Every Park Ridge adult resident who hasn’t been in a coma for the past decade knows about the Uptown TIF. And every such resident who has paid attention to City government knows what an economic disaster the Uptown TIF has been so far.
The $20 million-plus in surplus revenues projected by its supporters have been replaced by about the same amount of projected deficits, burning off tax dollars that could be better used on things like infrastructure.
Instead of “the gift that keeps on giving,” consider the Uptown TIF the gift that keeps on taking – in this case, money out of the pockets of Park Ridge taxpayers – compliments of the three former mayors and many of the twenty-five former aldermen who were so offended about being held accountable for that boondoggle by Mayor Dave Schmidt that they publicly endorsed Schmidt’s opponent in the April 2013 election. But to no avail.
While those former mayors and aldermen continue to lie low, however, Schmidt and the current Council have been struggling to make the best out of a bad situation.
And as reported in last week’s Chicago Tribune (“Park Ridge votes to refinance downtown TIF debt,” February 3), the Council voted unanimously last Monday night to refinance between $16.4 million and $17 million of outstanding TIF bond debt with the expectation of saving as much as $1.9 million in bond interest. The final vote on that refinancing proposal is expected at next Monday (Feb. 16) night’s meeting.
Schmidt and the Council have been looking at such refinancing for a while now, and had asked City staff and its bond advisor, William Blair & Co., for ways to do it that would maximize the City’s savings.
Back in November and December, City Mgr. Shawn Hamilton endorsed the bond advisor’s recommendation to either call the Series 2006B bond and issue a new one, or to pay off the existing bond with a conventional bank loan. But at the December 8, 2014 meeting, Schmidt and Alds. Knight and Mazzuca wanted more information and better comparisons between the total costs and savings of a new bond versus bank loan. So the decision was deferred.
That deferral drew flak from several quarters, including from 1st Ward aldermanic candidate John Moran, who wanted the bank loan and its $630,000 savings locked in right then and there.
According to the Tribune article, however, the delay actually worked to the City’s advantage because it could refinance that Series 2006B bond and a newly-callable 2005 bond together, saving administrative costs. And what looks like just plain luck has kept the interest rates basically the same.
That’s the good news.
The bad news is that, as reported by the Tribune, the Uptown TIF will consume approximately $2 million of the more than $3.9 million recent tax increase. The TIF costs are also expected to increase by an average of $400,000 a year in six of the next eight fiscal years because the TIF district can’t service the TIF debt from its own tax base, as TIFs are supposed to do.
And what this Uptown TIF was going to do, according to then-mayor Ron Wietecha and a compliant city council back in 2003 when this red-headed step child was born. Of course, that was before Wietecha resigned the mayor’s chair two years into his third full term and fled to Barrington; and before successor Mike Marous agreed to take the reins solely for the remainder of Wietecha’s term and engineered the sweetheart deals on the City’s dime for Uptown developer PRC Partners; and before his successor, Howard Frimark, spent his four years in office trying to cut deals for his buddies.
Given how those three mayors and a few handfuls of their former aldermanic TIF aiders and abettors couldn’t get the voters to show Schmidt the door in 2013, we’d like to think they might show up at City Hall for one of these Council meetings at which the Uptown TIF refinancing is being discussed, and offer some innovative solutions to the problem they stuck Schmidt and this Council with – if only as a sporting gesture.
But apparently none of them wants to admit maternity or paternity of that red-headed step child.
And none of them is offering to pay child support, either.
To read or post comments, click on title.
19 comments so far
I applaud this mayor and council for taking on this problem they were left by previous administrations whose members have been in hiding (and, in the case of Wietecha, in self-imposed exile) since they left office. But if they can save us as much as $1.9 million in just this one refunding transaction, I shudder to think of how much this whole mess has been costing us.
EDITOR’S NOTE: At this point, should nothing change in the next 12 years, it will have cost us over $20 million – as in LOSS, the opposite of PROFIT.
Another example of how government doesn’t belong in the development business.
Lest anyone forget, when this was foisted upon the residents the original projections had the Uptown TIF generating some $25 million of positive cash flow over its 23 year life. With a current projection to lose more than $20 million that’s a 180 degree turn and +$40 million swing.
This TIF is a textbook case for why a municipality should not enter into these sorts of arrangements. Hindsight is 20-20 but even so this was a collossally bad decision.
The City has gotten a terribly expensive lesson in public/private investment, let’s hope it has learned and that the lesson sticks.
