because I just want to make
sure that we're getting as much money to those entities to make sure we're training
up these folks for the investment.
It's not being
paid like
a 10% administration fee or any type of...
I want to make sure every dollar is trying to get there.
If you look at your TIF report-
Yeah
... in that report, there's usually a line item
for administrative overhead.
Got you.
And I think if you,
what's the word I'm looking for, add up
all of the TIFs across the city, that administrative overhead,
that money gets split-
Okay
... between various departments.
Thank you for that, Madam Chair. Could
you just provide the list of those companies? I appreciate it. Thank you.
Alderman Lopez.
Thank you, Chairman, and good afternoon, members of the committee.
Good afternoon, ladies. Thank you, and my apologies for
our
spirited game of phone tag.
But I am in support. But I do have a question
as it relates to our use of TIF in neighborhoods,
because one of the questions that I've been getting a lot from my
residents as they continue to see programs like this to
help business
is, when are we going to see the next TIF MIP, the
neighborhood improvement, to help residents within these TIF
districts?
Because I think $28 million to help businesses is great, but I know all of
our colleagues that have TIF,
all of our neighbors who remember when we used to do that,
would love an answer for that. So I'd like to be able to support this and say it's
in the works or whatever your thoughts are on that.
I can answer that too.
I can answer that too, Alderman.
The TIF MIP program is not something that
rolls out automatically.
Mm-hmm.
It has been, I believe, and I'm not sure if it's the
policy of this administration, but previous
administrations going back to-
Mayor Daley
... Daley.
Yeah. Mm-hmm.
You had to make that request to the Department of Planning,
and then they would allocate, tell them what TIF you wanted to focus
on, and they would allocate a certain amount of money.
So I think all you need to do is-
So-
... is make that request.
So I have,
oddly enough, numerous times. But I appreciate,
100% appreciate
your comments, Chairman.
But I'm saying this publicly because I know that
there are TIFs that I share on my southwest side, whether it's with the 20th
Ward, 16th Ward,
other folks-
Mm-hmm
... that I know that our residents would love to do that.
So if the department doesn't have any planned
TIF MIPs in the works, then I'm sure my colleagues would
probably love to do an introduction of our own to
make this happen.
So I guess I'm just waiting to hear if you do have something.
If not, no worries. I'm sure I could figure out how to write one for you.
The department does not have a TIF
MIP-
In the works?
... allocation program like this.
Okay.
You have to make a request through...
I got you.
You got it. All right.
I got you.
Thank you, Chairman.
You're welcome. Alderman Vice Chair Conway.
To go back to my prior question, which clearly wasn't answered correctly, I'm
looking at the list right now. I see the Central West TIF on here, I see Canal
Congress,
I see Roosevelt and Clark. Those are all TIFs that touch the 34th
Ward, yet somehow no
love in here for the 34th Ward on this particular
program.
I'll make sure to get a list of the TIFs that are within your ward and see if we
currently have funding in any of those TIFs.
The way that we came across, we actually wanted to be in every ward.
That was their initial request.
Yeah.
And then when we went through the process to try to get the funding, depending on
other competing priorities, if there was funding available or not,
that list diminished to what is currently presented today.
Okay.
But we can definitely provide a list of what's in your ward, and if there is
definitely interest, we would love... We want to be truly city wide.
So-
Yeah. I see it's taken money out of three TIFs that are in
my ward, and yet my ward is not included in that, and I don't understand why not.
If you give me a quick second.
Yeah.
Just look at the list that I have.
We could take some from your LaSalle
projects.
We-
We do.
Yeah. We actually do have three TIFs in your ward. Thank you, Mary.
And we actually do have a letter of support from your office.
Yeah.
For Canal Congress, 68%, Roosevelt/Clark, 21%,
and Central West, 17%.
Yeah.
We sent a letter of support assuming we'd be included in the program.
You are included.
Little did I realize that somehow the 13th, 19th,
23rd, 34th, and 41st through 44 wards.
Now, for all the rest of those, maybe they don't have a TIF, but the 34th Ward
certainly does.
