Monday, August 6, 2012

Outside Agit Prop Makes Confused Arguments About Local Hotel


-posted by chicago pop

All politics, it has been said, is local. It can even be micro-local, so much so that the framework used for understanding what goes on at one level in Chicago doesn't necessarily translate to another level. 

That appears to be the case here. Once again, a hotel project, supported by a number of non-profit local institutions (the University of Chicago, the Museum of Science and Industry), representing the kind of expanded commercial opportunities that a majority of the neighborhood's residents have repeatedly said they want, has been targeted by interests not directly concerned with the neighborhood for use in their own ideological conflict.

Fortunately, they will lose. The hotel, which Hyde Park needs and wants - regardless of conspiracy theories centered on Penny Pritzker - will be built. Said interests will conduct their next skirmish elsewhere.

The hash of an argument presented in the flyer above, although it builds on a handful of genuine concerns, opportunistically mashes them together and forces them to conform to the Procrustean bed of the Occupation Movement's rhetoric. Even more basic, its factual allegations are annoyingly flimsy enough for us to take a few precious moments of our evening to dissect them. 

Were it the summary of a doctoral proposal, we would send its fervent grad student author back to the stacks.

What seems to have triggered this mobilization is the Chicago City Council's decision last month to grant a further subsidy the the Harper Court project of $5.2 million, drawn from the City's amorphous general TIF fund. This was not the first city subsidy, but it was the first since the financial crisis and the emergence of Occupy Chicago. 

What is clear above all is that the creators of this flyer don't like TIFs. TIFs freeze the property tax revenue going to various local taxing bodies, such as school districts, at the level they are at when the TIF is created. Subsequent tax revenue stemming from rising property values associated with a project are used to reinvest in the district, or to pay off the loans raised to pay for it. 

So the $5,200,000 'siphoned' away from the CPS and other municipal services would most likely not have spontaneously materialized had TIFs not existed in the first place, because in many cases (like that of Hyde Park), property values are relatively stagnant and the market is inactive. 

That's not good for school districts, because it keeps property tax revenues down. A hotel hasn't been built in Hyde Park in over 50 years. Growth in local property values has trailed Chicago average by 33%. 51% of existing structures in the district have been cited for code violations. (see p.3, here). Those are the kinds of conditions that can easily tip into a downward spiral of urban disinvestment - and THAT is what sinks local school districts.

More fundamentally, the flyer presumes that the problem of failing urban schools is a dearth of cash. This is deeply questionable. There are many factors going into the failure of inner-city schools, chief among them being the concentration of impoverished families in given school districts. The whole point of court-ordered desegregation policies after Brown vs. the Board of Education was to remedy this demographic imbalance. Throwing money at existing imbalances doesn't solve the problem bequeathed by segregation.

Another reason schools on the South Side are failing is because parents realize they are failing and move away. The result is under-enrolled local schools, like the one in my district. CPS runs a large number of failing schools for only a few hundred students, and this serves neither the students nor the taxpayers. Closing schools to consolidate districts, especially when those schools are underperforming, is by no means a tragedy: it's not that different from certain situations that arose under the system of court-ordered busing.

So when the flyer goes on to suggest that '7 schools from the neighborhood are scheduled to be defunded', it's misleading to suggest that the $5,200,000 could save them if it weren't going to some useless, fru-fru project like a hotel in Hyde Park, the only economic hub in the vast South Side of Chicago. That cash alone won't alter the concentration of poverty in school districts, increase parental involvement in or the valuing of children's education in those same districts, or necessarily improve the instruction they receive from their teachers. It's a simplistic, even spurious linkage.

Theoretically, you could abolish TIF districts and tax the rich all you like, but you're not going to fix the problem that way. 

The more cartoonish aspect of this flyer, however, is the attempt to paint the hotel project as a white elephant resulting from the Pharaoh paying a favor to a nefarious Machine operative, Penny Pritzker, who, from her position on the School Board, acts to divert millions from reinvestment in schools and towards her own business (which her family no longer privately controls) . 

