Some Skepticism, Lots of Support for Funding Red Line Work With Transit TIF

The proposed transit TIF district would run a half mile in either direction from the Red Line between Division and Devon. Image: CTA

At a public meeting Tuesday night, Department of Planning and Development and Chicago Transit Authority officials outlined plans for a new transit TIF district along the North Side Mainline ‘L’, which carries the Red and Purple lines. The proposed TIF (tax-increment finance district) would generate funds to help pay for the Red-Purple Modernization project.

At the meeting, representatives explained how transit TIFs work compared to traditional ones. The former are a brand-new funding tool that creates a dedicated revenue stream for public transportation projects in Chicago. Earlier this summer the Illinois legislature passed a bill legalizing the funding mechanism, only within the city limits.

The proposed North Side transit TIF would extend from Division Street to Devon Street, within a half-mile east and west of the Main Line, and it would last for 35 years. The TIF district bankroll Phase I of the two-phase modernization project, which includes the Red-Purple Bypass (aka the Belmont Flyover) and the reconstruction of the Lawrence, Argyle, Berwyn, and Bryn Mawr Red Line stations. This will involve rebuilding the tracks and track structures, widening the platforms, and modernizing the station houses, including making them wheelchair accessible. Phase II would include other track improvements and station projects.

The transit TIF would be used to generate revenue to pay back a federal loan for the infrastructure. Since the improved transit service will raise local property values, which means more property tax revenue, the TIF allows some that transit-generated income to be capture and used for the loan payments.

Traditional TIFs, which also capture revenue from property tax increases for improvements within the TIF district, have been widely criticized for diverting tax revenue from the Chicago Public Schools. However, the transit TIF law requires that the proportion of tax revenue currently given to the CPS remains unchanged. After the school funding is allocated, 80 percent of the remaining revenue goes to the transit project and 20 percent to other taxing bodies.

Even after the officials discussed how the North Side transit TIF would function, there was still some confusion from attendees. More than once residents asked if property tax revenue would be diverted from schools, and whether funds from this TIF would be used for projects like the reconstruction of the Wilson Red/Purple Line station or the Clark/Division Red Line stop, which aren’t included in the RPM project.

43rd Ward Alderman Michelle Smith spoke briefly against the proposed transit TIF to loud applause from the audience. She argued that the proposal, which will be going before City Council this fall, was a rushed mechanism to pay for the project. She added ominously that this would be the first-ever TIF district in the ward.

Rendering of the platform of the new wheelchair-accessible Bryn Mawr station. Image: CTA

Some residents, especially those who who live south of Belmont in the proposed TIF district, was that while their property taxes would be going into the TIF, they wouldn’t be getting infrastructure improvements near their homes. CTA chief planning officer Carole Morey responded that the improved travel times and rider experience from the RPM project would benefit the entire Red Line corridor from Howard to 95th.

According to the CTA, the Phase I work, including improved signaling, track infrastructure, and the Red-Purple Bypass, which would eliminate traffic jams where the northbound Brown Line currently crosses the Red and Purple tracks just north of Belmont, would allow the agency to run 15 more trains an hour between Belmont and Fullerton on all three lines.

But many central Lakeview residents spoke out against the flyover at the meeting because it will require the acquisition and demolition of 16 neighborhood buildings.

For the most part, however, attendees were generally supportive of the RPM project and the proposed TIF.

Several people did express about what they said was a lack of details about how the transit TIF would function. Others floated constructive ideas to ensure the transit TIF works well, including the addition of a sunset clause in case the funds needed for the project are generated before the TIF expires. An alternative proposal was to use excess funds from the TIF for other Red Line projects south of Belmont, such as making the North/Clybourn station wheelchair accessible.

The biggest proponents of the transit TIF were people who are disabled and representatives of organizations that represent them, who were enthusiastic about the plans for elevators to the Lawrence, Argyle, Berwyn, and Bryn Mawr stops. Several speakers discussed how difficult it can be for Chicagoans with disabilities to get around on transit since many stations are not yet wheelchair accessible.

It was heartening to see the level of support shown for this project, especially when one considers the positive ramifications it will have for the entire Red Line corridor. However, it’s also clear that the CTA and planning department have their work cut out for them in selling the transit TIF to a wary public. But, even though the traditional TIF program has been arguably problematic, the transit TIF represents a significant improvement over the old model.

  • Chicagoan

    What Red Line stations are in Alderman Smith’s ward, Fullerton and North/Clybourn? Possibly Clark/Division with some gerrymandering. I’m just trying to think of her motivation for speaking out against the project and if her ward won’t experience much infrastructure work, I’d guess that’s it.

  • Fred

    I read elsewhere that that is exactly the case. Her constituents will be paying the tif but stations in her ward will not be getting any of the money.

  • Anne A

    But many of them could benefit from improved train service.

  • what_eva

    I feel like it’s more of a Lincoln Park “they’re trying to make us pay for it because we’re rich and Uptown/Edgewater/Rogers Park isn’t” attitude, which is completely wrong because of how TIFs work. The average person has no idea how TIFs work, so they suddenly think that either it’s going to raise their taxes or take money from their existing taxes, neither of which is true.

    Because the property values in Lincoln Park (and Lakeview) are already very high, they’re not likely to go up very much over the life of the TIF.