We have funding set aside for Canal Congress, 500,000,
Roosevelt/Clark, 275,000, and Central
West, 750,000.
Well,
but seemingly noting that we're not part of the ordinance, why is the 34th Ward
being discriminated against in this program, then?
Assuming that-
There may have been an oversight, but you are not being discriminated against.
You are included in this TIF funding request.
Okay. So maybe is there an error on the agenda,
then? Is that what's going on?
It might have been my oversight, sorry.
Hold on, Alderman.
Okay. Yeah.
Don't get your panties in a bunch.
Well, I'm here to represent the 34th Ward, and we're seemingly one of eight
wards that's discriminated.
We're going to take care of it.
All right. Yeah, I know.
Are the wards listed-
I know
... on the ordinance?
No.
The TIF.
No. It's just the TIFs, not the wards. In the actual ordinance language?
Okay. In the actual ordinance language-
Yeah
... Alderman, only the TIFs are
recognized or listed, of which they're
saying that the TIFs that they just told you are included
in the ordinance. You are not listed on the agenda,
so it is an oversight. So when we
vote on this on Wednesday, your TIFs are
included in the ordinance.
Thank you. Yeah. No, we're not all Michigan Avenue hospitality in the 34th
Ward. We do need workforce solutions across as well, and we're happy
to contribute and be included, but just want to make sure that we are.
Thank you very much.
Thank you for your advocacy, Alderman.
Is there a motion to recommend? Oh, I'm sorry.
Alderman Riley, followed by
Taylor. My bad.
Just along the lines of my colleague, Alderman Conway, are
there TIFs in the 42nd Ward included in this as well that is also an oversight?
When we spoke with your office, they were not in support of
the TIFs funding.
So you're not drawing from any TIFs that overlap with the 42nd Ward.
Great. Thank you.
Alderman Taylor.
Thank you, Chairman. Can we get a list of every
businesses in each ward who are actually utilizing the program?
Is that possible?
Yes.
And can you all talk about outreach?
I feel like you all do these amazing programs,
and a lot of businesses either don't know about them or are not connected in the
city in that way. And so can you talk about outreach?
Yes. So we do outreach in the various ways.
We have monthly webinars, that are hosted on the first Tuesday of every month.
The information is online to register.
We share our information via listservs, both EPD as well as
our community partners. We share the flyers with our community
partners as well as our automatic offices. We attend also different events.
For example, the BACP Small Business Expo coming up.
We are in the process of reserving tables for these events and any other
events that come to our attention.
We also do some literal door-knocking.
We go to communities, especially if the TIFs are expiring.
We want to make sure that those businesses have an opportunity to learn about the
program, and we can answer any questions they have.
So do you all work with the chambers and CPD's
Office of Business as well?
Some of the outreach has done through the CPD, like they are part of those
efforts.
What about the chambers?
The chambers are part of our listservs, yes.
Thank you. Thank you, Madam Chair.
And you might consider going on a couple of radio shows
to talk about this program as well.
Thank you for the question, Alderman Taylor.
Is there a motion to recommend approval?
So moved by Alderman Harris, recommending do pass.
All those in favor of the motion 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 meeting. Thank you all.
Thank you.
Item number seven is an ordinance authorizing the
execution of an amended redevelopment agreement with the
Institute of Cultural Affairs to amend the project
financing sources, budget and scope for the
rehabilitation project located at
4750 North Sheridan in the 46th Ward.
We're joined by Jeffrey Cohen, deputy commissioner from
DPD.
Thank you, Chair.
Good afternoon.
Good afternoon, Chair and members of the Committee on Finance.
For the record, my name is Jeffrey Cohen, deputy commissioner with the Department
of Planning and Development's Bureau of Economic Development.
I'm here today to request the approval of an amended redevelopment agreement
between the city and the Institute of Cultural Affairs for the purpose of
authorizing the use of $2 million in TIF funding in order to
support the critical infrastructure upgrades and ground floor build-out
for the Illinois Department of Human Services as a major new anchor tenant at
the ICA Green Rise building.
