Chicago Teachers Solidarity Campaign Comments on How Hyatt Corporation and Penny Pritzker Directly Benefit from $5.2 Million TIF Property Tax Subsidy
- Category: Commentary
- Published on Friday, 17 August 2012 09:30
- Written by David Orlikoff
CHICAGO—(ENEWSPF)—August 17, 2012. On behalf of the Chicago Teachers Solidarity Campaign, I want to set the record straight about how Hyatt corporation and billionaire Penny Pritzker directly benefit from the $5.2 million TIF property tax subsidy for the private development of the Hyatt Place hotel at 53rd Street. Hyatt hotels Communications VP Farley Kern made a number of misleading statements distancing Hyatt from the TIF.
That Hyatt is not itself receiving the TIF funds or constructing the hotel is irrelevant as it stands to gain a free addition to its hotel fleet. Hyatt's standard franchise agreement states that they must be paid a 'Royalty Fee' based on gross room revenue in addition to a slew of other charges. Starting at 3% the first year, the Royalty Fee increases to 5% by the third year, when the project's TIF scorecard forecasts gross room revenue at $5,562,743. That amounts to $278,137 annually profiting Hyatt corp. directly from the hotel built with $5.2 million in TIF property tax dollars diverted from neighborhood schools and other public services.
This fruitful and free investment will also likely yield capital gains for Hyatt corp. and the Pritzker family that owns and controls it. What's most disturbing is how Penny Pritzker, who sits on the boards of both Hyatt and CPS, simultaneously slashes $3.4 million and 27 positions from 7 neighborhood schools in the 53rd Street TIF district in her proposed CPS 2013 budget, while personally benefiting from the private use of property tax dollars that would otherwise go to those same schools. The CTSC calls for Penny Pritzker to step down from the Chicago Board of Education she was appointed to by Mayor Rahm Emanuel because she has proven unable to secure funding for CPS due to a conflict of interest. Chicago must have an elected representative school board to stand up to the mayor and end the failed TIF programs that are robbing CPS of over $250 million a year.
Franchise greement: http://agreements.realdealdocs.com/Franchise-Agreement/FRANCHISE-AGREEMENT-between-HYATT-PLACE--2442547/
TIF Scorecard: http://www.cityofchicago.org/dam/city/depts/dcd/tif/T_105_HarperCourtHyattCDC.pdf