Millennium Park is costing you a fortune.

Per the Neighborhood Capital Budget Group



Funding Millennium Park
The Latest Dips into TIF Funds for Millennium Park Cause for Concern

Although it started out as a $ 150 million project to be opened by 2000, the current public budget of Millennium Park is $ 370 million and its completion date is scheduled to be December, 2003. This does not include the millions that have come in from corporate and private donations to fund selected features in the Park.

Neighborhood Capital Budget Group (NCBG) is concerned that diverting Central Loop TIF funds to Millennium Park seriously reduces the potential amount of surplus money that will be in the fund when it expires in 2007. After taking $ 35 million from the Central Loop TIF fund in May, 2000, the City of Chicago is now dipping even further into what is now a dwindling redevelopment fund. Some $ 95 million from the Central Loop TIF fund has been allocated for Millennium Park, according to the latest Capital Improvement Plan of the City, which covers the years 2002-2006.*

When a TIF expires, the City is obligated to disperse the surplus to the taxing bodies such as Chicago Public Schools, the Chicago Park District, and Cook County, whose property tax revenues have been frozen during the life of the TIF. This surplus could mean a great deal to Chicago and its neighborhood schools and parks, not to mention potentially reduced property taxes. It is difficult to see it depleted for a project like Millennium Park, which is so downtown-oriented. The irony here is that the law allowing the use of TIF funds for non-TIF projects across rights of way was partly intended to help overburdened schools near TIFs where additional population was growing.

With Millennium Park just across Michigan Avenue from the Central Loop TIF eastern boundary, the fund grab is legal, but is it wise and is it fair to Chicago and its residents?

The Central Loop TIF fund currently has a $ 184 million balance (according to the Chicago recently released TIF Annual Report for 2001). This is down from the $ 238 million in the fund in 2000. Estimates of future tax increment, to be deposited in the fund from now until 2007, range from to million a year, depending on assessed values of properties. These funds are to be used to leverage development within the TIF district, including the City plan to buy back Block 37 property from developers and begin the development process on the block again.

City Hall must be open and clear about capital funding programs and should create procedural and policy reforms to head off future cost overruns. Particularly for projects like Millennium Park, which are targeted toward Chicago and its tourism industry, the City must seriously consider expanding its funding resources to include use of McCormick Place and Exposition Authority resources.

The Mayor and his Capital Improvement Advisory Council should take a close look at such overruns, especially ones as dire as Millennium Park.

* NOTE: In a further drain on Central Loop TIF resources, in early May, 2002, the Chicago City Council approved a $ 160 million general obligation bond issue that would be retired with property taxes derived from the Central Loop TIF after it expires. If the City issues this bond, the benefit of the Central Loop TIF growth in property value and hence tax revenue -- will be tied up and unavailable to schools, parks, and other taxing bodies, which will have waited 23 years to get the TIF windfall. The bond proceeds may indeed be used for legitimate capital expenditures, but given the public limited impact on this and other TIF spending and financing decisions, how the City will actually use these funds is unclear. As the Chicago Tribune pointed out in a June 14, 2002 editorial, the ordinance is vague enough to allow spending some of the money on routine, everday expenses and on contributions to the city pension

Please visit their website at:
http://www.ncbg.org/press/park_update.htm