ICA Green Rise is located at 4750 North Sheridan Road,
which is in the 46th Ward, Uptown Community area, and Lawrence Broadway TIF
district.
Alder Clay is in support, as well as Alders Mena, Hoppenworth,
and Martin, who control the remainder of the TIF district.
The subject property outlined in red is at the southwest corner of the intersection
of Lawrence Avenue and Sheridan Roads.
Two blocks to the west of the property is the rebuilt and recently reopened
Lawrence Red Line station.
Shown here is the eight-story, 166,000 square foot Mutual Insurance
Company building, an icon of the Uptown neighborhood that was designated a City of
Chicago landmark in 2013. It was originally constructed
in 1921 as a four-story building in the classical revival style.
It was then occupied by the Mutual Insurance Company in 1926.
The success of that business, which was eventually renamed the Kemper Insurance
Company,
led to a four-story addition in 1927.
Kemper occupied the building until 1971, when they relocated
offices and donated the building to the Institute of Cultural Affairs, also
known as ICA. In 2015, ICA rebranded the
building as the Green Rise and is one of the largest non-profit social service hubs
in the Midwest.
Here are photos of the ground floor space, which will be built out for IDHS.
ICA, which is owned and operated and occupies the property, is a developer of this
project. For over 54 years, ICA has served as an anchor
institution in Chicago's Uptown neighborhood, operating out of the historic Green
Rise building. The property houses ICA USA offices, a conference
center, social service, and is the largest non-profit service center in the
Midwest, housing 16 non-profits as social service agencies, a
pharmacy, doctor's office, and credit union.
It also houses 40 families, 36 individuals, and three intentional
communities in the high-rise's residential units.
This unique mixture creates a vibrant multi-sector hub reflective of the diversity,
resilience, and needs of the Uptown community.
The primary anchor tenant will be the Illinois Department of Human Services, also
known as IDHS, and will provide streamlined access to integrated
services to the residents of the property and in the Uptown community.
IDHS will occupy approximately 11,000 square feet on the ground floor for
an initial term of five years with a five-year renewal option.
Oops.
The funding request supports the first phase of the Green Rise restoration and
expansion project and includes critical infrastructure upgrades and the ground
floor build-out of the IDHS, which has committed to a long-term lease.
Services to be provided by IDH at this location include developmental disabilities,
early childhood, family and community services, rehabilitation
services, behavioral health and recovery, and clinical administrative
programming.
This work will be done at a total project cost of approximately $4 million,
with $2 million or 48.7% of the budget coming from TIF.
In addition to the TIF, the project will be financed with historic tax credits.
The TIF funds will be provided at 30, 60, and 90% completion
milestones, with the final 10% dispersed at the certificate of the
completion. The ground floor space must remain in operation
throughout the compliance period and will be subject to typical construction
compliance requirements for prevailing wage, MWBE, and city residency.
Overall, DPD is supportive of the ICA Green Rise project and believes it
represents an investment in our city's shared historic legacy, as well as a
long-standing hub of social equity in the Uptown neighborhood.
The project will upgrade building systems and facilitate the build-out and
re-tenanting of 11,000 square feet of ground floor space for
IDHS after the previous loss of Heartland Health as their anchor
tenant. The acquisition of this new tenant will improve the financial condition of
ICA and put it in a better footing to secure financing for future
phases of the Green Rise restoration and expansion project.
The building is now over 100 years old, and we believe that the use of TIF will
ensure that it remains a community asset for the next 100
years. For these reasons, DPD is recommending the use of TIF
for this project. I'd like to thank the committee for your favorable consideration
and this request, and I'm happy to answer any questions you may have.
I'm also joined today by Leslie Showers, the executive director for ICA.
Thank you very much,
Jeff.
Seeing no questions, I do know that
Jesse Orr from the 46th Ward is here to speak on behalf of
Alderman Clay.
Thank you, everyone. I'm just here to reiterate Alderman
Clay's strong and enthusiastic support for this project.
The ICA is both a beautiful building
and a crucial cultural and service-providing institution within the
46th Ward.
