Last week we wrote about how a bad City decision – the sweetheart contract initially given to City Mgr. Jim Hock – continues to propagate more bad decisions, like the even sweeter and longer-lasting employment deal the City Council recently voted to give Hock (“Bad City Decisions Only Get Worse – Part I,” December 22). 

Today’s topic is that bad decision known as the City’s Façade Improvement Program (the “FIP”).  

The FIP was instituted several years ago by a misguided City Council in an ill-conceived attempt to throw a publicly-funded “bone” to existing commercial building owners in consideration of the multi-millions of tax dollars that the City was funneling toward the Uptown TIF district and PRC’s Uptown Redevelopment project.  

Proponents of the FIP – including former mayor Michael Marous, former aldermen Michael Tinaglia and Don Crampton (1st), John Benka (2nd), Sue Bell and Andrea Bateman (3rd), Sue Beaumont and Howard Frimark (4th) and Rex Parker (6th), and current Ald. Rich DiPietro (2nd) – claimed that FIP funds were an “investment” that would pay substantial dividends to Park Ridge taxpayers in the form of higher property taxes from buildings that improved their facades through use of FIP money, and in higher sales taxes from businesses located in those buildings. 

Consequently, the City issued bonds for (a/k/a, borrowed) approximately $800,000 to fund the FIP.  According to Ald. Joe Sweeney (1st) at the December 20, 2010, City Council meeting, $398,000 already has been spent in the TIF district on the buildings that house Country Financial, Fannie May Candies, Hallmark, Hay Caramba, the Original Pancake House, Pines Store for Men & Boys, Raffia, Remax, Starbucks, Solari & Huntington, and others.

But guess what?  No procedure was put in place to measure what kind of return (in the form of increased property taxes and sales taxes) the City would be getting for its FIP money.  And as far as we can tell, to this day City Staff cannot muster more than bare speculation and anecdotes about whether, and how much, the taxpayers have benefitted from that $398,000 of FIP “investment” to date.

That lack of provable benefits wasn’t about to stop Alds. Sweeney, Jim Allegretti (4th) and Tom Carey (6th), however, as they tried their darnedest to give away another $100-150,000 of our money to gussy-up the facades of the Pickwick, the 720 Garden “non-profit center,” and the is-it-ever-going-to-open O’Reilly’s Irish Pub buildings, the last of which is currently owned by a bank following foreclosure.  They did so by seeking an amendment to DiPietro’s renewed motion to suspend the FIP that would exempt those three buildings from the suspension because applications for FIP money had already been made, even though they had not yet been acted upon. 

Fortunately, the absence of façade giveaway supporter Ald. Robert Ryan (5th) from the meeting provided only a 3-2 majority for Allegretti’s exemption amendment.  So, according to Appendix B of the City Council Policy Statements Manual (as brought to the Council’s attention by Ms. Judy Barclay), Mayor Dave Schmidt was allowed to cast a “no” vote, resulting in a tie and the defeat of the exemption amendment.  

Unfortunately, the subsequent 5-0 vote in favor of DiPietro’s overall FIP suspension motion likely has not brought an end to this issue.  Instead, look for Allegretti, Sweeney and/or Carey to seek reconsideration of that vote at the next Council meeting – which they have the right to do under Council procedures because they strategically voted with the majority in favor of the FIP suspension even thought they were against it. 

But the true insidiousness of the Council decision authorizing the FIP year ago was displayed during the December 20 meeting, when O’Reilly’s co-owners Ed Berry and Declan Stapleton, along with their attorney, William Turner, addressed the Council in arguing against suspension of the FIP.

All three of those gentlemen correctly noted that the FIP was an integral element of the grandiose Uptown TIF plan specifically intended to give public money away to private property owners and businesspeople.  They also argued that they went through all the City processes – including Planning & Zoning Commission and Appearance Commission proceedings – with the understanding (fostered by City Staff, of course) that FIP money would be available to them.  Attorney Turner went so far as to invoke the legal concept of “detrimental reliance” and warned that O’Reilly’s financing might fall through without the City’s $50,000 of FIP funding.

That’s the problem with enacting wrong-headed, expensive programs and then letting them stay on the books well after somebody should have realized that they aren’t paying for themselves and are no longer affordable.

As Ald. Frank Wsol noted in addressing the O’Reilly’s spokesmen’s first point: “The TIF is destroying the [City’s] General Fund” because it has already depleted that fund of millions of dollars to cover the debt service on the bonds and other TIF-related expenses that TIF revenues have been unable to cover.  And as Wsol also suggested to the O’Reilly’s folks: “If your project is teetering because of $50,000, maybe it’s not a viable project.”

That’s exactly correct on both counts, as was Ald. Wsol’s point that the City is being asked to continue these giveaways when it already has effectively defaulted on a couple hundred thousand dollars worth of TIF-related payments to School Districts 64 and 207 because the City didn’t have the money to pay them this year – making any more giveaways to private businesses and property owners even more irresponsible.

We here at PublicWatchdog believe that the City should be “friendly” to business.  But that friendliness should take the form of clear and understandable codes and regulations, interpreted and applied predictably, consistently, diligently, expeditiously and decisively by competent City Staff and City commission members.

Paying what amounts to bribes for businesses to locate or stay in Park Ridge, on the other hand, is just plain bad public policy.  Not only does it invite the blackmail-like process of real or imaginary bidding wars with other communities, but it demeans Park Ridge by effectively conceding that our community can’t compete for decent businesses without such bribes.

In his comments to the Council, Mr. Berry spoke of O’Reilly’s generating 40 jobs for local residents, $25,000 of annual sales tax and $40,000 of property taxes from that currently shuttered and foreclosed site.  His partner, Mr. Stapleton, praised the FIP as a means by which the City is “co-investing” in local businesses. 

Frankly, we don’t think the City, as a matter of public policy, should be “co-investing” with any private business.  There are far too many downsides to such “investments” and not enough upsides.  Just look at the City’s purported “partnership” with PRC on the Uptown Redevelopment project.

But if the City chooses to do so, it should not provide up-front money.  Instead, it should provide back-end incentives…like, for example, some form of tax abatement, but only after these businesses can prove that they actually have brought substantial undisputed and quantifiable financial benefits to the City.

The current City Council and its predecessors since 2002 weren’t able to figure that out.  Here’s hoping a new Council can do better.

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