His plan is different than Mayor Lori Lightfoot’s vaunted Invest South/West effort, which Vallas called a “top down, transactionally oriented aspiration that remains undelivered.” What’s needed instead, he said, is a neighborhood-run process.
At the center of Vallas’ plan is his proposal to create an independent Community Development Authority that “would operate free from City Hall politics” but be funded by City Hall money.
The authority and the municipal bank that would fund its projects would get a guaranteed one-third cut of all city revenues from the proposed Chicago casino, taxes on sports betting and gaming revenues, and existing tax-increment financing districts. In a quick phone interview before his speech, Vallas said he can do that by moving money around even though, legally, TIF money generally must be spent in TIF districts and proceeds from the casino are required to go toward city pensions.
Vallas did not say why his bank would work better than former Mayor Rahm Emanuel’s infrastructure trust, which never really produced much, or how he could remove politics from development authority.
In any event, Vallas said the new agency would focus on small-business loans, home mortgages, industrial parks, social services and other neighborhood-directed projects, offering lower-cost financing than conventional banks do. The city’s balance sheet would end up in better shape, he said, because it would “capture the profit that private banks” now get through their lending.
Another emphasis would be on repurposing tens of thousands of city-owned vacant lots. The development authority could acquire title to such properties and offer property tax breaks, grants and other inducements to get them back in use.
Vallas said his plan will not result in gentrification. “Neighborhood revival should not result in neighborhood displacement,” he said. But he did not explain how development in long-neglected areas won’t inevitably make them more desirable and raise taxes.
The speech and plan did not touch on high commercial real estate vacancy rates in downtown Chicago and along North Michigan Avenue, subjects Vallas said he’ll continue to address in other venues.
Vallas began his speech by saying that controlling crime is a needed first step for any economic development. He said his plan “would quickly reorient a staffed-up and properly resourced, trained and supervised Chicago Police Department to true community-based policing.”