City Says About $600 Million More Is Needed to Finish Cabrini-Green’s Transformation

With a public price tag already exceeding $300 million, the 23-year-long effort to rejuvenate the area around the former public housing project is set to take at least 12 more years and could approach a total of nearly $1 billion.

The long-shuttered Near North Career Metropolitan High School was demolished with the help of property tax funds set aside for the redevelopment of the area through a tax increment financing fund. Construction, which is ongoing, is part of the Chicago Housing Authority’s plan to redevelop the former site of the Cabrini-Green public housing buildings. (Davon Clark for Better Government Association/CatchLight Local)

More than two decades after the first wrecking ball slammed into Chicago's most well-known public housing project to begin a nearly $300 million makeover on Cabrini-Green, Mayor Lori Lightfoot is doubling down with another $600 million in tax money to finish it.

Lightfoot’s administration says the future property taxes are necessary to complete the transformation of the once-maligned area into a bustling community of mostly luxury apartments surrounded by restaurants and stores.

Lightfoot’s new infusion into an area that’s already a windfall for developers is renewing the debate about who has won and lost on the massive redevelopment, especially when so much public money has been diverted from schools, police and libraries.

“They didn’t do anything right from the onset in the redevelopment of our neighborhood,” said J.R. Fleming, the executive director of The Chicago Anti-Eviction Campaign, and a former resident of Cabrini-Green. “And now they want us to believe that they will get it right this time. They didn’t get it right the first time. What makes you think they will get it right this time?”

Last year, Lightfoot’s administration quietly pushed through the Illinois legislature permission to extend the special designation of a 340-acre area on the Near North Side, including the former site of Cabrini-Green. The extension would allow her to use future tax revenue generated there for additional development.

The city has not specified exactly how it plans to use the additional cash, other than noting it would help fund the Chicago Housing Authority’s plan to reshape the area. In 2015, the agency released a three-phase plan to redevelop the area’s remaining empty parcels of land. It called for the construction of up to 2,830 units of housing by 2025. The initial work is ongoing.

Money for the additional construction would come from the practice of tax-increment financing, in which taxes from increased land value are set aside for use in the district. Spending is overseen by a board of mayoral appointees and approved by the Chicago City Council. The Near North Tax Increment Financing District is the fourth largest by revenue among the nearly 140 TIF districts throughout the city.

Already 23 years old, the district was scheduled to sunset this year, which would mean property tax money created in the area would begin funneling into the city’s general fund. Springfield’s approval to extend the district another 12 years means Lightfoot’s administration can move forward with the final steps to finalize the extension. Last week, the mayor’s advisory panel that makes recommendations on economic development set a public hearing on the TIF extension for Aug. 10.

The Near North TIF has been controversial since it was created in 1997 by former Mayor Richard M. Daley, with public housing residents arguing the city’s plan would displace them to make room for wealthier Chicagoans.

Daley’s plan included demolishing public high-rises and then expanding the area’s parks, opening dead-end streets, building new schools and redeveloping the area with “mixed-income” communities. Daley promised residents living there at the time they wouldn’t be displaced, but only a fraction of them now live in the pricey developments taxpayers helped finance.

Fleming, the former Cabrini-Green resident, said construction has taken so long that many former residents have given up hope they would ever be able to return. Some have even died waiting, he said.

As Cabrini-Green made national headlines and was portrayed as rife with crime and staggering poverty, Daley and the CHA envisioned a transformation using a public-private investment model. To help finance it, the city created the Near North TIF. Most of the land within the TIF was owned by the CHA, which meant the parcels didn’t generate any property taxes before construction began. The CHA has leased portions of its land over the last 20 years to developers to build a mix of public, affordable and market-rate housing units.

Today, the area, just a mile to the north and slightly west of downtown, is dotted with luxury condos and apartment buildings.

But the city’s Department of Planning and Development said in a staff report released last week the additional funding is necessary “to help complete the substantial build-out” of the area’s redevelopment, including the empty parcels of land owned by the CHA next to the Target store and south of Division Street.

