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Report: Chicago funneled millions in TIF dollars from South Side toward Navy Pier project

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A recent report has called the Emanuel Administration’s controversial use of tax increment financing into question

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Designed to fight blight by spurring development in areas that would otherwise not see new investment, Chicago’s allegedly Byzantine application of tax increment financing (TIF) funds is once again facing public scrutiny. This weekend, a joint investigation by Crain's Chicago Business and the Better Government Association shed light on funds earmarked for land acquisition for McCormick Place’s 1,205-room Marriott Marquis hotel instead being transferred to rebuild Navy Pier. Located just east of downtown’s high-rent Streeterville neighborhood, the popular lakefront tourist attraction is likely the least blighted area of the city.

A series of emails and internal documents obtained by Crain’s and BGA through the Freedom of Information Act show that the Emanuel Administration’s “elaborate shell game” started in 2014 as $55 million worth of TIF payments designated for the hotel project were diverted, dollar for dollar, towards the Pier. In essence, Chicago’s Metropolitan Pier & Exposition Authority (MPEA)—the agency that both runs the convention center and owns Navy Pier—acted as an intermediary to transfer funds to Navy Pier Inc., the private nonprofit charged with running the Pier.

Alderman Pat Dowell (3rd), whose ward includes McCormick Place, has been particularly vocal about being left in the dark about the shifting of funds from the Near South Side to the downtown tourist attraction. She is demanding that the City Council hold hearings on the matter. “For a flip-flop to be at play here where the money didn’t go where it was supposed to go and instead went to Navy Pier,” said Dowell, reports the Sun-Times. “I’m really furious about that because I worked in good faith with these people.”

Though city and Navy Pier officials declined to go on record in the Crain’s piece, the Emanuel Administration maintains that the city properly reimbursed the MPEA “for eligible expenses related to the new hotel being built to support the increased business at McCormick Place and the number of new developments in the area.” According to Administration officials, the process had been fully transparent as early as 2013.

“As was discussed publicly at the time, this move also made it possible for the Metropolitan Pier and Exposition Authority to invest in the Centennial Plan at Navy Pier, helping ensure it remains a top national tourist attraction and economic driver for the city of Chicago,” read an official email statement.

Meanwhile, a protest at Navy Pier by community members and the Grassroots Collaborative has been announced for this morning. The group describes the TIF program as “rampant with abuse and a lack of transparency” and is demanding that the city reimburse taxpayers the $55 million. That money, they argue, should instead be spent on Chicago’s financially struggling public schools.