First of all, it was the City Council that decided to funnel this $5,200,000 to the Hyde Park Hyatt, not Penny Pritzker, and not the Chicago School Board. Pritzker had little to do with it. The University of Chicago, as locals know, has been trying to get a hotel built in the neighborhood for half a decade or more, and would have taken a Marriott had not that plan been sabotaged by a truly myopic minority. The City Department of Planning and Development, together with the previous and present 4th Ward Aldermen - neither of them toadies to this or the previous Mayor - have supported the development of 53rd Street as a net benefit to the neighborhood and, by extension, the South Side of Chicago. Nothing in this document provides any reason why this should not be so.

Arguing that the entire project is simply a product of cronyism, a white elephant stemming from a politician's favor to a tycoon, ignores the local history of disinvestment, ignores the dynamics of urban economies, ignores the repeated surveys expressing preferences for expanded local retail opportunities, and above all, ignores the fundamental benefits a hotel would bring to the area -- stabilizing South Side neighborhoods by providing more jobs for workers, more business for local merchants, and a more attractive quality of life for taxpaying families who might decide to move here and commit to local school districts.

So it looks like the Penny Pritzker connection will be a "Gotcha!" one only for weak minds, and for those more concerned to squeeze local particularities into a ready-made ideological template of 99 vs. 1%.
There is undoubtedly a time and a place for that template. But it is not here.

25 comments:

David Farley said...

OMG - somebody's not being nice to a developer. Hyde Park Progress to the rescue! This article from the Reader explains it better.
http://www.chicagoreader.com/chicago/mayor-emanuel-taps-shrinking-tif-funds/Content?oid=6984977

Hyde Park Matt said...

It is a shame that this outside protest group decided to enter the TIF debate now. Had they been involved at all in the numerous Harper Court TIF planning meetings that were open to the public for over half a decade, they would have not made these ill-conceived, conspiracy theory arguments. Harper Court will be finished soon; it is already providing good jobs for people who really need them, with all construction contracts going to union and/or minority contractors. The completed project will be transformative in increasing tax revenue, along with greatly improving the economy and stability of the south side over the long haul. If you don't like the extra money going to help construct the hotel structure, or fund the redevelopment of 53rd street and Harper Court, talk to your alderman, but please don't bash a great redevelopment project that will greatly benefit our neighborhood for decades to come. The problem with our failing city schools doesn’t have anything to do with the TIF money, but rather a much larger set of socio-economic and budgetary factors that are way too complex to be solved by investing an additional $5 million dollars out of the TIF fund. Please don’t try to falsely tie the construction of this important redevelopment to the complete and total failure of our city and community to do a better job educating our city’s kids. The problem with our schools didn’t happen overnight and has absolutely nothing to do with the use of additional TIF funds to help build the hotel structure.

McFuzz said...

Hi Matt, your post has some inaccuracies. We did speak with Alderman Burns, and in fact one of our members from Hyde Park who spoke with him was also at the public TIF meetings you mention.

However, those meetings were a lie and a sham. As Ald Burns admitted, this deal is a 10 year plan from the U of C. In the public meetings you were already told what it would be, and asked only how it should look, and then largely ignored anyway.

Check the Hyde Park Herald editorial from Aug 1st for more on that: http://www.hpherald.com/pg4.html (once the new paper goes live the link will no longer direct to the same place and you'll need to navigate there to the Aug 1st paper).

Quite frankly, you don't know what the problem with our failing schools is. TIFs steal $500 million a year from property taxes that otherwise would mostly go to schools. In Chicago this year, $250 million was lost from the CPS budget this way. No one is talking about adding more money to TIF funds. We need to END ALL TIFs, and get an ELECTED REPRESENTATIVE SCHOOL BOARD!

You are misguided, but that's okay.

Peter F. said...

Perhaps I have a "feeble mind," but I fail to understand why Hyatt would be incapable of building the hotel the author of this article so desperately wants without a $5 million subsidy from Chicago taxpayers. This is a company that posted a profit of over $100 million in 2010!

As for the cynical argument that "throwing money" at failing schools won't improve them, I wonder what the very erudite readers of this blog think about the well-documented relationship between smaller class sizes and better educational outcomes. Does hiring more teachers constitute unproductive "money throwing" in the minds of these intrepid educational reformers?

