Developers of Foundry Park, a megadevelopment on Chicago's former Lincoln Yards site, are set to receive over $200 million in public funding for infrastructure. This substantial allocation, reported by CoStar and Crain's Chicago Business, comes despite developers already committing $33 million of their own capital for foundational elements.
A major private real estate project is being touted for its economic benefits, but a substantial portion of its foundational infrastructure costs will be borne by taxpayers through Tax Increment Financing (TIF). This funding mechanism for Foundry Park public funding in Lincoln Yards, approved by the Community Development Commission, aims to transform the northern half of the former Lincoln Yards site, according to the Chicago Tribune.
While the city aims to spur development, it appears to be doing so by significantly subsidizing private profits. This potentially sets a precedent for future large-scale projects and diverts funds from other public priorities. The Foundry Park development will unlock up to $202 million in TIF for infrastructure improvements, reports the Chicago Tribune.
Understanding Foundry Park's Funding Structure
- The total infrastructure costs for the Foundry Park project are estimated at almost $235 million, according to Block Club Chicago.
- JDL Development and Kayne Anderson Real Estate plan to contribute $33 million for infrastructure, as reported by the Chicago Tribune.
- The remaining infrastructure expenses, totaling over $200 million, will be reimbursed to developers through tax increment financing.
By covering approximately 86% of the foundational infrastructure costs for Foundry Park, Chicago taxpayers are underwriting the risk for JDL Development and Kayne Anderson Real Estate. This arrangement maximizes returns for the developers rather than stimulating development in truly underserved areas or addressing critical public needs.
