A non-binding resolution approved by the City Council’s Committee on Economic, Capital and Technological Development Friday will remove tax incentives from companies that are found to be “dishonest actors who have caused economic and environmental harm,” said Ald. Mike Rodriguez (22).
The resolution is a response to an April incident in Little Village where Hilco Redevelopment Partners demolished a smokestack at the century-old Crawford Power station, which sent blankets of dust over several blocks in the neighborhood. The company was fined for a total of $68,000, but many City Council members say the company deserves to have its tax breaks rescinded due to the environmental damage caused by the implosion.
Last month, Illinois Attorney General Kwame Raoul announced a lawsuit against the company, along with MCM Management Corp and Controlled Demolition, alleging air pollution violations.
The City Council last year granted Hilco nearly $20 million in property tax breaks for the project, lowering its assessments for 12 years. The company plans to redevelop the site into a 1-million-square-foot warehouse distribution center.
Local activists, including the Little Village Environmental Justice Organization, want Hilco to abandon the project. They are also calling on Mayor Lori Lightfoot to rescind the promised tax subsidies.
Greg LeRoy, executive director for Good Jobs First, a non-profit research group promoting accountability in economic development, testified that the safeguards enshrined in the Hilco development were inadequate.
“The concept of attaching safeguards … is really considered best practice in this profession” because they “add fallback and guaranteed provisions” should the developer fail to deliver their end of the contract, LeRoy said. He added that most cities are pushing developers to add community benefit agreements “to maximize the benefits for incumbent local residents such as hiring, affordable housing” and other safeguards for residents living within immediate reach of the developments.
LeRoy added that for the city to hand out tax breaks without accountability “doesn’t make sense” in the long run.
“Giving a company tax breaks is a privilege … it costs communities a lot of revenue that is desperately needed now to address the pandemic,” he said. “Leaders have every right to hold corporations to high standards for community benefits. Reforms happen during moments like this.”
The plan passed the committee and will be considered at Wednesday’s full City Council meeting.
Ald. Gilbert Villegas (36), who chairs the committee, said he supported the resolution. He added that the Hilco situation should be a reminder to other developers aiming to build in the city. “We want to make sure that everything they are proposing in the initial project is actually carried out in the life of the incentive, so we will be working closely to do that,” he said.
Reparations resolution passes
Also on Friday, the council’s Committee on Health and Human Relations met to approve an amended resolution (SR2019-694) sponsored by Ald. Roderick Sawyer (6) calling on the city to explore potential reparations for black Chicagoans.
Sawyer said he had “worked extensively” with Lightfoot’s administration to tweak the resolution so that it would task a “subcommittee” under Sawyer’s direction to “continue to push the discussion” on reparations. The original resolution had called to create an independent commission that would report annually to the council.
Asked by Ald. James Cappleman (46) whether the change would diminish the power of the study, Sawyer said the subcommittee “will all the teeth that we want it to have.”
The health and human relations committee had already voted to approve the resolution on June 5, but the group encountered “technical problems” with the stream, said Sawyer, who chairs the committee. He added that he scheduled another vote for Friday “out of an abundance of caution and transparency.”