Open Letter to the Aldermen - Response to the August 8th Attacks by Richard Irvin
Updated: Sep 26
I wanted to respond to Mayor Irvin’s August 8th, misleading talking points on TIF’s and taxes. I will begin by asking, “why should the Aurora taxpayers be giving lucrative subsidies to developers who just happen to donate to the mayor?”
During the August 8th City Council Meeting, Mayor Irvin, Alderman Franco and Alderwoman Patty Smith suggested that the TIF 101 community meeting that I held on August 6th included “misinformation."
THE TRUTH ON IRVIN’S PAY-TO-PLAY:
On August 8th Mayor Irvin says that everything he does is “perfectly legal.”
You are going to have to decide for yourselves on this point. I see clearly how developers who donate to the mayor get more lucrative development deals. During the TIF 101 meeting that I held on August 6th, I used slides that showed two development projects similar in size and scope to the River Vine TIF. The Mews Apartment complex in Ward 5 received no city incentives, and the developer did not make any donations. The Redwood development in the 6th Ward showed the same thing – no incentives, no donations, just a simple development project.
During the TIF 101 meeting that I held I also showed two downtown developments that are incredibly lucrative for the developers. Both developers, JH Realtors and Windfall Group, have donated heavily to Irvin’s political campaigns. The slides tell the story.
In the case of the Hobbs building the developer was given nearly as much in incentives ($11,270,016) as the project cost ($12,977,512). The taxpayers funded 87% of this project. Furthermore, Hobbs faced countless delays and the $12.9M was also supposed to cover the rehabilitation of the first floor of the building, but that never happened.
Then, to complete the first floor of Hobbs, JH Realtors came back to the city in March of 2023, seeking another $1M subsidy and $1.3M non-forgivable loan with interest. The three restaurants were supposed to be started by June 2023, but nothing has happened yet. The theme that we see with developers is the constant, "oh, we ran out of money, and we need more money for the taxpayers to complete the project."
The Hobbs TIF gives Harish 80% of the revenue that is diverted from the taxing bodies and into the TIF fund. Conservative estimates put that at $3.6M in funds. You can find it in Exhibit E, Page 2 of the RDA.
Exhibit E, Page 8 of the RDA demonstrates that Harish is set to make a handsom profit off of a building that the taxpayers funded almost 87% of the construction costs. Conservative estimates that do not assume an increase in the cost of apartment rentals show $14.6 Million in rental revenues over the course of 23 years. I did not estimate for increased rental income due to inflation and I do not have the actual cost of the remodel. All of the numbers I use come from the actual development agreements.
Overall, it sure looks like a pretty sweet deal. The taxpayers cover the cost to rehab the building and the new owner makes millions off of his "investment."
Some people might be wondering, "how do I get myself a sweet deal like this?" Well, turn to the next slide and you will get a pretty clear idea on how you might go about getting such a deal. All of this research can be duplicated by going to the Illinois State Board of Elections and looking through the D2's (the quarterly financial reports made to the Illinois State Board of Elections). You will have to look at Richard's D2's and one of his political PAC's "Build R Future" to find these donations.
The August 8th political attack preceded a hearing on the River Vine TIF. This is a lucrative deal for a 190-unit apartment building along the Fox River in an area that is hardly blighted. During the hearing I argued that the recent multi-million-dollar improvements like the walk bridge and Wilder Park make the area attractive to investment without incentives. Additionally, this area qualifies for a number of other federal incentives that were discussed at the initial finance meeting in February 2023. It won't shock you that the developer, Eddie Ni, his lawyer, his family members and business associates have all made healthy donations.
$The River Vine TIF area will generate roughly $31 million over the course of 20 years, and the Redevelopment Project Agreement called for giving Ni $6.6 million and another $2 million in free land.
The TIF area passed in September, but rumors are already swirling that Eddie Ni came back to the city seeking more money to fund the project. Apparently, Eddie Ni is talking about pulling out of the project. This is good news from my perspective of those who want to see the beautiful Fox River stay open for the public.
We know that Eddie Ni is no different from any other developer who is looking to take as much of the public’s money as he can for his private development project. There is no “gap” as Mr. Dibo (Aurora’s Economic Development Director) has described it. This is just another guy trying to get the taxpayers to fund his for-profit business. River Vine is another incredibly lucrative construction project that, if it moves forward, will cost the taxpayers way more than the $8.8 million in upfront funding.