I for one won't pretend to be so clairvoyant as to predict what property values would have been in the counter-factual scenario about which the author speculates. (Imagine: a world without TIFs--the mayor might have to propose a transparent budget!) Nonetheless, it seems crystal clear to me that when the mayor's office claims the city doesn't have the money to hire more teachers and pay them raises (or keep our public libraries adequately staffed for that matter), this is precisely the time when we should suspend lucrative public subsidies to well-funded private entities like Hyatt and the U of C. I suspect that $5 million could hire more teachers, librarians, and school support staff than the 15 full-time hotel jobs Hyatt claims it will create.

Stavroula Harissis said...

"More fundamentally, the flyer presumes that the problem of failing urban schools is a dearth of cash."

When the city lays off teachers, shuts down schools, eliminates curriculum, increases class sizes, slacks on maintenance of buildings, fails to provide libraries in schools, fails to provide adequate support staff like nurses and counselors in schools, etc. all because there's "not enough money" in the budget, then YES, a "dearth of cash" is one of the main problems facing failing urban schools.

And, conveniently, it's the neighborhood schools in poor and minority communities that get the brunt of all these budget cuts. So THAT is how the segregation is reinforced--by driving out those who can afford to move to a better school district and leaving the rest in severely underfunded schools who subsequently get blamed for their failures which are actually a DIRECT RESULT of targeted underfunding and the push for privatized, selective enrollment schools with inequality directly built into their structure. So your circular argument that "Another reason schools on the South Side are failing is because parents realize they are failing and move away" actually proves the point that not investing properly in struggling schools only perpetuates the problem.

Greg said...

None of you has explained how spending more money on schools will improve education. What does Chicago currently spend per student compared to other public schools around the country? The only logical argument that could be made here is that we spend less than other schools, but I've seen no evidence of that. And I see no reason to make unsupported claims about political favors and try to close down a project that almost everyone wanted just because our public schools here suck.

Hyde Park Matt said...

One can argue for reforming our schools, property taxes and current TIF system without having to badmouth or single out this redevelopment project. Let's try not to forget or downplay the beneficial economic impact it will have on Hyde Park and the rest of the south side community for generations to come. When was the last time that something this beneficial to our community got built? 50 years ago? 100 years ago? Many years have gone into the planning of this project and into making it happen. Just because one group is frustrated with the TIF structure that exists throughout our city, doesn't mean you should direct your frustrations at a legitimate and benefical construction project. Take your frustrations out on the mayor or aldermen. Get petitions signed that advocate for your plan to reform our education and TIF system, but don't attack a project that will do a lot of good for our neighborhood and its residents.

chicago pop said...

Throwing money at failing schools - which is how I interpret the general claim that $5.2 million for what is widely considered in this neighborhood to be a worthy and beneficial project can somehow 'fix' failing schools - won't improve them because, in cynical fashion, it leaves the foundations of urban racial segregation unchanged.

As stated in the original essay, funding alone won't correct the imbalances created by concentrated poverty. As radical as some of the above statements style themselves, with the abolition of TIFs and selective enrollment CPS schools, they really are not that radical at all in the sense that they leave the geography of urban education unchanged, and offer little on the specifics of how this money would change things. More teachers? Show me the numbers on how that would work. Painting buildings and hiring counselors? Who could say no? But show me the research tying that to improved test scores. Meanwhile, people who have actually researched the problem call for more affordable housing and mobility programs. Either of those would make a lot more difference than tanking this project and painting buildings in neighborhoods with high rates of male incarceration and youth unemployment.

The most underperforming schools in the CPS are concentrated in the poorest minority districts. Hiring more teachers has some beneficial effects on learning outcomes, but only when it gets to under 17 students per teacher, and this is still going against all the structural disadvantages presented by racial segregation. In fact, the most powerful demonstrated factor in educational outcomes is the quality of the teacher. That's hard to purchase outright. All of the sorry conditions listed by Stavroula are indeed lamentable, but she provides no evidence that they correlate with educational outcomes. The University of Chicago, which has set up and funded four charter schools around Hyde Park, has not yet, with all the wizardry of the most current research and resources, been able to raise its performance outcomes much higher there than in the surrounding public schools. The students are primarily low-income African-American. This strongly suggests that investing in school plant alone won't change that. This conclusion is supported by a number of experts on urban poverty: see Douglas Massey and Gary (and Myron) Orfield.