EDITOR’S NOTE: Similar lessons could also be learned from public/private boondoggles all over Illinois, including in Des Plaines (http://prev.dailyherald.com/story/?id=262550), Rockford (http://www.rrstar.com/article/20101113/News/311139945) and Chicago (http://www.chicagoreader.com/chicago/chicagos-tif-program-collects-another-457-million/Content?oid=10366068 – although we didn’t see this headline until AFTER we had published this post), but we doubt the yokels responsible for them are any more forthcoming about the errors of their ways than our former officials are about theirs.
That also shouldn’t excuse the boneheadedness of our former elected officials, who should have been smarter than their counterparts in Des Plaines and Rockford – and less corrupt than their counterparts in Chicago.
Our former elected officials WERE less corrupt than their counterparts ANYWHERE. You can say people are stupid but it’s a bit risky to say they’re corrupt, don’t you think?
On a happier note, do you really, really think “nothing will change” in the local economy in the next 12 years? Really? You see no coincidence that this project got launched at the same time as the recession hit? Do you think it’s fair to judge this project by how it fared during the second-worst economic downturn in our country’s history? It’s not only unfair, it’s unreasonable and unrealistic.
EDITOR’S NOTE: The exact point where the corruption of sweetheart deals takes over from the abject stupidity of such deals isn’t always a bright line, but it’s hard to believe our City politicians were so supremely dumb as to commit between $30 and $40 million of taxpayer money to a bogus “partnership” which – to paraphrase a popular Liberal/Progressive trope – “privatized the Uptown TIF’s profits while socializing its costs.”
And which was “unfair,” “unreasonable” and “unrealistic” to the taxpayers both in theory and in execution.
You mentioned that $2.0 million out of the $3.9 million increase is for the TIF issue.
What is the other $1.9 million going to be used for?
EDITOR’S NOTE: We believe $1 million comes from the Library referendum. We’re not sure about the other $.9 million.
I STRONGLY agree with everything you and Alderman Knight have stated but I have to admit I find it fascinating how you seem to go on about it as if it were some how a mistake of biblical proportions. It is a very expensive lesson but if you look at a 20,000,000 loss over 23 years that would equate to about that is 869K, or about 1.5% of the cities total budget. Unfortunately we will have to pay for it but it is hardly insurmountable. I mean if you equate it to a family budget it is kind of like a bad vacation. You paid 3-4 grand for the trip and it sucked but you still have to pay the credit card bill.
The people of PR don’t seem to really care about these kind of numbers. I mean these are the same people, led my Mel Thillens (remember, he cares about the taxpayer!!!), that agreed to spend 13 million on some park land. You reported that there may be a 2 million cost over run so that makes about 75% of what the TIF is projected to lose.
EDITOR’S NOTE: Sorry, but only an idiot – commenting anonymously – would suggest “[t]he people of PR don’t seem to really care about” losing $869K a year on a project that was supposed to generate an $869K per year profit.
And the TIF is projected to lose $20 million, so a $2 million Park District cost over run is about 10%, not 75%, of the total TIF loss.
Apparently I was not crystal clear. When I stated “so that makes about 75% of what the TIF is projected to lose” what I was saying was that with the 2 mil over run it will be about 75%. Take the 13 mil and add the 2 mil over run and voila, 75%
Sorry that was not clear.
EDITOR’S NOTE: Well, that helped.
But you’re missing two really crucial points that make comparing the Uptown TIF costs to the Youth Campus/Prospect Park costs a fool’s errand:
1. The City officials were so desperate to push through the Uptown TIF that they had no intention of letting it go to referendum, so the taxpayers never got a chance to vote on it; and
2. The Youth Campus Park referendum was sold to the taxpayers as costing $13 million to build but without any real faux-expectation/promise of a big payday for the taxpayers, while the proponents of the Uptown TIF claimed it would pay back its entire debt and generate a $23 million-plus profit over the TIF’s lifetime.
Plus, we understand the Park District got an MAI appraisal for the property before they went to referendum, while the City foolishly sold off the Reservoir Block to the Uptown TIF developers without any MAI appraisal.
You are not the first to call me an idiot.
I am simply observing the behavior of the people of PR like meeting attendance and voter participation. There has been no huge backlash about the TIF. The only people who hammer on it are you and the politicians. Hell, the 800 pound gorilla in the room is the Schools Districts what they spend dwarfs any TIF money and people don’t even go to school board meetings.
EDITOR’S NOTE: We didn’t think so.
What kind of “huge backlash about the TIF” would you expect, given its “done deal” nature? The taxpayers were never given a vote on it. And by the time the Schmidt Administration was finally able to get some reliable numbers about the TIF’s performance, all three of the TIF’s mayoral perpetrators were out of office, as were all but one of the aldermen who voted for it.
