Committee on Finance meeting, April 11, 2024
- When: Thu, Apr 11, 2024, 10:00 AM (Chicago time)
- Where: City Council Chamber, 2nd Floor, City Hall, 121 North LaSalle Street - Chicago, IL 60602
- Status: Scheduled & Published
- Committee: Committee on Finance
- Video: https://vimeo.com/933005827
- Transcript: full text (39,986 words, official captions)
Meeting notes
AI-written from the transcript. Speakers are inferred from cues in the recording, so treat names as estimates and check the video at the linked time.
The Committee on Finance held its second subject matter hearing on a proposed $1.25 billion General Obligation and/or Sales Tax Securitization Corporation bond program for housing and economic development, and the chair stated that no votes would be taken. Department of Housing staff presented a substitute ordinance adding published project selection criteria, City Council approval for projects of $5 million or more, quarterly reporting and annual updates to the bond financial model. Representatives of the Chicago Community Loan Fund, the Metropolitan Planning Council, the Civic Federation and the Council Office of Financial Analysis testified in support, with the Civic Federation and the Council Office of Financial Analysis also raising concerns about planning, reassessments and the $5 million threshold. Members asked about equity for South and West Side communities, the effect of expiring TIF districts on the Park District and CPS, the size of the bond, the $5 million approval threshold, reporting, community engagement and developer accountability. The hearing ended with the chair committing to obtain answers to outstanding questions, and the committee adjourned.
Topics: Housing and economic development bonds, Tax increment financing (TIF), Substitute ordinance, Council approval threshold, Reporting and transparency, Equity in South and West Side investment, Park District and CPS revenue, Community engagement, Public comment
Agenda items discussed
- 25:30 Public comment: discussed
- 22:18 Subject matter hearing on issuance of General Obligation and/or Sales Tax Securitization Corporation bonds for housing and economic development programs (substitute ordinance): discussed
Alderpersons who spoke
- Pat Dowell (chair): Told a public commenter that the Department of Housing does not handle homelessness and offered to forward his service request numbers to the Department of Family and Support Services. (29:09); Explained that this was the second subject matter hearing on the bond proposal and that a substitute ordinance had been prepared after feedback from the March 22 hearing. (35:57); Responded that issuing the bonds over a five-year period allows the city to assess how fast or slow to proceed rather than borrowing the full amount at once. (1:34:48)
- Jeanette B. Taylor (alderperson): Asked how the bond program would differ from TIF, which she said had moved money away from communities that needed it, and how underserved communities would be assured of funding. (1:03:06); Asked what in the ordinance ensures the South and West Sides receive investment, citing past use of TIF funds downtown. (1:05:13); Asked for a list of TIF districts that will expire because of the bond program. (1:09:33)
- Matthew J. Martin (alderperson): Asked what would happen to development if the Council did not approve the bond proposal. (1:16:27); Asked staff to summarize the substitute's transparency changes, including annual model updates, given concerns about property reassessments. (1:18:48)
- William Conway (alderperson): Asked whether any real estate asset class has been hurt more than others coming out of COVID, as it relates to TIF revenue estimates. (1:23:25); Raised concern that the largest TIFs expected to repay the bonds are dominated by commercial office buildings whose values may fall, while the model assumes steady assessments. (1:26:18); Said the financial model shows about a 10 percent drop in incremental property tax revenue over five years and questioned the description of a TIF cliff. (1:28:24)
- Daniel La Spata (alderperson): Asked the typical repayment horizon for general obligation or STSC bonds and noted that roughly 30-year repayment is typical of bond issuance. (1:35:18)
- Gilbert Villegas (alderperson): Asked for a breakdown of how the $1.25 billion would be allocated by line item. (1:36:48); Asked why $5 million was chosen as the threshold for Council approval. (1:37:39); Asked that U.S. Department of Labor apprenticeship requirements apply to projects above the $5 million threshold. (1:39:09)
- David H. Moore (alderperson): Asked whether the bond would fund mostly existing projects and how much room there is for new projects. (1:43:57); Asked where the project selection criteria are spelled out in the ordinance. (1:46:33); Said the selection criteria should be codified in the ordinance rather than only posted publicly. (1:47:45)