It might be of interest to our modest reader Peter F., like McFuzz an outsider and therefore unaware that a hotel in Hyde Park is widely welcomed (and that the Hyde Park Herald does not represent a consensus of neighborhood opinion), that these relationships of cause and effect concerning failing schools and racial segregation were explicitly recognized decades ago in the landmark Gautraux civil rights case, which ruled in favor of busing poor minority students *out of* distressed neighborhoods. Curiously, none of the avowedly radical proposals of our friendly readers mentions this; when Mitt Romney recently stated that kids should be to go to school "wherever they want", he came, most likely without knowing it, quite close to the truth. Poor minority kids bused to high performing suburban schools did better academically in a very short time.

Keeping them in place, however, and throwing money at their schools is the cynical - and fiscally misguided - policy, the one adopted in lieu of a serious nationwide attempt at desegregation.

Beyond this question of public school performance, Hyde Park Matt has it quite right when he emphasizes the long-term benefits of this project to the families of future CPS children in this neighborhood. The South Side is underpopulated, underemployed, the tax base is lower than the North Side, there is a lack of basic commercial services. This hotel and the associated development on 53rd will help correct all of these problems - while generating tax revenue for the CPS.

Fix TIF problems, reform CPS. But making this particular project a symbol for an ideological conflict between Rahm and the CTU is out of place.

Peter F. said...

Greg, since you didn't understand what I "has explained" in my last comment, let me break it down in an easy to read diagram:

More $ -> more teachers -> smaller classes -> better education

I'm not saying this is a silver bullet to fix all the problems with CPS. Obviously you have to train, support, and provide new teachers with high-quality materials and conducive learning environments for them to be effective. Still, reducing class sizes is one of the most reliable ways of improving educational outcomes.

But you don't even need to read educational research to think that more teachers is a better use of tax money than boosting Hyatt's profits. Just look at what the best private schools in the area do. Maybe you've heard of New Trier Township High School, Rahm's alma mater? They throw lots of money at their teachers, spending more than $16,000 per student in 2006 compared with the $13,000 per student CPS spent in 2010 (the lag in the stats probably makes this gap look smaller than it is in reality). What does New Trier get with this extra money they spend on their students? They definitely get more teachers per student: one teacher for every 14 students, compared with only one for every 24.6 CPS high schoolers. Is it really such a mystery why the elite private schools do better?

And to Matt's concern ("but what about the hotel?!"), I say by all means let Hyatt move in. But if it makes economic sense for them to open a hotel here then they should invest their own money to do so. And if it doesn't make sense for them to do so unless they are richly subsidized by taxpayers, then they shouldn't bother. Entice them with your business, not my tax money.

Stavroula Harissis said...

We're not against this development itself--we're against it being subsidized by the struggling taxpayers, especially considering that the Hyatt corporation has PLENTY of money to fund this project itself and especially considering the city's financial issues that have lead to drastic cuts in social services. Why should ANY public money be given to the flourishing private sector when the public sector is suffering so badly? It's blatant welfare for the rich and it's appalling.

We've tried talking to the Mayor and the Alderman and the various board members about these issues, but they won't listen. So we have planned this action to raise public awareness of what TIF funds are, how they are being used, and how this is hurting our communities, specifically with regards to public education, which is being defunded at the same time that lucrative private corporations are receiving handouts.

David Farley said...

Not one penny of TIF money should be going to these frou-frou projects in affluent neighborhoods like Hyde Park, no matter how many cheerleaders they have. Oh look, here's Antheus now with their hand out looking for their cut, or we won't get a Whole Foods.

Peter F. said...