And while we think the schools overcharge and underperform, comparing them to the TIF is kumquats to cantaloupes.
Anon 5:43-
Was I out of town for the TIF referendum that passed by a wide margin like the Youth Campus? I’m looking forward to the Youth Campus Park, since there is hope for something of quality done here.
While it is a debacle here, there are success stories of TIF’s in other areas. One thing we have to face in Park Ridge is…we just can’t execute things correctly. I’m not sure if it’s the arcane/rigid rules or the old codgers that have so much influence, but things just don’t work right: Examples:
* Commerce, Public Schools, Salting, Lights, Christmas Lights, Charities, Rules for Development, Quality of Parks, Quality of Community Center, Quality Library, and the TIF.
What town needs a referendum to open its library on Sundays?????
It’s like there’s so much arguing that a lot of money, just produces a substandard product so everyone can be equally unhappy with the result.
If the commenters here ventured out to “like” suburbs they would notice that in almost every measurement, Park Ridge has substandard results and facilities. It’s embarrassing.
Maybe that former Mayor/Council were wrong, but maybe they saw that Park Ridge has the facilities of Gary and wanted to do something about it. They failed, but I also chalk that up to how hard it is do get anything done in this town. From historical made up crap to the permit process to business rules, there is a market based reason, many many businesses say no thanks to Park Ridge.
So, to those who are Monday morning QB’s about the TIF, maybe you bear some responsibility for how hard it is to accomplish anything in this town.
Sorry!
EDITOR’S NOTE: Gary, can you come back when your ADD is under control and you can confine your comments to just one two topics, none of which are Gary IN?
The multiple topics were a reference to Park Ridge not having success at really anything it does, so how could it handle a innovative development within its same rules.
Beyond year 1 of Centennial Pool, which seems to be a rousing success, what other project has been a success in town? What else does Park Ridge do well?
Park Ridge is a metrically measured, well educated, Upper Middle class family suburb, very light on crime. It’s a really easy starting point. Please don’t point to our schools either.
However, with all of the education, we are still bound by the old codgers, arcane laws, and refusal to ever have the guts to recognize Park Ridge has fallen behind. It’s not “cute” or a “badge of honor” to suck at things.
The elders who run the town, don’t venture out to compare, because they are happy hidden in their self-described (only) historic (old) eyesore homes.
The TIF had good intention. Let’s not make up corruption where there isn’t any.
It couldn’t succeed within the rules and attitudes of those that really control the town. Combine that with an absolute historic market crash, and there you have it.
Has anyone studied why this failed (beyond the market crash)? Of course not. It’s much easier to complain for 6 years about your predecessors than acknowledge and learn why it failed.
The excuse meter has run its course, hasn’t it?
And, please don’t fool your readers and pretend 100% of TIF’s fail. Google TIF success and you will find many.
But, again, not here in Park Ridge.
EDITOR’S NOTE: “Gary,” it’s hard to know even where to start with all the uncorroborated allegations and just plain nonsense you’re tossing around.
If you’re going to blame “old codgers” and “elders” for anything, have the guts to name them. The same goes for those “arcane laws.”
“The TIF had good intention[s]” only for the developers, the politicians who thought it was an easy way to earn a victory lap, and the simpleminded who allowed themselves to be mesmerized by its pie-in-the-sky promises like babies by shiny objects. And if the TIF’s success was so fragile it could be so totally cratered for its 23-year term by an 18-month recession, then the public officials who got us into it without even the benefit of referendum were even dumber, or worse, than we’ve accused them of being.
But if a TIF-apologist like you, “Gary,” or those three former mayors and the 18 or so aldermen whose fingerprints are all over this TIF boondoggle want to come out of hiding and publicly conduct a course on “why it failed,” we’d be willing to bet dollars to donuts that the City Council would be willing to give them a couple of hours at a Finance & Budget COW to take their best shot at enlightening the folks currently around The Horseshoe, all the taxpayers who are stuck sweeping up after the perps, and the editor of this blog.
But we’re not holding our breath waiting for either you or them to come out of the closet.
Often when elected officials and appointed bureaucrats are trying to sell a new “project”, whether by referendum, committee vote or executive action, they say “If we DON’T do this, Park Ridge won’t grow and everyone’s taxes will keep going up!”
If Uptown had been scuttled, there is no doubt in my mind that its partisans would be haunting every comment section, every town meeting, every election, saying “Things would be so much better if Uptown had been approved!”
Well, it was approved, and look what we got.
I’m glad Uptown is here because I like shopping there — I always try to shop local. But I don’t understand why it required a generous helping of corporate welfare, or, as was commented above, “privatiz(ing) the Uptown TIF’s profits while socializing its costs”.