Not only does it provide services on its own accord, but it's home to more than
a dozen important service providers
that help out a number of neighbors in a variety of different
ways. We couldn't be more enthusiastic about seeing this building get the
investment that it needs to enable IDHS to come and provide services
in the 46th Ward. Thank you.
Thank you, Mr. Orr. There being no
questions before the...
Excuse me, Chairman Ervin.
Thank you, Madam Chair. I just wanted to mention, ICA is such a great
organization. I actually did audit work for them back in the '90s, and I'm glad
they continue to be strong in the Uptown community on the North Side.
So again, fully support this project and the endeavors of happening
with the ICA. Actually, they're from the West Side.
They're from the Fifth City project on the West Side, and there's a
connection back with Fifth City and the ICA, and they continue to
be a prosperous up North and Uptown. Thank you.
Thank you very much, Chairman. ICA goes back a long way.
Is Ms. Showers here?
Leslie Showers?
Okay. So I'm just going to acknowledge...
Oh, is Jim Troxell still...
He's still on the board.
Okay. Would you give him my regards?
We go back
to the 19 mm. All
right. So a motion made by Alderman Knudson recommending do
pass. All those in favor signify by saying aye. Aye.
Opposed, in the opinion of the chair, the ayes have it and the do pass the
recommendation will be reported out at the next meeting.
Thank you, Jeff.
Item number eight is a direct introduction.
It's a resolution urging the General Assembly and the
Governor to enact House Bill 5175
and Senate Bill 3630, allowing for the
taxation of additional tobacco products by certain
Illinois municipalities to reduce tobacco use
rates within the city. This is a direct introduction and a
joint introduction with Mayor Brandon Johnson and Alderman
Ray Lopez.
The Committee on Finance, various departments, and Alderman Lopez
met in response to the ordinance Alderman Lopez
introduced establishing a tobacco mitigation fund.
The resolution before us is a result of that meeting, and I
ask Alderman Lopez to address the committee.
Alderman Lopez.
Thank you, Chairman, and again, good afternoon members of the committee.
Thank you for the opportunity to speak on behalf of this
resolution, which the mayor and I are happy to
introduce to the committee today.
As stated, in response to a previous ordinance that was introduced to create a
tobacco mitigation fund to raise
taxes on tobacco products for the purposes of cessation education and other
supportive programs through the Department of Public Health.
It was learned that, unfortunately,
municipalities like the City of Chicago have not been able to
tax anything beyond cigarettes since
July 1st, 1993.
One year after I left grade school.
Currently, there are two bills in the general assembly that seek to correct
this home rule preemption
by striking the language that prevents us from taxing these
tobacco-related products and taxing beyond just
cigarettes.
This resolution speaks to those items
and has
joined similar resolutions once this is passed by other home rule
municipalities like the town of Cicero and others that are trying to do the exact
same thing that we are doing. This will help strengthen our lobbying hand
in Springfield and shows a wonderful
collaboration between all of us here, the
departments, the mayor's office, in the hopes of increasing public health
and raising awareness for smoking cessation in the City of Chicago.
I
know I've shared this with the American Lung Association, which was
ecstatic to see our efforts on this.
Spoke with the Commissioner of Public Health
regarding this and invited her to join us as and a lot of the data
that she shares on her portal shows the need for us to take some serious
action in this regard.
And I'm happy to answer any questions people may have, and also want to give
a shout-out to Mark, who many of you know, who was
the creator of the Tobacco Mitigation Fund and
helped lead this effort together.
Thank you, Alderman Lopez.
Seeing no questions for you.
Then move do pass.
Alderman Lopez recommends do pass.
Although-
I do have one question, Madam Chair.
Ah. I'm sorry, Chairman Ervin. Maybe putting that
yellow hand up. I don't see that all the time. Go ahead.
No, no problem. I understand. Just two things.
Number one,
we have increased taxes on
tobacco. And what
I see, and I don't know what others see, I see on the west side of Chicago is
that we have generated a significant black market
in tobacco products in our city.
To the extent that if we could get a truckload of
cigarettes from Kentucky into Chicago, you probably could retire
by selling them at a below market rate.
