By ALAN J. ORTBALS
During his presidency, Franklin Roosevelt used the relatively new medium of radio to speak directly to the people. Most newspapers of that time were owned by his enemies and detractors, most notably, William Randolph Hearst, who slanted the news and disparaged his policies and initiatives in their editorials. Through these “fireside chats” Roosevelt was able to bypass the biased rhetoric of the print media and deliver the truth to the citizenry.
Similarly, we, at the Illinois Business Journal, began a special section on Tax Increment Financing in Southwestern Illinois five years ago so that cities could bypass the mainstream media and tell their stories to the business community. We did this because these media outlets were constantly bashing TIF, presenting very slanted views on this important program.
Because Southwestern Illinois is only about 25 percent of the metro area, most of the regional media is Missouri based. That is a problem when it comes to their reporting on TIF. The Missouri and Illinois TIF statutes are very similar but have one major difference. Both speak to blighted areas and require that the existence of blight must be evidenced by the presence of a list of about a dozen blight factors. Illinois cities need to show in detail how the proposed redevelopment area meets those criteria. Theoretically, Missouri cities do as well except that Missouri law contains a clause that overrides this blight factor list. If it is determined that a property is not being put to its highest and best use, it can be defined as blighted. What highest and best use actually means is that the property is more valuable as a shopping center or big box store than a subdivision or apartment complex.
Because of this highest and best use provision, properties that no one would look at and see blight can be qualified. And so, the primary use of TIF on the other side of the river has been to promote retail developments often at the expense of one city for another but almost always to the detriment of other retailers. See, for example, what’s happened to Chesterfield Mall since the creation of a TIF district to develop two outlet malls further west.
Such things don’t generally happen in Illinois because we don’t have that trump card of highest and best use in the deck. But the Missouri-based media doesn’t differentiate between the two so we find ourselves tarred with the same brush.
Illinois media gets into the act, too, because it’s easy to bash something you don’t understand and it makes for more sensational headlines. But there’s a real consequence to all of this and that is that legislators consume that media output the same as their constituents and at some point come to the conclusion that something needs to be done to right these perceived wrongs.
That’s occurring now as the Illinois House Revenue and Finance Committee is currently considering significant changes to the TIF Act which will limit its effectiveness and tie cities’ hands on the creation of new districts or the amendment of existing ones. If this bill, HB 570, is passed into law, it will be to the detriment of Illinois cities and that’s why the Illinois Municipal League is fighting it.
People don’t realize it but TIF is the reason Belleville has such a vibrant downtown; why Gateway Motorsports Park exists; why U.S. Steel wasn’t shut down decades ago; why hundreds of people go to work every day at American Steel Foundries; or why nearly a thousand people work in what used to be a dilapidated, environmentally contaminated building in the Alton Center Business Park.
It used to be that cities relied on state or federal government for grants to remediate blight. It’s part of the reason that cities suffered through rise and fall cycles. Many of those programs no longer exist and that’s for the better. Cities have become good at partnering with the private sector and the private sector has gotten accustomed to working with government. We’re all better off when our cities do well. It’s important that they have the tools they need to get the job done.