Well, it’s because the powers-that-were really, really, REALLY wanted Uptown. And when spending OPM to make it happen, why the heck not?
Thus we must look with skepticism on the next big incremental taxpayer commitment, whether it’s a development that should only be funded by developers, a park facility that will come in way over budget or a teacher pay increase on top of the automatic lane/step increases they already get every year.
EDITOR’S NOTE: Exactly!
And for the record, our only beefs with the Uptown TIF are (a) the whole TIF concept was ill-conceived and likely illegal for that area, as D-64’s TIF attorney told D-64’s then-board; and (b) the taxpayers should never have been committed (by former elected officials) to cover all that debt for the benefit of the developer, at least not without a referendum.
I’ve said it before about others and I’ll say it again about “Gary”, I want some of what Gary is smoking.
“The TIF had a good intention”; exactly what would that have been?
Putting that aside, the City’s decision to backstop the total of the project with a general fund guarantee was plain stupid. Anyone trying to blame a +$40 million swing in cash flow (originally thought it would be cash flow positive by +$20 million and now think it will be cash flow negative by +$20 million) on the 18 month “great recession” is full of it.
Compounding the stupidity of back stopping all of the debt it did the City essentially bribed the school districts and the park district into approving the TIF by committing to payments every year for so-called new students and new property, that no one seems able to define, notwithstanding the fact that the TIF might not generate positive cash flow. These payments approach $1 million a year and the City gets zip, zilch, nada for them. NOTHING.
The Uptown TIF and the related inter-governmental agreements that committed so much of the City’s treasury to this deal with NO downside protection have to be one of the all-time worst public / private partnerships ever. EVER.
And to the dolt who tried to minimize the financial pain the City is suffering by spreading the likely City “loss” over the 23 life of the TIF understand this: a.) that just a stupid way to rationalize the TIF losses; the deal… really no deal would get done with financial modeling like that and b.) given how the debt is so back end loaded the overall payments and the City’s “contributions” escalated exorbitantly this year and will do so for the next several. Right now we have a built in $350k to $400k tax increase a year to cover the debt… depending on debt refinancing.
The Mayors and Aldermen that did these deals left a delayed financial time bomb. I for one am glad PW continues to talk about this and castigate these former elected officials. If for no other reason than it should be a stark and ominous reminder to any current elected officials about the vagaries of this sort of stuff. Santayana.
EDITOR’S NOTE: That pretty much sums it up, although we’re pretty sure the crooks and idiots who helped Li’l Richie and the Rahmfather run Chicago so deeply into the ground did a number of ridiculous public/private partnerships worse than the Uptown TIF, and on a far grander scale.
But our mopes took their best shot at it.
Given the size and scale of the Uptown TIF and the complete opposite swing from an expected +$20 mil positive cash flow to a more than $20 mil expected negative cash flow I’d say this ranks at the top of the list of TIF debacles.
Not sure there’s a database of TIF debacles out there, guess I’ll check it out.
Until then, no matter how the thing looks, or the “fact” that much of the residential is purportedly owned or the retail is… well I don’t know what the retail is… there?, no matter what the thing is a financial disaster. And I’d say it’d be hard to beat, expectations versus results.
EDITOR’S NOTE: Based on the swing versus total dollars lost, you may be right.
Thank Heavens for Anon 5:43 and Gary. Finally, somebody who has a clue as to a) the actual extent of the apocalypse and b) the background on what happened and what could have and should have happened. What’s really sad is that the list of things we do wrong, including not supporting little things like Christmas lights, medium things like Economic Development effort of any kind, and big things like all the urgent human needs services, and everything else the City stopped funding, was done because “It’s the TIF’s fault.” One wonders what the City would have found to blame for their underlying desire to end government’s connection with human needs if it were not for the TIF. THat blessed scapegoat.
EDITOR’S NOTE: Yes, it IS “the TIF’s fault” because (a) the TIF was so ill-conceived it would have been stopped legally by D-64 if those feckless D-64 board members didn’t disregard the advice of their own TIF attorney and accept the City’s bribe; and (b) it was so poorly executed that the alleged “partnership” between the City and the developer was a purely one-way deal that privatized the profits and socialized the debt – crony Crapitalism at its worst.
So once again we invite all you former City officials (or their spouses and friends) who keep anonymously defending this $20 million-plus boondoggle to come out of the closet, show up at City Hall, and claim paternity/maternity of your illegitimate child.
Hey WTF at 2:16pm, if you read my comment, you see that I said a market crashed…combined with other things caused the failure. But nice try chief.
