Mayor Rahm Emanuel pushed through a $5.5 million subsidy for Presence Health in January 2018. [Heather Cherone/The Daily Line]

The state’s largest Catholic health system announced Thursday it would give up a controversial $5.5 million city subsidy for its new Downtown headquarters.

The Chicago City Council voted 31-18 in January 2018 to spend $5.5 million in tax increment financing district funds to renovate Presence Health’s new headquarters at 200 S. Wacker Drive.

With Mayor Rahm Emanuel’s full-throated support, the subsidy was approved after a heated and emotional debate and over the objections of Ald. Brendan Reilly (42) and other aldermen who said it was improper for public funds to be used to help a health system that fails to provide what they called basic reproductive health services, including contraception and abortion, that conflict with Catholic doctrine.

AMITA Health purchased Presence Health last year, and CEO Mark A. Frey said a statement Thursday that the firm had “decided not to complete the paperwork required to finalize the Presence Health TIF agreement.”

Representatives of AMITA Health declined to answer questions about the decision, but said they would keep the firm’s headquarters Downtown.

“AMITA Health’s decision to relinquish the TIF allows the city to reallocate these funds toward other pressing priorities, and provides AMITA Health the necessary flexibility to make non-clinical staffing decisions at its Chicago headquarters,” Frey said.

It was not clear how accepting the TIF funds would have impacted AMITA Health’s staffing decisions.

Aldermen who supported the subsidy said it was necessary because Presence Health planned to open a cancer center on the West Side and neighborhood clinics in Calumet Heights, Belmont-Cragin, Avondale and West Town. TIFs are designed to improve blighted parts of the city.

Those clinics, in which Presence has invested $15 million, will operate as originally planned, even without the subsidy, Frey said.

The ACLU of Illinois, which opposed the subsidy, said public funds should not be used to discriminate against those seeking medical care.

“We welcome the news that Presence Health — now AMITA Health — will not be using taxpayer funding while it denies basic reproductive health care to women,” said Ameri Klafeta, a senior staff attorney for the ACLU.

Representatives for Emanuel and Reilly did not immediately respond to a request for comment from The Daily Line.

Frey’s statement made no mention of the fact that the Chicago Board of Ethics fined Ald. Ed Burke $2,000 earlier this month for exercising improper influence in the debate over the subsidy at a meeting of the Finance Committee.

The board determined that Burke, the chairman of the Finance Committee, violated Chicago’s Governmental Ethics Ordinance by “introducing witnesses, and answer[ing] procedural questions from his colleagues” during the Jan. 12 meeting of the committee, before announcing that he would recuse himself from the vote.

The Ethics Board voted 4-0 on April 26 “that this constituted participation,” even though Burke had informed ethics officials he intended to recuse from a matter involving Presence Health Care. His law firm represented Presence Health on unrelated matter within a year of the vote.

Klafter & Burke filed property tax appeals on behalf of one Presence Health property in 2016 and 2017, according to county property records first reported by WBEZ and the BGA.

The board fined Burke the maximum amount allowed under the ordinance.