- Nicole T. Lee (alderperson): Asked about the long-term impact on Park District and CPS capital projects that have relied on TIF funding. (1:54:48); Said the Park District appears likely to be most affected while CPS receives a larger share of returned revenue. (1:58:24); Asked which eight TIF districts the financial model assumes will be extended and how they were chosen. (2:01:39)
- Andre Vasquez Jr. (alderperson): Acknowledged changes in the substitute that addressed his earlier concerns and asked what reporting to the Council would look like. (2:16:09); Asked that reporting compare projected outcomes with actual outcomes for funded projects. (2:20:30); Raised concern that city portals are not updated regularly and asked that the technology department and alderpersons be involved in developing dashboards. (2:25:03)
- Byron Sigcho-López (alderperson): Thanked the chair for a second hearing and said prior administrations gave large sums to developers without discussion. (2:31:21); Cited a ward referendum on TIF and asked how small homeowners and small businesses can more easily access funds. (2:32:12); Asked about new initiatives such as co-ops and trusts to preserve home ownership and reduce application burdens. (2:36:36)
- Raymond A. Lopez (alderperson): Thanked the administration for removing some questioned language but objected to remaining language in section C ceding Council authority to the mayor. (2:41:48); Pointed out that program maximums add up to $1.255 billion while the ordinance caps borrowing at $1.25 billion. (2:42:42); Asked why the $5 million threshold was chosen, noting TIF requests usually come to the committee at lower amounts. (2:45:06)
- Emma Mitts (alderperson): Asked whether projects would be selected through RFPs or community engagement. (3:05:18); Requested a list of community areas not covered by TIF districts, citing a school without an elevator that CPS said was not in a TIF. (3:26:34); Said she was concerned about transparency and did not see the community engagement component of the program. (3:28:54)
- Samantha Nugent (alderperson): Said she was not satisfied with explanations of the $5 million threshold and that none of her ward's TIF projects in five years exceeded $5 million. (3:07:09); Asked whether quarterly reports would include projects under $5 million. (3:08:06)
- Brendan Reilly (alderperson): Asked whether there would be any limits on how CPS spends revenue returned from expiring TIFs. (3:18:27); Asked whether sister agencies would continue seeking TIF infrastructure money after receiving their share of returned increment. (3:19:24); Asked the expected average award size under the program. (3:20:12)
- Leni Manaa-Hoppenworth (alderperson): Said the equity part of the program is most important and asked to be included in conversations about showing return on investment to constituents. (3:33:03); Echoed calls for engagement with the AAPI community and other organizations across the city. (3:33:24); Asked the Civic Federation president to clarify his concerns about the lack of comprehensive planning. (3:33:57)
- Jason C. Ervin (alderperson): Asked whether analysis had been done on increased revenue generated by bond-funded projects, including property and sales tax. (3:43:54)
Exchanges between members
- 1:16:27 Martin said he was following up on Taylor's line of questioning.
- 1:34:48 Dowell responded to Conway that the five-year issuance allows the city to control the pace of borrowing.
- 1:40:18 Dowell told Villegas the apprenticeship request may belong in project selection rather than the bond ordinance.
- 1:43:39 Moore thanked the chair for calling the subject matter hearings.
- 1:54:24 Lee thanked the chair for organizing the second hearing.
- 2:08:00 Dowell followed Lee's remarks by asking the planning commissioner's staff to meet with representatives of Lee's community.
- 2:27:57 Dowell answered Vasquez that bond deals come before the Finance Committee for approval.
- 2:31:21 Sigcho-López thanked the chair for holding a second subject matter hearing.
- 2:54:55 Lopez said he was building on Moore's point about lack of investment in communities.
- 2:56:48 Dowell told Lopez the commissioner would provide applicant and award data by ward.
- 2:57:18 Lopez replied that he was pointing out facts rather than assigning blame.
- 3:06:40 Dowell asked Mitts to allow Nugent to ask her question first.
- 3:07:00 Nugent thanked Reilly for letting her go ahead of him.
- 3:21:57 Reilly said he agreed with Nugent on re-examining the $5 million threshold.
- 3:28:03 Mitts referred to Reilly's point about money returning to CPS from expiring TIFs.
- 3:32:01 Dowell said she agreed with Mitts on community engagement.
- 3:33:24 Manaa-Hoppenworth echoed Lee's questions about engagement with AAPI organizations.
- 3:37:18 Manaa-Hoppenworth echoed Nugent's point about effects on other departments.