Aldermen Advance Measure to Revoke Tax Incentives After Botched Smokestack Demolition

The partly demolished site of the former Crawford Power Generating Station in April 2020. (WTTW News)The partly demolished site of the former Crawford Power Generating Station in April 2020. (WTTW News)

City officials would have the authority to strip multimillion-dollar tax incentives from companies that violate the city’s rules under a measure aldermen advanced Tuesday.

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The City Council’s Committee on Economic, Capital and Technological Development unanimously endorsed the measure authored by Ald. Mike Rodriguez (22nd Ward) after Hilco Global Partners demolished the smokestack at the former Crawford Power Plant in April, sending a plume of dust over six blocks of homes in Little Village.

Rodriguez said the measure would allow the city to “hold bad actors accountable.”

The full City Council is scheduled to consider the measure Oct. 7.

In response to a question from Ald. Gilbert Villegas (36th Ward), Chicago Department of Planning Deputy Commissioner Tim Jeffries said he did not know whether the measure could be applied to companies that have already been awarded tax incentives.

That would have to be determined by the city’s Law Department, Jeffries said.

It would be up to the City Council to determine whether to revoke a tax incentive after a series of reviews and public hearings, according to the proposal.

Before Rodriguez was elected in 2019, the City Council agreed to grant Hilco a $19.7 million property tax break over the next 12 years after it announced plans to tear down the red-brick power plant, built in 1924 and shuttered in 2012, and replace it with a warehouse.

City officials approved the tax incentive over the objections of local environmental groups, which said the plan would pollute their mostly Latino neighborhood and continue decades of systemic environmental racism that left residents sicker and poorer than Chicagoans who live in white neighborhoods.

Once the tax breaks are applied, the property at 31st Street and Pulaski Road would be assessed at 10% of its market value for the first 10 years, 15% in the 11th year and 20%in the 12th year.

The tax incentives have been a key tool for city officials desperate to create well-paying, often unionized jobs and find new uses for long vacant and abandoned land, like the former Crawford Coal Plant.

But the credits have become increasingly controversial, with aldermen recently demanding more information about whether companies applying for the incentives have concrete plans to hire firms owned by female, black and Latino Chicagoans.

The city issued 16 citations to Hilco in April, which come with $68,000 in fines, the mayor’s office announced. Critics of the firm said those fines are a drop in the bucket compared to the tax breaks granted by the city.

The Illinois attorney general has sued Hilco over the demolition, saying it violated state environmental laws and put the community at risk.

An effort by the city to revoke a tax incentive is unprecedented, and Rodriguez said he was determined to move cautiously to ensure that it could withstand a legal challenge.

Contact Heather Cherone: @HeatherCherone | (773) 569-1863 | [email protected]

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