8/2/2019 Six Reasons to Vote No

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G R A S S R O O T S C O L L A B O R A T I V E637 S. DEARBORN, THIRD FLOOR CHICAGO, IL 60605

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B r i g ht on P a rk N ei g hborhood C ounc i l , C h i ca g o C oa l i t i on f or t he H om el es s , C h i ca g o T ea chers Uni on, En l a ce C h i ca g o,

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H e a l t h c a r e I l l i n o i s I n d i a n a , S o u t h s i d e r s O r g a n i z e d f o r U n i t y a n d L i b e r a t i o n

SIX REASONS TO VOTE NO TO THE INFRASTRUCTURE TRUST ORDINANCE

1) This will create a fast-track for deals like the parking meter deal all over again, but much larger.Mayor Emanuel wants to create an entity that will essentially cut deals with private investors in order to fund public

infrastructure projects. Mayor Daley entered into a similar agreement in 2008 with Morgan Stanley, Abu DhabiInvestment Authority, and Allianz Capital Partners1. The only difference is that Daleys plan leased an existing asset,while Emanuel proposes to lease unlimited future assets.

Though Emanuel insists his plan is different from the parking meter lease, James Hooke, Macquerie's chief operatingofficer, contradicted this clearly: "All of these schemes, whatever label you put on it, involve some sort of asset beingsold over for a period of time so the private investor can get a return on their investment." 2

These deals alwaysfavor investors over taxpayers because they promise higher returns for large sums of moneyinvested quickly. The real consequences of the parking meter deal are more than enough to vote against thisInfrastructure Ordinance: Chicago drivers will pay a Morgan Stanley-led partnership at least $11.6 billion to park atcity meters over the next 75 years, 10 times what Mayor Richard Daley got when he leased the system to investors in2008.3

2) The burden of user fees will disproportionately impact low and middle income Chicagoans.Just as any rise in fees or cost of living disproportionately affects low and middle income Chicagoans, and particularlyminority communities, the same will apply to the consequences of any risky deals entered into by this Infrastructure

Trust.

The Emanuel Administration stated an example of how the trust would work in the case of the long overdueextension of the Red Line to 130 th Street. The city offered as a potential solution the creation of a distance-basedfare system to pay for the costs.4

This poses the most troubling aspect of the plan. After struggling for decades without train service, low-income Blackresidents on the Far South Side finally may get it, but will have to pay the price. All fees or taxes based on usagealways impact middle and low-income residents hardest. To use the new service available to them, those residentswill have to pay more. Meanwhile, those who live near city center, primarily higher income Chicagoans with moretransit options, will continue to enjoy lower fares that come with the privilege of living near downtown.

3) There is no guarantee that the poorest neighborhoods will benefit from this Trust.In fact there is more of a guarantee that the poorest neighborhoods such as Roseland, Englewood, and Brighton Parkwill not see any benefits from this Trust because projects in these areas cannot guarantee high enough returns to

1 Morgan Stanley Groups $11 Billion Makes Chicago Taxpayers Cry,Bloomberg, 8 August 20102 Emanuel to Push for Trust on Projects, Chicago Tribune, 9 March 20123Bloomberg4 Emanuel, Clinton Announce $1.7 Billion Trust for Chicago Projects, Chicago Sun-Times, 1 March 2012

8/2/2019 Six Reasons to Vote No

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G R A S S R O O T S C O L L A B O R A T I V E637 S. DEARBORN, THIRD FLOOR CHICAGO, IL 60605

T E L 3 1 2 . 4 2 7 . 0 5 1 0 F A X 3 1 2 . 4 2 7 . 4 1 7 1w w w . t h e g r a s s r o o t s c o l l a b o r a t i v e . o r g

A ct i on N ow , A m er i ca n F r i ends Serv i ce C om m i t t ee- Grea t La k es R eg i on, B i ck erd i k e R edevel opm ent C orpora t i on,

B r i g ht on P a rk N ei g hborhood C ounc i l , C h i ca g o C oa l i t i on f or t he H om el es s , C h i ca g o T ea chers Uni on, En l a ce C h i ca g o,

I l l i n oi s Hu n g e r C o a l it i o n S e r v i c e E m p l o y e e s I n t e r n a t i o n a l U n i o n L o c a l 7 3 , S e r v i c e E m p l o y e e s I n t e r n a t i o n a l U n i o n

H e a l t h c a r e I l l i n o i s I n d i a n a , S o u t h s i d e r s O r g a n i z e d f o r U n i t y a n d L i b e r a t i o n

entice investors. This continues the pattern of neighborhood disinvestment that has created stark disparities in quality

of life for Black and Latino communities in our city.The priority for infrastructure projects must be based on the areas of the City that need them most, NOT based onthose which would ensure the highest returns.

4) It will give Mayor Emanuel close to unlimited powersto gamble with taxpayer money.Debt is debt. Mayor Emanuel spins it as investment, but we all know that these corporations invest expecting highreturns. This ordinance allows for the Mayor to do any and all things necessary (Section 9) to pay back investors.Emanuel can enter into risky agreements with billion-dollar corporations that will contribute to the Trust, and then dowhatever it takes to pay them back- whether it is more than doubling our taxes several years from now (like he didwith the water bills already)5, or raising CTA fares (as was proposed by his Chief Financial Officer Lois Scott)6. These

corporations are investing because they expect higher returns than they would yield through the typical bondingprocess. Giving Mayor Emanuel the power to do any and all things necessary to pay back investors is not good for

Chicago taxpayers. It would leave working families of Chicago, already struggling to keep up with bills and taxes,even more vulnerable.

5) It takes power away from the people and City Council, and gives it to the Mayor.The infrastructure trust ordinance will essentially replace the City Councils oversight and votes over billions of dollars

worth of infrastructure projects. The board will be entirely appointed by the Mayor (Section 2). Once projects get tothe Council, so much will have already been put in motion that it will be very difficult for Aldermen to suggestchanges, much less halt any projects.

6) It enables corporate control over Chicagos public assets, allowing privatizers to reap enormouspotential returns

The Infrastructure Trust would be overseen by 5 mayor-appointed Board members, chaired by the CFO of BoeingAirlines, who is also a member of Emanuels World Business Chicago. It enables a direct avenue for the citys privatesector to have enormous control over public assets, with a complete lack of disclosure. Mayor Emanuel has personaland political ties to a majority of investors in Chicago, raising serious concerns around independence andaccountability.

Emanuel touts Macquarie, the lease owners of Chicago Skyway, as a key partner in the infrastructure trust.Macquarie has averaged gross internal rates of return of more than 20 percent in its North American infrastructureinvestments.7 No wonder they are excited.

Investors need the terms of this ordinance more than Chicago does. Making profits on Wall Streetapparently isnt enough now they want to use working Chicagoans as their piggy bank.

Chicago working families cant afford yet another parking meter boondoggle.

5 Emanuels Budget Unanimously Approved, Chicago Tribune, 16 November 20116Sun-Times7 Exclusive: Macquarie eyes $2 billion infrastructure fund-sources,Reuters, 2 April 2012