Greising: Can TIFs Promote Equity? Lightfoot Aims to Find Out.

The mayor has a lot of work to do before the city can plausibly claim its tax-increment financing investments are advancing the cause of racial justice in any meaningful way.

Chicago Mayor Lori Lightfoot (Scott Olson/Getty Images)

BGA President David Greising writes a regular column for Crain's Chicago Business.

Lori Lightfoot promised voters a lot to get elected. One tough one-two combination was the promise to deliver both economic revival and racial equity to a city starved for both.

Lightfoot's public has held her accountable. Equity issues have dogged the proposed Obama Presidential Center, and the launch of cannabis sales in Chicago nearly was delayed by claims that minorities were cut out of the cannabis land rush.

Against that backdrop, Lightfoot last week moved to tackle one of the most contentious equity issues there is: TIF districts.

Tax-increment financing districts rightly have been criticized as an economic development tool that heavily benefits the wealthy and well-connected. Initially designed to help turn around "blighted" areas, the benefits too often have gone toward developers' bottom lines, diverting funds from schools and other public purposes.

Lightfoot has said she intends to change all that. That's right. She plans to use TIF funds as a source of equity in the city. Imagine that.

Lightfoot criticized TIF abuses during the mayoral campaign, but she is sophisticated enough to know well-designed TIFs can help create jobs and encourage investment in neighborhoods that need both.

There is fair skepticism about Lightfoot's claim she can make TIFs promote equity. And the wariness arises partly from her decision during the campaign to back the Lincoln Yards development, even though Mayor Rahm Emanuel had lavished a healthy TIF on the highly lucrative investment.

It will take years of focused effort before Lightfoot plausibly can claim TIFs materially advance equity in the city, so it was good to see Lightfoot get started with a program designed to bring transparency and accountability to Chicago's 136 TIF districts and any that follow.

The most important move in Lightfoot's announcement was the creation of a new TIF Investment Committee. Composed of some of the mayor's closest economic advisers, the committee is designed to ensure TIF spending advances the city's equity agenda above all else.

Lightfoot's promises to be more transparent with TIF data and to fix the city's online TIF portal are good steps, too. The current website too often defies the user's efforts to extract useful batches of data. Any improvement will be welcome—and long overdue.

Lightfoot's equity push with TIFs is not without its missteps. The most obvious was the decision to hire AECOM, a highly regarded and deeply connected infrastructure engineering and consulting firm, to advise the TIF Investment Committee on analyzing the need for proposed TIF district projects.

AECOM is building the controversial police academy in Garfield Park. This makes the firm an easy target for equity advocates. Surely somewhere in this great wide world was a firm, other than AECOM, that could have provided TIF consulting.

The ultimate proof of the TIF Investment Committee's effectiveness will be in the decisions it makes. If the committee continues approving projects in the ill-considered Central Business TIF, and districts in other wealthy areas, ethics advocates will know the reform effort lacks muscle.

Samir Mayekar, the deputy mayor for economic development and chair of the TIF Investment Committee, expresses confidence in AECOM and in the committee's ability to bring an equity emphasis to the city's TIF portfolio.

"The projects need to be catalytic. They need to be for purposes that wouldn't have happened without the TIF," Mayekar says. "There will be projects that will be turned down."

And these reforms will be just the first step. Next up: developing new, enforceable equity standards for creating new TIF districts and terminating the unneeded ones.

Lightfoot is getting started on her promises about equity and TIFs—with a lot more work yet to be done.