Mayor Lori Lightfoot’s administration plans to extend the life of the 23-year-old taxing district that feeds the Cabrini-Green redevelopment. City officials say they need the nearly $1 billion in tax money — diverted from the general fund that pays for police and schools and roads — to complete the transformation of the former neighborhood of the notorious public housing project into a bustling community of mixed-income apartments surrounded by restaurants and stores.

The report was made to Lightfoot’s advisory panel, the city’s Community Development Commission, which is charged with making recommendations to the city council.

“CHA and the city, along with its development partners, have worked to realize the goals of the redevelopment plan to create a vibrant, mixed-income community,” said CHA spokeswoman Karen Vaughan in an email to the BGA. “The availability of TIF funds will ensure that this important work continues. The TIF funds are a vital funding source needed to complete the revitalization of the Near North community area. The CHA and the city remain committed to the community and residents as we continue working to meet the redevelopment obligation.”

The empty CHA land was part of the Cabrini-Green footprint, including namesakes William Green Homes and a series of red-brick buildings known as Cabrini Extension South, named for a Catholic missionary. Also waiting to be modernized are the historic Frances Cabrini Rowhouses, which were built in the 1940s for returning war veterans.

The grand vision to transform the neighborhood has been riddled with problems from the beginning. The project has progressed in fits and starts because of economic downturns, lawsuits and funding issues.

The redevelopment began in the 1990s, but construction halted as the city, the CHA and public housing residents battled in the courts. They came to an agreement in 2000, with the CHA agreeing to build 700 units of public housing, and the city agreeing to create 270 units of affordable housing. In 2015, the CHA agreed to increase the number of public housing units to 1,800. The agency still remains 580 units short of that goal, according to CHA records.

Last year, the city council approved spending up to $4 million in TIF funds to demolish the vacant Near North high school to make way for the first phase of redevelopment there, a high-rise with about 190 units of mixed-income housing.

As projects are completed and property values rise, the district increasingly generates more taxes. Over the last two decades, it produced more than $320 million. If extended, the city expects it will create about $600 million more over the next 12 years.

So far, about $50 million went to the developers of mixed-income housing, who have created more than 1,000 units, records show. The developments are called mixed income because about a quarter of the homes were set aside for public housing residents, 20% have income caps, and the rest are rented or sold at market rates.

The city spent about $30 million in TIF funds to redevelop neighborhood schools and more than $13 million to expand and improve area parks and help finance the construction of a fieldhouse that bears the name of Secretary of State Jesse White, records show. In recent years, the city also has tapped millions in TIF funds to help plug city budget holes.

The Cabrini-Green redevelopment was initially set to be completed in 2010, but the 2008 housing market crash delayed projects. When one of the developers couldn’t make its sales quotas, the CHA and the city bailed it out and kept a bank from auctioning off units.

That developer, the Holsten Real Estate Development Corp., is now completing the final rental phase of the Parkside of Old Town redevelopment, which will deliver 102 units. About a third of those units will be reserved for public housing residents, a third have income caps, and a third can be rented at market rates. The $50 million project, or nearly $500,000 per unit, includes $9.5 million in Near North TIF money.

Some experts said the area supports expensive housing because of its location. The redevelopment of the Near North TIF, along with the displacement of public housing residents throughout the city as the CHA moved toward privatization, helped cement the city’s segregated lines, as many displaced public housing residents, who were almost all Black, were forced into disinvested areas on the city’s South and West sides, where TIF districts are far less lucrative for developers.

“TIF has never worked well with equity and need,” said Rachel Weber, a professor of urban planning at the University of Illinois at Chicago. “It is not conducive to encouraging equitable development.”

The report from the city’s Department of Planning and Development doesn’t specifically say what future projects would be financed with the additional TIF dollars. It said the TIF extension is needed to fulfill the CHA’s “vision of creating diverse mixed-income communities.”

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