I just want to caution us with the increase in tax.
I understand the Public Health Association, I understand the risk and around it and
trying to generate the level of reduced
smoking in our communities. But we also need to understand that there's
another side of that conversation that creates a
black market that in some
ways functions very similar to a narcotics-related market.
And there are disputes over territories.
There are
similar factions and functions that operate in that regard, even though people
think it's harmless because they're just cigarettes.
The detriment that it does produce in some communities is something I think we
need to be cognizant ofI do support
public health initiatives related to that.
I hope that if we are given that authority, that we be judicious in how
we would look at taxing additional tobacco products,
understanding that we may be creating something more than what we're
solving for, especially in communities of color,
communities around
this issue of tobacco. So, I am glad to see that the alderman in the 15th
Ward and the mayor cooperating on something, so we're going to write this down as a
day in history to remember.
But be that as it may, I appreciate the conversation, but I think
if we get that authority, that we really need to be
cautious with that. But I do support the
resolution, but I just wanted to put that comment on the record.
Thank you, Madam Chair.
Thank you, Chairman Ervin. And to
Alderman Lopez, would you describe the
kinds of additional
tobacco products that
you anticipate this action-
Thank you. Yes. And,
not to put our budget chairman on the spot, but if he'd like to make this a
trifecta of all three of us working together, there's more than enough room on
the co-sponsorship page for him as well to join us.
You can send it over, Ray. It's fine.
Right now, we are only allowed to tax cigarettes.
We can't tax anything that
basically didn't exist or that has come into existence since
1993. So when you think of some of the electronic cigarettes, when you
think of some of the tobacco products that you put in your mouth,
like the JUUL and the Zims and all those things,
that's what we're missing out on. And that's what this would allow us the authority
to tax. And to our colleague from the west side's point, yes, we
don't want to create underground markets, but we also know that we are missing out
as a municipality on a significant amount of tax revenue on
products that are currently available in use, sold in the city of Chicago legally,
that we simply have never pushed to activate our ability
to provide any kind of taxation on.
And this resolution and eventual passage in Springfield will allow us the
opportunity to do that.
All right, so you are renewing your motion.
Yes. And with that, I renew my-
Yes
... motion for due pass.
Madam Chair?
Alderman Ervin, mic check.
Yes.
Let me just say this.
If we wanted to raise more money from tobacco,
all we need to do is lower the tax rate.
And all of those folks that are going to Indiana, to the suburbs to buy
cigarettes, they'll buy them in Chicago, right?
So, this tax is
not
elastic, and that's why we're seeing people move.
And when people do that, they not only go buy their cigarettes, they buy gas, they
buy groceries. So, there's a larger economic argument that can be made around
this particular issue.
And I hope that in this conversation that we explore that, because
while the tax was increased, and I think this was under the Emanuel administration,
to really drive out smoking,
it had a definite inverse effect on revenue, and it caused our
tobacco-related revenue to take a serious nosedive.
So,
we can look at both of those items, and maybe this should be a conversation that we
have, around both of those issues.
But I do think that the increased taxes are not
giving us the revenue. But again, if we take a public health approach to this,
understandably. But if we're looking for revenue, actually decreasing the taxes
would help us generate more revenue.
Thank you, Chairman.
All those in favor of the motion as recommended, say aye.
Aye.
Opposed? In the opinion of the chair, the ayes have it, and the due pass
recommendation will be reported out at the next meeting.
Our last item is one proposed order authorizing charitable
solicitation on the public way permit
for Children International. It was a direct
introduction, and Children International is asking for a
permit that would be citywide from April 20th,
2026 to December 31st, 2026.
If there are no objections, this permit is approved and will be placed on file
with the clerk. And there being no more business before the committee,
can I get a motion to adjourn?
So moved by Alderman-
So moved
... Lopez. All those in favor, signify by saying aye.
Aye.
Opposed? In the opinion of the chair, the ayes have it, and the Finance
Committee meeting has come to an end.
Thank you, and have a great afternoon, everyone.