Chicago City Wire

Tax Increment Financing (TIF) districts have played a significant role in Chicago’s approach to economic development. TIFs allow the city to allocate future increases in property tax revenue from specific areas toward public or private projects within those same districts, rather than directing those funds to general services such as schools and parks. This mechanism is intended to stimulate redevelopment, particularly in blighted neighborhoods.

As of 2023, there are 126 active TIF districts in Chicago, which collectively generated $1.07 billion last year—a record amount driven by higher property reassessments and increased values. The city’s cumulative unspent TIF fund balance has grown to over $1.5 billion. More than half of the revenue was used for debt service on previous developments, while the remainder funded new infrastructure projects including roads and sewers.

The Cortland/Chicago River TIF, also known as the Lincoln Yards Development, covers about 53 acres along the North Branch of the river near Bucktown, Wicker Park, and Lincoln Park. The plan envisions up to 14 million square feet of mixed-use development with around 6,000 housing units—20% of which are designated affordable—and 21 acres of public open space. The city committed over $490 million in TIF funding for infrastructure improvements, with developer Sterling Bay contributing nearly $300 million for parks and other enhancements.

Construction began around 2021 but has slowed due to economic challenges. Sterling Bay has since ceded part of the site to lender Bank OZK, and plans have shifted toward lower-density residential development. While some elements like life sciences buildings are moving forward, much of the original masterplan remains unrealized as of early 2025.

The LaSalle Central TIF district—also called the Central Loop or LaSalle Street TIF—collected approximately $175.5 million in tax revenue in 2021. In April this year, City Council approved $164 million from this district for converting office buildings into nearly 900 mixed-income apartments and commercial space as part of the "LaSalle Street Reimagined" initiative.

Fulton Market Innovation District (FMID), established as a TIF district in 1998 and updated in recent years to encourage mixed-use development north of Lake Street, spans about 217 acres on Chicago’s Near West Side. Major companies such as McDonald’s and Google have relocated their headquarters there; Guinness Brewery also opened its second U.S. location in Fulton Market. These moves have led to further investment and repurposing of old warehouses for new uses.

The article suggests that while some TIF districts have contributed positively by spurring redevelopment—particularly where private investment may not otherwise occur—their use outside truly blighted areas raises questions about priorities and corporate partnerships.

"There is no logical reason a school with 89 administrators and 74 students to receive a nickel," states the article regarding school funding through TIF revenues.

"A more modest plan to develop the area into parkland might have been a less costly and therefore better idea," it continues when discussing Lincoln Yards’ slow progress.

"There is no reason to partner up with private developers in this egregious example of corporate welfare," says another section criticizing use of funds in non-blighted areas.

Successes like Fulton Market are acknowledged: "Could this have happened without the TIFs? Perhaps it might have but probably not as quickly."

Overall grades assigned by the article include B for Fulton Market Innovation District, C for Lincoln Yards/Cortland-Chicago River TIF, and F for LaSalle Central Loop TIF district.