- The Chicago City Council voted unanimously Wednesday to create a transit tax-increment financing (TIF) district — expected to generate at least $851 million — in an effort to secure $1.1 billion in matching federal funds for a $2 billion Red Line rail upgrade and modernization program, according to the Chicago Sun Times.
- Both the council and Mayor Rahm Emanuel fast-tracked the vote and paperwork in order to provide matching funds so that the city could potentially lock in the grant before President Barack Obama leaves office. To offer a dollar-for-dollar match, the Chicago Transit Authority will also borrow $428 million.
- Proponents of the plan said that 39% of Chicago residents currently use the Red Line and that expanding the system could prove to be an economic boon. Critics of the TIF said the city might be putting undue pressure on property owners and that it should also try to access state money in order to help meet the matching-fund requirement.
The TIF district requires the city to freeze property values used to compute taxes. Taxing authorities in the district will then be able to tax any actual increases in property value at 20%, with the TIF fund receiving 80%. The additional burden to TIF district taxpayers should average out at less than 0.5%. Baltimore's Port Covington development wrangled a TIF-based financing promise from the Baltimore Development Corporation earlier this year, but that funding component is in jeopardy, as it was contingent on a failed application for federal cash.
In September, the CTA said that, in addition to securing funding, project officials still had to finalize the list of necessary land purchases — both public and private — and complete the required environmental impact studies. Coincidentally, developers of Maryland's $5.6 billion Purple Line light-rail project planned for the suburbs near Washington, DC, are waiting to hear if they must resubmit a similar impact study.
U.S. District Court for DC Judge Richard Leon removed federal approval for the project, along with a $900 million grant, and called into question the ridership data included in the initial review. Leon said that because the Purple Line estimated 25% of its riders would come from DC's Metrorail, figures regarding that system's declining ridership and safety issues must be included in the review. In his first ruling, Leon ordered project officials to conduct a new impact study but subsequently said the Federal Transit Administration must instead review the existing report and decide whether a new study is necessary.