Chicago uses a complicated tool to finance some redevelopment in the city. It’s known as tax increment financing, or TIF. Scrutiny continues to mount against how Mayor Richard Daley uses those funds, and community groups are ramping up fight for more of those dollars. They want the TIF pot of money to better fund affordable housing and nurture small businesses – not just chain stores and major developers.

Related:
TIF District Overviews-Dept. of Community Development
How TIF Funds are Spent in Chicago (Neighborhood Capitol Budget Group)
TIF district projects [pdf]

The Chesterfield Tom Thumb Day Care Center on South Cottage Grove is a family-owned business.

Preschoolers relish in playtime right before naptime. The facility has received $8,000 from the city to help pay for a new boiler and deal with drainage and sewer issues.

Britt Savage is a manager at the daycare.

SAVAGE: We’ve been able to have a 70-foot awning put up a year ago to basically provide some uniformity to our façade.

The money came from a bucket of TIF money sliced out to help small businesses. Chesterfield Tom Thumb belongs to the 87th and Cottage Grove TIF; it runs along 71st to 95th and Cottage Grove with a couple of pockets east and west.

This $44-million TIF district is less interested in sexy development such as big retail. Savage and Alicia Spears are part of an active TIF advisory council that has its own vision.

SPEARS: We were looking at the tool as predominately to something to stabilize and build the small businesses, which the area encompasses. Community groups like this are increasingly looking at TIF as an economic antidote.

WEBER: As other sources of funding dry up, TIF is seen as manna for community organizations, schools, for affordable housing developers. All of these nontraditional stakeholders in the development process have suddenly become very interested in using TIF for their own purposes.

Rachel Weber is an urban planner at the University of Illinois-Chicago. TIFs were created in Chicago in 1984 to help blighted areas in desperate need of redevelopment. That definition appears to be loose. As of late, critics have questioned Loop developments benefiting from TIFs. The Chicago Reader has excoriated the city for its lack of transparency.

Weber says scrutiny is emboldening neighborhood organizations.

WEBER: I think they figure if the city can give millions of dollars to large real estate developers, why can’t they give us some as well? So we have seen sort seen this burgeoning of grassroots attempts.

Last year 155 TIF districts collected $570 million of incremental property tax revenue. This year the city council passed a TIF sunshine ordinance for better accountability. Last month Ald. Brendan Reilly rejected a TIF district in his downtown 42nd ward citing that the commercial area didn’t need it.

Joy Aruguete is executive director of Bickerdike Redevelopment. Bickerdike is part of the new Sweet Home Chicago campaign, a broad coalition that wants 20 percent of TIF dollars annually to go toward affordable housing.

ARUGUETE: This is particularly important because we’re in a time of decreased resources for affordable housing development at the same time the demand is rising.

The city says it is in discussion with Sweet Home Chicago members. One of the other criticisms the city faces is that TIF money siphons off money from other areas.

In the Cottage Grove TIF, the city decided millions would be detoured to the building of a new South Shore High School. Part of the Cottage Grove TIF is in Ald. Fredrenna Lyle’s ward. She didn’t like how that decision got made.

LYLE: What they though that was most offensive, they totally disregarded the fact that we had a TIF advisory council. Many alderman don’t so I think they just assumed that there was no one that was actively meeting and planning the use of that money. And they’ve been meeting almost every month.

State law allows the porting of funds to adjacent TIFs. And the city says it does not interact with the TIF advisory councils because there’s no legal or policy requirement to report to them.

TIF district projects PDF compiled by Jennifer Lacey.