U.S. Rep. Bobby Rush (D-Ill.), a frequent critic of Mayor Richard Daley’s school board, called for the resignation Monday of board president Gery Chico–charging that Chico has conflicts of interests in his role as a lawyer representing developers seeking tax breaks.
Saying he would not step down as a response to what he characterized as political grandstanding by Rush, Chico denied any conflicts of interest and added that Rush was factually wrong on some claims.
“I’m not resigning,” Chico said. “Congressman Rush has been reckless in reading the law and the facts.
“I think the congressman has embarked on his unannounced campaign for mayor,” Chico added. “Once again I’m asking Congressman Rush to stop the petty attacks.”
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Rush raised questions about Chico and the Chicago law firm where he is a partner, Altheimer & Gray, and its client, Pal/Met Venture, which owns and is seeking to restore the Bismarck Hotel and Palace Theatre at 171 W. Randolph St.
As an attorney, Chico said he and his firm have represented Pal/Met in City Hall in the developer’s efforts to be included in a Central Loop tax-increment financing district that would steer property taxes toward the project. Under the proposed refurbishing of the Palace, Pal/Met would receive $17.6 million in TIF financing, officials said.
Raising a common charge against TIFs, Rush said that including the Bismarck Hotel and Palace Theatre in the TIF “would cost the public schools needed revenue.” Property taxes diverted toward the project would mean a loss in school funding, Rush alleged.
TIFs allow any increases in a neighborhood’s property taxes to be used to pay off development and construction costs, instead of paying for local services such as police, fire and schools.
“Gery Chico cannot represent the interests of the students of Chicago while representing clients who benefit from decisions that take away from the students’ (educational funding),” Rush said. “This is the proverbial fox guarding the chicken coop,” Rush said in a press conference outside the Bismarck Hotel.
Rush further charged that Chico could face a conflict of interest because a school board appointee sits on the TIF Joint Review Board, an accusation Chico also denied.
All new TIFs are supposed to come under the scrutiny of the Joint Review Board, which met last month for the first time in eight years. The Chicago school board is among local taxing bodies that send representatives to sit on the review board in an effort to protect their tax bases, officials said.
Chico does not actually sit on the board. He said that an appointee of schools Chief Executive Officer Paul Vallas was the system’s representative.
Chico said TIFs do not conflict with the school board’s educational objectives and added that TIFs benefit the school system because “they reverse trends of economic decline, revitalize communities and promote growth in the property tax base.” TIFs are designed to redevelop blighted areas.
School board officials added that the school system has arranged to collect $5 million a year for at least 10 years from the Central Loop TIF. In addition, the schools will garner $30 million to $40 million in funds from the Near North TIF, which will be used to build new buildings replacing Jenner, Turner and Byrd Schools.
In any event, Vallas said that the state tax cap on the school budget limits the extent of revenue loss caused by TIFs.
But Rush called the Bismarck Hotel development a “sweetheart deal” that would financially benefit Chico, who was Daley’s former chief of staff.
“This Loop area certainly does not meet the criteria for TIFs,” Rush said. “This is some of the most expensive property in the country.”
Meanwhile, the Joint Review Board also is expected to examine another developer’s project represented by Chico. Chico said he and his firm are representing World Premier Properties Inc., which is seeking to build a multicommercial facility with a grocery in an existing TIF at 95th Street and Stony Island Avenue, Chico said.
Chico said a school board representative appeared at last month’s Joint Review Board meeting on that proposed South Side project, but he said he intentionally did not talk with the representative on the matter. “I don’t know what she said,” Chico said.