Chicagoania

Chicago “TIFs”

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In Chicago a “TIF” stands for “Tax Increment Financing”. Here is a link to the City of Chicago web site which explains how a site qualifies as a TIF. Basically a TIF limits the amount of property tax the city can collect at the location and in effect gives the owner / developer a big tax break. There are many reasons listed by the city as to why a location might qualify but supposedly it is used to eliminate “blighting factors”.

The Chicago Reader has written a series of articles about how TIF’s are used to reward already rich developers with tax breaks. The Sun Times wrote one this week:

It’s time for another serious look at the pros and cons of Tax Increment Financing in Chicago — a tiff over TIF — the controversial economic development program that’s supposed to revitalize struggling neighborhoods by offering financial incentives to potential investors.

The “sweeteners” come from property taxes that, to a large extent, might otherwise be spent on education, housing, parks, libraries, and public safety.

That’s defensible when there’s enough tax revenue to go around, but it’s problematic in lean times, like now, when Chicago is closing schools, firing teachers, reducing library hours and trying to fight violent crime with fewer police officers.

Another concern is that many TIF “districts” are in affluent areas, especially in and around downtown, which violates the intent of the state law that created the program in 1977 to revitalize “blighted” communities.

Here is a project that is being built under a TIF; this is for a $29M park alongside the Chicago River at Canal and Lake Street. the “River Point TIF” is obviously located in an area that doesn’t appear to be tied to much blight…

While it is likely that politically connected developers and clout-heavy individuals are tied to this process, on the other hand this is one of the few ways the city actually and concretely assists businesses that generate all of the economic value for them. Businesses pay very high property taxes in Cook County / the Loop and then the tax breaks fall back to the selective few that run through this process. It is a very opaque process and there is limited information available on the TIF accounts and funding.

Cross posted at LITGM

Chicagoboyz Cycling Series: Critical Mass (Chicago)

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Last Friday Critical Mass rode in Chicago. I can see it from my balcony in River North – they are traveling Northbound on Lasalle Street. Next time I will try to get down there in person so I can get some of the characters Jonathan talked about down in Florida.

In true Chicago style I don’t have to worry about bicycles because mine was stolen. The hilarious part was that the Chicago police employee actually came and dusted for prints. It definitely wasn’t worth it because you can’t get that messy fingerprint dust off your door jamb or anything else and God knows that no action was taken to find the perpetrators.

Engineering for Failure

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While walking along Wacker Drive in a tourist-y part of downtown I passed this planter that had been recently rebuilt over the last few years.  Obviously the cold winters and the damage they cause were not contemplated by the “A” Team that built it.  While you can’t judge infrastructure capabilities based on a planter, it is easy to find many Chicago examples of large overruns and delays including Millenium Park (4 years late and budgeted at $150M, ended up costing $475M).

We aren’t the only ones screwing up.  Der Speigel (English) describes how high profile German engineering projects have been recently failing, as well.  Their airports, government buildings, and train tunnels have many prominent examples of being far behind schedule and way over budget.  The article also makes the provocative claim that authorities deliberately mislead constituents by downplaying costs at the time of the initial approval, figuring that it won’t be their problem years’ later when the effort is complete and the overrun’s are tallied.

In many instances, the false calculations are deliberate. Werner Rothengatter, a researcher at the Karlsruhe Institute of Technology, has studied major public works projects around the world. He says there’s a similar pattern in democratic societies, where politicians have a tendency to deceive the public about the actual costs of these projects.
Rothengatter argues that cost overruns rarely come as a surprise — regardless of whether they are from the Berlin airport or Hamburg’s new Elbphilharmonie concert hall. During his research, he found that most politicians try to calculate the price to be as low as possible in order to obtain support for the projects — deliberately veiling the potential risks.
“Those who provide honest estimates for projects from the very beginning have little chance of getting them off the ground,” Rothengatter claims. Often those at the political helm take a calculated risk by assuming they won’t be held personally responsible if the costs start to explode.
In a 2009 study, “Survival of the Unfittest: Why the Worst Infrastructure Gets Built,” Danish researcher Bent Flyvbjerg of Oxford University argued that it often isn’t the best projects that are completed, but those that “are made to look best on paper.” Those, of course, are projects that “amass the highest cost overruns and benefit shortfalls.”

The idea that governments make poor project managers and select inefficient efforts for their largess (that they sponsor with your tax dollars) should be obvious, yet it is rarely commented on as a “core” reason for failure.  The idea that non-profit government institutions can make wise capital allocation decisions is actually quite popular and is likely a “given” among many of the young, given that the “free” market is demonized on most popular programming.  As the government makes up a larger and larger portion of our total economy, you can expect more bad decisions and lousy outcomes.

Government bodies inherently make impaired decisions, since they are insulated from failure and have many other parties to blame along the way.  In Chicago, in particular, if you are the selected candidate of the “blue” party and can slog through a primary, your election is guaranteed; many posts run unopposed (even in the primary).  It is hard to imagine anything short of epic failure resulting in being thrown from office.

Cross posted at LITGM

The elephant in the room.

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The Chicago Teachers Union president is lashing out at the villains in the school mess.

“When are we going to address the elephant in the room?

Say What ???

“When will we address the fact that rich, white people, think they know what’s in the best interest of children of African Americans and Latinos—no matter what the parent’s income or education level,” she said, according to SubstanceNews.net.

Oh. That elephant !!!

How about this one ?

What is it with these union bosses ?

Wells Street Bridge Replacement in Chicago

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This weekend the Brown Line of the CTA is shut down as they replace the next section of the Wells Street bridge. It is a big deal when they shut down the Brown Line since thousands of passengers ride that line each workday. This is the second shutdown of the Brown Line as part of this project. Since it was a beautiful Saturday I walked to the construction site to take photos with my Pentax K-01 recommended by Jonathan (who has far better photographic skills).

This view is looking East – you can see the new section that they will weld onto the bridge on a barge and it has a lighter coloration.

This view is looking North from the south side of the river. They have the portion of the old bridge that they plan to cut away “on blocks” on a barge.

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