Chicago Pop, I've lived less than two blocks from Harper Court for about 6 years and lived in the neighborhood for almost 9 years. But because I oppose corporate welfare you call me an "outsider?" Is there a minimum residency that's necessary to be considered an "insider," or is this just a facile way or discrediting anyone who disagrees with you by suggesting they don't have the right to have an opinion on the matter?

chicago pop said...

HPP officially recognizes Peter F.'s 'insider' status and regrets having mistakenly labeled him an 'outsider'.

chicago pop said...

Reviewing the discussion up to this point, I want to hit the three points I think this debate comes down to, and where I stand on each. No. 3 may surprise the readers of this thread.

1) Spending alone will not solve the problem of scholastic outcomes in inner city schools. There is quite a lot of research to back this up. There are other worthy things that could be done with lots of money in the CPS, but very few of them lead automatically to better educated students.

2) A hotel and the various enterprises that would go with it would be net benefits to the economy of Hyde Park, which is a regional hub for the entire south side of Chicago. The project is desirable in and of itself for that reason.

3) Critics of the $5.2 million TIF subsidy to the hotel developers have a point that the subsidy is probably not financially necessary for Hyatt, nor appropriate at this point in time given the City's strapped finances. The same applies to Antheus.

Kelvin said...

Ironic how the author is dismissing legitimate claims by slapping the label of outsider on this demonstration. The vast majority of the organizers in fact live in hyde park and have been part every single one of the sham public TIF meetings to voice their concerns.

Student Surge said...

As a graduate student I have to disagree that, “Were [this flyer] the summary of a doctoral proposal, we would send its fervent grad student author back to the stacks.” Although the concept might frighten off certain individuals the event is in response to the people of Chicago’s fight for public education and all the things that come in the way of funding our public schools. TIFFs are one problem of many that the CTSC has been focusing its efforts on.
This posting’s main claim that, “the $5,200,000 'siphoned' away from the CPS and other municipal services would most likely not have spontaneously materialized had TIFs not existed in the first place” is the flimsy fabrication, because even if property values are ‘stagnant’ like they claim, it still doesn’t take into account that the type of TIFF paying for the hotel stipulated that the Hyatt would not be paying property taxes for the next ten years . That fact is what equals the millions of dollars the public schools in the area are losing. This coupled with an already squeezed CPS budget that is leaving the seven surrounding schools in this neighborhood with over three million dollars in cuts, spells further ruin for the public schools.
To add insult to injury this article claims that the failure of inner city schools is largely because of, “the concentration of impoverished families in given school districts.” This information is totally fabricated; public schools exist in neighborhoods all over the city, not just impoverished ones. The reason it looks as if they only exist in impoverished communities is because anyone with any money moves their child out of the public school system. This is not the failing of the individuals who want to provide their children with a better education, but a failing of Chicago’s budget to provide adequate public education. This TIFF action on Wednesday gives an example of money that could be used for public schools being used to build a hotel. It also provides a forum for parents, students, teachers, and community members to stand up and say that it is unacceptable to use this money for anything except the public schools that so desperately need it.

Stavroula Harissis said...

So we agree then!

1.) We agree that "spending alone will not solve the problem of scholastic outcomes in inner city schools." That doesn't change the fact that underfunding schools is *a* problem. Adequate funding is just the starting point but very little can be done without it. In fact, the CTU has an entire document about how it believes public education in Chicago can and should be improved: http://www.ctunet.com/blog/text/SCSD_Report-02-16-2012-1.pdf.

2.) Yes, a development project like Harper Court is desirable for the revenue and jobs it can create. Again, we are not opposed to the development, we are opposed to how it is being funded.

3.) Now you get it!

In conclusion (to reiterate): Nowhere do we state that construction of the project should cease. WE ARE NOT OPPOSED TO THE DEVELOPMENT ITSELF, WE ARE OPPOSED TO IT BEING SUBSIDIZED BY TAXPAYERS' MONEY.

BobS said...

Hyatt Hotels has a terrible safety record for its housekeepers and has been abusive to its employees, especially those who have criticized its labor practices or who have been union activists.

