‘Step back and reassess’ rushed Lincoln Yards TIF, groups say in lawsuit

Chicago officials are accused of manipulating the process for the megaproject to qualify for $1.3 billion in financing from the city.

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Photo by April Alonso

Critics argue that the controversial, $6 billion Lincoln Yards project that would bring a 55-acre campus of condos, retail and entertainment to the North Side, was rushed through by the Emanuel administration and City Council allies despite it relying on hundreds of millions in TIF funds meant to develop blighted areas.

A Chicago Tribune report on the timing of City Council approval of tax increment financing for the Lincoln Yards megaproject appears to confirm a central claim by community groups who are suing to stop the project, according to a lawyer for the groups.

City officials were aware that rising property values meant that Lincoln Yards — a $6 billion development including office, commercial, and residential components on 55 acres on the Near North Side — wouldn’t qualify as “blighted” and thus be ineligible for $1.3 billion in TIF financing if 2018 assessed values were finalized before City Council approval, the Tribune reported.

That’s a key point in the lawsuit by Grassroots Collaborative and Raise Your Hand for Illinois Public Education: “When the [TIF district] was approved … the [equalized assessed value] data was available and should have been used,” it claims. That would have shown that land values in the proposed TIF district “had grown at a greater rate than the rest of the city for three of the past five years” and “the area would not have qualified as blighted” under state law.

The Tribune reported that the value of the Lincoln Yards land grew by 13.11% in 2018, more than half a percentage point higher than the rest of the city. It’s now valued at $87.4 million, according to the Trib; it was $59.6 million in 2012, according to the city’s TIF eligibility study.

The assessments were made public by the Cook County clerk on June 20, two months after City Council approved the deal, but “the law doesn’t say you can only use final certified [equalized assessed values],” said Aneel Chablani of the Chicago Lawyers’ Committee for Civil Rights Under Law, who’s representing the plaintiffs. “It says the most recent year that data is available, and the data was available.”

The “race to beat the clock” identified by the Tribune at Lincoln Yards could be part of a longstanding pattern. The lawsuit cites a 2008 article by 5th Ward Ald. Leslie Hairston discussing ways cities can manipulate the TIF qualification process: “It appears there has been an increase in the number of TIFs created in [Chicago] just before reassessments take effect,” Hairston wrote.

In addition to challenging the “blight” designation for Lincoln Yards, the lawsuit points to rising investment levels in the area to challenge the contention that investment would not occur without TIF support, and it charges that the city has administered the TIF program — by providing subsidies in areas that don’t need them — in a way that has been detrimental to low-income communities of color.

Since the plaintiffs filed a motion for a preliminary injunction barring the city from disbursing TIF funds to developer Sterling Bay while the lawsuit is being considered, the city has moved to dismiss their lawsuit by challenging their standing, Chablani said. A hearing on the city’s motion is set for Sept. 11.

There was some surprise among the plaintiffs that the city is continuing to oppose the lawsuit under the administration of Mayor Lori Lightfoot, I’m told. As a candidate, Lightfoot called for delaying approval of the TIF in order to allow greater community input. As mayor, she has promised to “carefully scrutinize” spending on the project and try to “win some savings.”

“Our clients are looking for an opportunity to step back and reassess this project before things really get underway at Lincoln Yards,” said Chablani. 

Their lawsuit seems to provide the administration with the perfect opportunity to do just that — particularly in light of questions about whether the approval process was rigged.