The Chicago Transit Authority plans to help finance a $3.6 billion extension of the Red Line by creating a new tax increment filing district that will raise money from higher property taxes.
The authority plans to extend the 26-mile Red Line, among the city’s busiest, by more than five miles to 130th Street and add four new stations past the terminus at 95th Street, the Chicago Sun-Times reported. To fund it, it must raise $1.4 billion to qualify for a $2.2 billion federal grant.
The proposed TIF district, which needs City Council approval, would freeze tax collections at a certain level within its boundaries. As much as $950 million of higher property taxes – the increment – would help finance the line’s extension.
Chicago property taxes are tied to inflation, potentially providing a lift for the city’s revenue. As inflation accelerates, Mayor Lori Lightfoot could potentially quadruple taxes to $86 million next year if she decides to collect the full amount owed under her formula.
The TIF proposal for the line’s extension is similar to a TIF district created to fund a rehab of the Red Line on the North Side. The authority is hoping to use funds through a federal grant program called New Starts, which helps fund rail extensions and new line projects across the nation.
The South Side transit TIF district would span about eight blocks, starting at Madison Street in the Loop and running south to Pershing Road. The result would bring property tax funds into the Far South Side from areas in and around Downtown.
The extension is “an equitable investment that supports a stronger Chicago for all,” Catherine Hosinski, a CTA spokeswoman, told the outlet. “Investing in all communities brings economic resilience and stability to the entire city. It also creates sustainable transportation options, which support critical climate and sustainability goals.”
The TIF boundaries were drawn only to draw money for the CTA’s portion of the funding, and would exclude existing TIF districts, Hosinski told the publication. Legislation approved by Illinois six years ago said transit TIFs could be formed for the Red Line extension and three other projects.
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CTA’s $2.3B Red Line expansion could be catalyst for South Chicago development
— Victoria Pruitt