CHICAGO—Fresh off the City Council passing her $11.6-billion 2020 city budget, Chicago Mayor Lori E. Lightfoot has proposed to terminate four tax incremental financing districts by the end of this year.

Three of the proposed TIF district terminations are due to the lack of substantial redevelopment activity.

The mayor introduced the proposals to the City Council last week that would terminate the Pershing/King TIF district, the Harlem Industrial TIF district, the Irving Park/Elston TIF district and the South Works Industrial TIF district on Dec. 31 2019.

The Pershing/King TIF district in Grand Boulevard would be terminated 12 years before its planned expiration date, having achieved its primary objective of supporting the construction and rehabilitation of affordable housing within its boundaries. The district's TIF-funded improvements included the construction and rehabilitation of more than 550 housing units at the Bronzeville Family Apartments, Bronzeville Senior Apartments and the Paul G. Stewart Apartments.

The 26-acre district was established in 2007. Upon its termination, the district's $1.6 million in unallocated increment would be distributed to the various tax-collecting jurisdictions in Chicago. The city's share is estimated at $330,000.

The Harlem Industrial TIF district in Clearing would be terminated 12 years before its planned expiration date due to what the mayor terms is a lack of substantial redevelopment activity. Designated in 2007 to promote investment within 151 acres of primarily industrial land, the district provided approximately $525,000 in grants for 10 building rehabilitation projects. With a zero financial balance, the termination of the district would not involve the distribution of any increment.

The Irving Park/Elston TIF district in Irving Park would be terminated 16 years before its planned expiration date also due to lack of substantial redevelopment activity. Designated in 2009 to promote investment within 66 acres of primarily commercial land, the district provided approximately $230,000 for a half-dozen building rehabilitation projects. With a zero financial balance, the termination of the district would not involve the distribution of any increment.

The South Works Industrial TIF district in South Chicago would be terminated four years before its planned expiration date due to lack of redevelopment activity, according to the mayor's proposal.

The 240-acre district was established in 1999 to foster the redevelopment of portion of the USX South Works steel mill site, which remains to be developed. With a zero balance, the district's termination would not involve the distribution of any increment.

A TIF district is a defined geographic area in which new property tax growth is allocated over a 23-year period to help fund local improvement projects. With the proposed terminations, Chicago would have 136 active TIF districts on Jan. 1, 2020.

Last week, the City Council approved the $11.6-billion 2020 Chicago budget that closed a $838-million shortfall. To close the gap, the city eliminated $1.4 billion in lines of credit for short-term borrowing resulting in a reduction of $22 million in borrowing costs and will refinance more than $1 billion in debt, which is expected to generate $210 million in saving. Other cost saving measures include an overall of the $100-million workers' compensation program and improved accounts receivable collection enforcement effort, which is expected to generate up to $25 million in uncollected payments and tax remittance.

These and other government efficiencies including zero-based budgeting, departmental consolidations and process mergers, personnel vacancy reductions, recycling and energy efficiencies and property management and equipment savings, will result in more than $537 million in structural efficiencies and reductions.

In addition to the budgetary reforms and savings identified within, the 2020 budget includes $353 million in new revenues to support city operations.

Instant Insights /

Chicago Mayor Calls for Early Termination of Four TIF Districts

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