THE TRUTH ABOUT THE “PRESSURE” COUNCIL RECEIVES FROM MAYOR IRVIN:
Mayor Irvin said that I accused him of “pressuring the other council members to vote against their conscience.” This allegation is pure spin.
I was asked by an audience member at the August 6th TIF 101 meeting why the other council members voted for the endless corporate handouts. I simply said, “there is a lot of pressure.” I described to them how MOCA uses propagandistic videos to paint a one-sided narrative before these votes. In answering the audience question.
I used the $200,000 handout to Amore Meo, and the video and narrative employed by the economic development team that night as an example. I describe it as a “propaganda video” because staff conveniently left out the $50,000 city incentives for Altiro from Invest Aurora in 2020, or the initial $100,000 in city incentives and $36,000 in free rent in 2019, or the PPP funding that they received to help them stay open during COVID.
Source TIF District 1 2020 Report, Page 2 AND Source Invest Aurora 990 Report from 2020:
I cannot change how other council members will respond to these tactics. But I will not succumb to the pressure, propaganda, and one-sided narrative given by the mayor as he continues to heavily subsidize businesses with taxpayer money.
THE TRUTH – OTHER PUBLIC BODIES ARE USING THE SAME NARRATIVE THAT I AM - TIFS ARE A BACKDOOR PROPERTY TAX INCREASE:
During the August 8th meeting Irvin, Smith and Frano all suggested that I was just not well informed on TIF’s.
Specifically, Alderman Franco said “we’re not taking money away. That’s just the wrong narrative. I take umbrage with that because we keep saying that, but it’s definitely not true. We have the experts here who are gonna tell ya it’s not true so I don’t know why we keep talking about it. That needs to be shelved because we’re not taking money away from anybody.”
I am not alone in understanding the convincing math that demonstrates how TIF’s divert money from our public schools, libraries, parks and even our own general revenue fund because it is true.
Those opposing the Arlington Heights/Bears TIF are saying the exact same thing that I am saying:
“Under a TIF arrangement, property taxes above a certain amount would go toward the NFL team’s mixed-use project instead of the local Palatine Township Elementary District, and school officials are already rallying against any such proposal”
The District 15 Superintendent Laurie Heinz said at a recent community meeting. “If the taxpayer money is diverted away from the school, Heinz says the district will need to seek financial assistance from elsewhere to finance school expansions made necessary partly by the growth the Bears plans would bring.”
Source: Arlington School District Speaks Out Against Bears TIF District (therealdeal.com)
These are also the same arguments being made by District 204 School board members and staff who opposed Aurora’s Ogden & 75th Street TIF. District 204 school board officials seem to know that TIF’s defund schools.
According to a Feb. 14, 2020 Beacon Newspaper article, “The school district (District 204) has taken the viewpoint that there should be no more TIF districts.”
During the discussion at the Sept. 12th City Council meeting and this article both mention a potential lawsuit from District 204. The only school district putting up any sort of opposition to TIF’s so far has been District 204, which is why we need better TIF education in Aurora.
ADDITIONALLY, TIFS ARE A BACKDOOR PROPERTY TAX INCREASE:
Part of the administration's narrative is that TIF’s somehow lower property taxes. This claim is also false. There is a reason that they call a TIF a backdoor property tax increase.
When a developer is not paying their full property tax bill for 20 or 23 years, someone has to pay for all the increased tax burden. Anytime you add more people and more cars there is a need to grow city services – more police and fire, more infrastructure and traffic control devices, more teachers and classroom expansion.
When a school district or even the city of Aurora does not see those tax dollars from the developer, the rest of us have to pay more. During this period of inflation and increased property values, you can bet that every taxing body is going to be voting to capture as much of the increased EAV as they can get their hands on. Your taxes will go up.
With all of the money that we have put forward, underwriting loans, giving financial subsidies for restaurants and hair salons, and financing upfront development costs – all of this money has to come from somewhere. So, it will be coming from the hardworking Aurora taxpayers.
So, when the council voted to approve these new TIF districts, it almost guarantees they will also be approving future tax hikes.
The mayor spins Aurora property tax rates as some sort of property tax decrease. I’ve talked to a lot of voters in our city over the last year and not one has told me that their taxes have decreased. Instead, the opposite is true. Taxes have gone up. Spin won’t win when reality sets in.
Sincerely,
John Laesch
Alderman-at-Large, City of Aurora