Hyatt Hotels has also outsourced jobs to low paying contractors who provide no benefits. Will Hyde Park Progress and its allies work with the UNITE HERE union to make sure the people hired for these hotel jobs are well compensated and well treated?

Hyde Park is an affluent community and public money is going toward this project. I don't think worker justice is too much to ask for.

Bob Simpson

Lilithcat said...

@ chicago pop -

Minor correction. The Gautreux litigation was about housing, not busing. You're thinking of Swann vs. Charlotte-Mecklenburg Board of Education.

skashby said...

It's amazing, isn't it, that we always hear that money isn't the problem with public schools -- it doesn't matter whether there's a full time nurse in a school. Or a full time social worker. Or a library (160 CPS schools don't have one.) Or new textbooks. Or enough teachers so no class has more than 25 students.

But wait -- the billionaires and politicians (like our Mayor) sent their kids to well-funded schools that have all these things. So it *does* seem to matter to them.

How can it be, in 2012, that we're still hearing defenders of the billionaires, demanding they get more tax cuts, TIFs, tax abatements, and corporate welfare?

We have the biggest income gap in 80 years. The rich have never been richer. But somehow there are still people that demand we give the billionaires more. It boggles the mind.

BobS said...

This is a familiar Chicago story. Public money going to whiter more affluent neighborhoods instead of where it's really needed.

The Windy City has been stuck in that rut for decades.

Greg said...

Good times. I still see no cited evidence showing that throwing money at schools improves education. Repeating your claims in a louder voice and throwing in ad hominems doesn't make you right. What's wrong Occupiers, is it too hot out to bang drums in front of Bank of America this summer?

And I love seeing mention of UNITE HERE, the idiots who rolled in and helped the NIMBYS get the Marriott project shut down. It's ironic that people are criticizing these projects as "public money going to whiter, more affluent neighborhoods" when both hotel projects will mean or would have meant jobs. You know, jobs that are desperately needed and can easily be filled by people from one of the crushingly poor surrounding neighborhoods.

This isn't about creating jobs for poor people, it's about creating jobs for members of the UNITE HERE union and leaving everyone else out. Union thuggery disguised as a crusade for the poor. You folks should be ashamed of yourselves.

chicago pop said...

I'm going to close this one down to further comments, unless anyone wants to discuss these issues on the basis of data they can share and that is new or factual cases that support their claims. Such contributions on the mechanics of TIFs nationwide and in Chicago would be especially useful - we'll be exploring that topic in subsequent posts. Otherwise, I think everyone has made their point this time around.

Hyde Park Matt said...

"Activists have been especially incensed by the 53rd Street TIF because Pritzker’s family owns Hyatt Hotels.

At the end of the July board meeting, Pritzker, aware of the controversy, noted that “neither I nor Hyatt received any TIF money.”

According to the 53rd Street TIF plan, $5.2 million is going to Hyatt Place’s developer: Smart Hotels LLC and Olympia Companies, which specialize in building hotels linked to universities, in this case the University of Chicago.

The entire hotel complex, with a fitness center and restaurants, will cost $28.5 million to build.

The hotel “will be operated by The Olympia Companies as a Hyatt Place hotel under a franchise agreement with an affiliate of Hyatt.

Hyatt does not own any stake in the hotel or the project,” said Farley Kern, vice president of corporate communications at Hyatt."

Source: Catalyst Chicago -
http://www.catalyst-chicago.org/notebook/2012/08/07/20318/record-tifs-and-schools

tayiah said...

Its not fair to ask single people and people who already spend much money sending their kids to private schools. CPS has no right to ask taxpayers to cough up more money. The more they get the more they want. Also there is going to be increased taxes coming down the pipeline form the state and federal government. CPS has increased its spending per pupil pupil since the 90's and their hasn't been much improvement in graduation rates, test scores,etc. There hasn't been a correlation between increased spending and better student preformance. The catholic schools in this city many who educate poor children spend less and get better results.

Yes the north shore spends more per pupil at their schools, but the pupils parents are paying for their childs education while most of CPS parents aren't. Also they have more bells and whistles at their schools like a coffe bar in the cafeteria, olympic swimming pool etc.