34th Ward Ald. Bill Conway is pictured during a City Council meeting in October 2023. [Don Vincent/The Daily Line]

The City Council Committee on Finance postponed a vote on Mayor Brandon Johnson’s $1.25 billion Housing and Economic Development Bond proposal after more than a dozen alderpeople expressed interest in significantly reducing the bond authorization amount and lowering the threshold to require aldermanic approval for bond-financed projects.

The finance committee was recessed until 9:15 a.m. Wednesday morning, and Ald. Pat Dowell (3), the finance chair, said a vote on the bond ordinance could happen if committee members come to an agreement.

The ordinance would authorize the city to issue $1.25 billion in general obligation and Sales Tax Securitization Corporation bonds over five years, divide the proceeds evenly and distribute $625 million each to the Department of Housing and Department of Planning and Development to spend on existing housing, cultural and economic development programs.  

The housing department would use the funds for affordable rental housing, homelessness prevention and increasing homeownership opportunities. The planning department would put its funds into community development grants, small business loans and workforce development.  

Bonds would be issued gradually as costs and projects are identified, alderpeople were told last week in a finance committee hearing.

Related: Updated $1.25B housing and economic development bond proposal would give council more authority over spending, more frequent updates from officials 

The city plans to pay back the borrowed funds using new revenue freed up by the expiration of dozens of tax increment financing (TIF) districts over the next four years. The city has estimated that principal and interest on the total bond issuance would equal $2.4 billion over 37 years. 

Supportive groups such as the Civic Federation and Metropolitan Planning Council argued last week the bond proposal is a way to reduce the city’s overreliance on TIFs, an economic mechanism they said doesn’t lead to equitable investment nor bring dollars to the places that need it most. 

On Monday, finance committee was set to consider the substitute bond ordinance (SO2024-0007838) discussed last week, which would give City Council approval power over allocations of bond proceeds over $5 million, require more frequent hearings from the city on the progress of the bond-financed projects and spending, require publication of project selection criteria and a list of projects, and make the city present updated financial projections to the City Council following the expiration of TIF districts and receipt of revenue.

But before the item could receive a vote by the committee, Ald. Bill Conway (34) motioned to lower the total bond authorization to $350 million and to lower the threshold for City Council approval from $5 million to $1 million, but it was quashed by a motion from Ald. Daniel La Spata (1) to table Conway’s motion. La Spata’s motion to lay Conway’s motion on the table passed 18-13. 

Following a short recess, Dowell said the bond ordinance would be held in committee as the committee continued with other business. She told reporters following the meeting that the bond authorization amount was not up for debate and believed the primary point of contention was over the council approval threshold. 

“Reducing the amount of the bond is not negotiable because we actually have a greater need for affordable housing and economic development in the city of Chicago across many neighborhoods, not just marginalized communities, across all communities,” Dowell said. 

“Broadly, I think this is an ordinance where we really need to walk before we can run,” Conway told reporters after the meeting. “There’s a lot of unknowns here.” 

Conway said he recognizes the city faces an affordable housing shortage and favors the “broad values” of the bond ordinance but worried about how the proposal could impact the city’s bond rating, how the city will plug future budget gaps with a reduced TIF surplus and exactly how many housing units and projects will be funded. 

“Believe it or not, I commend the mayor and many of the folks in city government for trying to address (the housing shortage), but let's see how this works before we do it for $1.25 billion,” Conway said. 

Conway said he selected $350 million because that’s the “rough total of the cumulative loss of TIF over the next four years.” 

“I think it's a bit inappropriate for us to be doing something of such a large volume that will go into beyond our city council term and beyond the mayor's term as well,” Conway said. “So keeping this smaller number, I think, keeps it within this term.” 

Dowell said the average TIF approval amount since she has led the finance committee has been $10 million. 

The finance committee approved the allocation (SO2024-0008370) of $9 million in city TIF assistance to a low-income housing unit development at 1312 S. Talman Ave. Ogden Washtenaw A2 Residential LP, Ogden Commons and Generations Housing Initiative plan to develop a four-story residential building on the site with 75 units for varying income levels, including a mix of market rate units and low-, very low- and extremely low-income units.  

Of the total units, 57 are planned to be designated as affordable and 18 will be market rate units. The building will also include a fitness center and 56 parking spaces.  

The TIF assistance will be used to help developers cover the costs of developing the affordable units in the building, environmental remediation and developer fees. 

Finally, the finance committee approved multiple payments to settle lawsuits against the city. 

The finance committee approved a $175,000 settlement to Felicia Petties, who was injured when Chicago Police Officer Steve Liarakos struck her vehicle with his police vehicle in 2019. 

The committee approved a $385,000 settlement to Marilyn Salazar, who in 2019 was knocked off her bike when it was struck by a police cruiser driven by Chicago Police Officer Erika Perez. Salazar broke her arm, missed weeks of work and has not been able to return to her job as a chef as a result of the effects of the injury. 

The committee also approved a $750,000 settlement to Bryan Mejia, who sued over injuries he sustained during a May 2020 protest in downtown Chicago. Mejia alleges police officers committed battery against him by striking him with a baton, falsely arrested him and committed a hate crime against him as one officer allegedly yelled a racial slur at him. 

The committee approved the settlement to Mejia on a 25-6 vote. Some of the alderpeople opposed to the settlement questioned if Mejia had come downtown with the intent of spreading “chaos” or if the city’s continued settlement for protest-related injuries would incentivize the monetization of bad behavior, especially as the city faces more than a dozen other pending civil unrest-related lawsuits. Alds. Derrick Curtis (18), Raymond Lopez (15), Marty Quinn (13), Felix Cardona (31), Brendan Reilly (42) and Nick Sposato (38) voted no.