In 2016, SB Friedman was engaged by the Chicago Transit Authority (CTA) to lead the designation of a new type of Tax Increment Financing (TIF) district, which will be used to generate revenue for the $2.1 billion first phase of the CTA’s and Red and Purple Modernization (RPM) Program. The RPM is the largest capital improvement project in CTA history, and will rebuild the nearly century-old North Branch of the Red Line, adding critical capacity to accommodate current and future riders.
A “Transit TIF” district differs from typical TIF districts in eligibility criteria, use of funds, and length. The RPM Phase One Transit TIF will be used to generate $625 million in funds to pay a portion of the local match required for the $1.1 billion in U.S. Department of Transportation (USDOT) grants for the RPM Phase One project. Because of federal deadlines, SB Friedman needed to complete designation of the first-of-its-type Transit TIF under an aggressive timeline.
SB Friedman led a consulting team, including Johnson Research Group and Christopher B. Burke Engineering, and worked closely with the CTA, City of Chicago Department of Planning and Development and Department of Law to complete the following tasks:
- Prepare, edit and maintain adherence to a challenging timeline for approval;
- Prepare draft and final boundaries for the Transit TIF, excluding existing TIF districts, and prepare a PIN list (nearly 54,000 PINs);
- Coordinate with City departments and the Cook County Clerk’s Office to refine and verify the boundary and PIN list;
- Conduct required eligibility analyses;
- Prepare and finalize the Redevelopment Plan and Project (the “Plan”), including a variety of maps;
- Project final Equalized Assessed Value for the Transit TIF;
- Prepare mailing lists and send over 410,000 notices to residents and taxpayers;
- Conduct the public approval process, including a Public Meeting, Joint Review Board Meeting, Public Hearing and other meetings; and
- Complete two amendments to existing TIF districts (Devon/Sheridan and Bryn Mawr/Broadway) to remove parcels and include those parcels in the Transit TIF.
At the same time, SB Friedman also conducted a loan feasibility study to assist the CTA in preparing an application for a Transportation Infrastructure Finance and Innovation Act (TIFIA) loan from USDOT for approximately $625 million. This analysis included preparing a revenue projection model and conducting various sensitivity analyses to help understand the likelihood of the Transit TIF district being able to support the TIFIA loan amount.
Results: City Council approved the Transit TIF district on November 30, 2016. In addition, the CTA was awarded the $1.1 billion in federal grants in January 2017. The USDOT is currently reviewing the TIFIA loan application.