It was leading to my point that was never answered:
– Why can’t Park Ridge accomplish anything successful as local government(s)?
You are exactly proving my point. Fine, blame that it’s backloaded…your explanation does show that it was dumb.
I don’t think I made the case for its success. WHY did it fail so badly? What is inherently so Park Ridge, where it’s harder to succeed here?
As I said, the new Centennial Pool is the only success (one year in) that I can think of that local government has accomplished. Otherwise, Park Ridge is bad at everything! See my brief list above.
But to WTF, you are the reason (and are probably someone in power) why Park Ridge proudly celebrates substandard product, because it’s our substandard product. But, as long as we can complain about our former rivals, then, you win, right?
EDITOR’S NOTE: At the risk of raining on your one-man parade, “Gary,” you’re guilty of exactly what you are criticizing.
The new Centennial water park is a poster child for a “substandard product”; e.g., its substandard design allows it to be open only three months a year, and it was built without what pool survey respondents identified as the most desirable design feature, a “lazy river”. Oh, and it’s only as a one-year wonder so far, whose “success” appears to have come from cannibalizing Hinkley Pool patrons, which reported its lowest attendance in at least 5 years. That’s because it was built as cheaply as possible so that the Park Board wouldn’t have to hold a referendum to get the kind of money it needed to do the job right.
Shut up about the housing.
Out of all thing there’s nothing wrong with it.
EDITOR’S NOTE: Context?
Don’t see what your problem is with the housing Gary.
Looks fine to me.
EDITOR’S NOTE: There ya go!
I am interested in hearing 853 explain why he/she thinks we cannot successfully accomplish anything as a local government. What exactly did he/she want us to accomplish that we have not? Managing the TIF debt? We have done everything conceivably possible to do that. You cannot just run off and refinance bonds anytime you wish. There are legal limitations not to mention practical and financial ones. Flooding? You will have to define success there for me. If you define success as providing complete protection against massive storms, then break out your checkbook, because that would cost all of us a mint and more. Are you talking about economic development? That is one tired horse. We have had as much economic development as the towns around us (except Rosemont which is building itself one helluva bond debt bubble). Heck, they tore down a chunk of downtown Skokie because they could not fill the spaces. Read the Journal Speak Out section and note the Des Plaines residents regularly moaning about their moribund downtown area. The fact is our sales tax revenues have been growing steadily over the years. We have new businesses coming in, new restaurants opening, new construction everywhere.
O’Hare? You got me there. I hit that elephant with my fly swatter, but the planes are still flying. It will literally take an act of Congress to provide the relief sought by those affected.
This “local government” has succeeded in reversing crippling multi-million dollar deficits in the City’s Operating Fund; we have reversed years of neglect regarding flooding and sewer maintenance; we have become THE most transparent government anywhere around; we have also become the most accountable government around, instituting tight spending controls on staff and making them justify their recommendations and answer for their decisions.
Can we do better on all of these fronts? Arguably yes. But to say that we have failed to succeed at anything is flat out wrong.
Mr. Mayor:
When you ran for office the first time you stated…..”For example, our inadequate storm sewer system has caused many residents to lose thousands, and even tens of thousands, of dollars of possessions, including such irreplaceable things as family photos and mementoes. It also has increased the cost of their insurance and caused them a lot of time, effort and drudgery related to clean-up and repairs.
Today is is….” If you define success as providing complete protection against massive storms, then break out your checkbook, because that would cost all of us a mint and more”.
OK….so what about all those folks you mentioned in the original quote?? How many of them will now no longer face what you spoke of and empathized with so eloquently? I guess they are just SOL.
EDITOR’S NOTE: The mayor can speak for himself, but the first thing to remember is that in the spring of 2009 NOBODY had any clear idea of the condition of the existing sewer system and the scope of what would need to be done to address the flooding issue – because PAST MAYORS and COUNCILS consistently scaled back relief (i.e., storm water) sewer installation, never undertook any serious flooding studies, but made changes to the Zoning Code that made it easier for people to build bigger and bigger residences.
Since Schmidt’s election in April 2009, however, flooding has never been OFF the Council’s radar, starting with his formation of the Flood Control Task Force and continuing with the engagement of Burke Engineering that resulted in the completion of 9 specific flood control projects.
And we also found out, for the first time, that it will cost around $2.3 million (or $100,000 per home) for 100-year flood protection for Mayfield Estates, at least $16.6 million for 100-year protection for the Northwest Park neighborhood, and way more than that for only 10-year protection for the area west of the Country Club. So to give the entire City 100-year flood protection is guestimated at between $100 and $200 million.
So how big a check are you willing to write?
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