    The further north neighborhoods which will get the larger benefit of faster trains and nicer stations will then see larger increases in property values and be contributing much more to the TIF.

  • FlamingoFresh

    Shouldn’t anyone who uses the red or brown or purple line all be part of the TIF zone. Why does it stop at division instead of extending all the way south? Also people say just because there’s a TIF doesn’t mean taxes will increase. How will the TIF be funded if taxes don’t increase?

  • Palmiro

    There is no getting around the fact that the Transit TIF will, in the near and distant future, siphon off revenues from the city’s general services. To be exact, 37% of all property tax revenues generated by increases in our property taxes will go towards funding (for perhaps as long as 35 years) the Red-Purple Modernization project.* That would amount to a sum roughly equal to 10 years worth of funding for our libraries, or 15 years worth of our Public Health spending, or 2 years of Streets and San., etc., etc. Unless you believe that our city services will not require an increase in their funding over the course of the next 35 years, then there’s no escaping the conclusion that those services will experience a shortfall in their revenues because of the monies siphoned off to the Transit TIF. And that shortfall can only be funded with higher taxes, cuts in services, or increases in bond-generated indebtedness.
    *37% = 100% – 54% (CPS) = 46% x .80 (Transit TIF) = 37%

    We do not oppose many of the projects included in the RPM, such as full ADA access, station renovation, Red-Line extension and rail improvements. What we oppose is the crown jewel (for the planners) in the project: The Belmont Flyover. It is the kind of classic urban renewal that runs roughshod over a neighborhood and which, ultimately, will have little payoff for the city. The demolition of 15 buildings will make a gash in the heart of Central Lakeview and create a no-man’s desert of 2 blocks. And it will likely be remembered in the same category as the great Chicago parking meter fiasco.

    The payoff, according to the CTA, is a shorter commute time (74 seconds per passenger) and more trains put through the Belmont/Clark junction during the rush hour (from every 3.5 minutes to less than every 2 minutes). But there is no chance the Brown and Purple lines could possibly push through that many extra trains because of the inevitable bottleneck at the Loop (sharing rail lines and junctions with the Green, Orange and Pink lines).

    And as for the Red Line, the CTA’s “supporting data” is seriously flawed with figures that greatly inflate the rate of growth in ridership: 1. by choosing the year 2000 as the beginning of their “trend line” in their “High Growth” scenario rather than in 2011 (9% vs. 3.4%) or, for their “Low Growth” scenario, in 2008 rather than in 2011 (3.2% vs. 1.8%); 2. or out and out misrepresentation of data (check out the contradiction between the entry on Table 3 of Appendix B of the EA, nb Red Line, 2014 (138,028) vs. the CTA’s own data point in their Annual Ridership Report for 2014 (127,239); 3. or their absurdist concoction of a datum: “636,000” hours saved annually for passengers, as if CTA riders were a lump sum–what matters is simply the 1 minute and 14 seconds per diem per rush hour individual that that individual will now dispose of as their added “leisure time”.

    In any case, you would have to believe seriously in the Tooth Fairy to believe that the CTA will be able to push through a Red Line train every minute and 46 seconds during the AM rush hour–just think of the delay associated with on-loading passengers, for example.

  • Palmiro

    Alderman Smith, in her small-minded way, happens to be right, but only very indirectly. A TIF does not make you pay more property tax than you would otherwise. It’s used to siphon off money from general revenues (libraries, fire, police, public health, streets and san., etc., etc.). In this case, what gets siphoned off is 37% of the increase in the property tax you will pay in the future, based on presumed increases in the valuation of the property you own.
    And so Alderman Smith is right insofar as, for example, a Lincoln Park library is liable to get 37% less funding to cover the increased future cost of running that library, etc., etc. But it’s not just true for a LP library, but for all of the city’s libraries, etc., etc.

  • neroden

    You are wrong. And the Belmont Flyover is the reason you are wrong. Because it’s the only thing which allows *more trains* which allows more people to get to different parts of the city more efficiently which allows more economic activity, which means the city has a larger tax base and actually gets richer, and so on. Allowing for more public transportation will actually generate more economic activity, meaning that tax revenues will actually be higher than they would have been if you didn’t support it. If you don’t spend it on the Flyover, those taxes never exist. They’re *created* by building the Flyover.

    If you don’t build the Flyover, those taxes are being stolen from general revenues in the future, stolen from other services, because they’re never going to exist, because the property values will never go up, because the economic conditions will not improve, because the area will be choked by the inability to take the train…

    Do you ever go to another part of the city?

    You need the Belmont Flyover. Campaign to make it minimally intrusive — don’t demolish entire buildings, just chop their back ends off, for instance. This can be done. But the flyover’s been needed very badly for a very long time.

    You’re selectively and dishonestly challenging perfectly accurate data because you don’t like the Flyover. I get it. Get over it. Campaign to make it better (they don’t have to demolish the 16 buildings entirely, they can “hacksaw” the back ends and keep the frontage, it’s been done before).

  • ChicagoCyclist

    Does the scope of Phase 1 of the RPModernization Project include reconstruction of all stations (from Belmont to Howard) or does the scope consist only of 1) the Belmont Flyover and 2) the reconstruction of the Lawrence, Argyle, Berwyn, and Bryn Mawr Red Line stations? What about all the other stations? What will Phase 2 consist of? Is there a Phase 3, etc.?