CHICAGO - The Chicago City Council late Wednesday approved $611 million of tax increment financing projects, including an unprecedented redevelopment plan for the city's most notorious public housing complex.
The city will spend up to $281 million to help replace much of the Cabrini Green Public Housing Complex. It is still unclear exactly how much of the improvements will be paid for with bonds, and when any related deals might come to market.
Under the tax increment financing plan passed by the council, the city would issue bonds to pay for infrastructure and land acquisition that could lead to a tenfold increase in the area's taxable value - to more than $400 million. The added tax revenue generated by the project would then pay off the bonds over the next 20 years.
"This is truly the best hope for public housing anywhere in the nation," Edward Eisendrath, chairman of the Chicago Housing Authority, told the council's finance committee last week.
In 1993, the Department of Housing and Urban Development gave the Chicago Housing Authority $50 million to begin demolishing the most deteriorated Cabrini units, but the city plan goes much further.
The city intends to replace eight dilapidated, crime-ridden high-rises with a neighborhood of elegant row houses. It will also renovate remaining public housing units, and build a new school, public library, streets, and other amenities for the 340-acre neighborhood.
The new development will stand in stark contrast to the housing project that has produced some of the city's most notorious crimes.
As it often has, Cabrini grabbed headlines with a tragedy earlier this year, this time when a 10-year-old girl was beaten, raped, and doused with gasoline before being left for dead in the stairwell of her grandmother's Cabrini apartment building.
The city promises the new neighborhood will have room for people of all socioeconomic classes, but less room for the gangs that have terrorized the high-rises.
Still, the potential for developers to make up to $100 million on the project angers many community activists and public housing residents. Also, because Cabrini Green borders the city's two poshest residential neighborhoods, opponents fear that the plan is just an excuse to remove poor residents from prime real estate.
Chicago officials counter that the city will require developers to save 30% of their units for public housing residents. The new development will be larger than the existing complex, and the city guarantees that all current residents will be able to get a unit if they want one.
Mayor Richard Daley, who has championed the plan, said a mixed-income neighborhood will end the isolation of the city's poorest residents and offer them the opportunity to break the cycle of poverty that has been Cabrini's hallmark.
Along with the Cabrini TIF, the council approved a $135 million TIF district on the south side of the downtown. The city hopes to spur the pace of development in a burgeoning residential neighborhood in the former industrial and commercial corridor.
The council also authorized up to $195 million of TIF bonds to redevelop the city's north Loop theater district. Mesirow Financial Inc. will underwrite the deal in the fall, said Lawrence Morris, head of the public finance unit.
