Fact check: What you need to know about the “Rock Island Racket” ad targeting Mike Jacobs

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Editor’s Note: This is part of a series of political ad fact checks we are publishing heading into the November 4, 2014 general election.

“Rock Island Racket” is a 30-second commercial that targets Sen. Mike Jacobs, a Democrat representing Illinois’ 36th District. The ad is paid for by his Republican challenger, Republican Neil Anderson.

Watch the ad – click here

The claims: The ad “Rock Island Racket,” from Neil Anderson for Illinois makes claims about Illinois State Senator Mike Jacobs abusing his power. Specifically the ad claims he used his position as State Senator to help his company, River Eagle Investments by co-sponsoring a bill and receiving a TIF, or tax increment financing, from East Moline.

What you should know: In 2010, River Eagle Investments purchased the old Case New Holland site in East Moline. Senator Jacobs is an investor for River Eagle Investments.

In 2013, River Eagle Investments and Beitler Real Estate Services announced a $150 million development for the property which included a Hyatt hotel, a Hyatt extended-stay hotel, an 80-unit apartment complex, retail space, and more. The project is known as Fountainhead Quad Cities.

The Fountainhead project is located in the Illinois Quad City Enterprise Zone. The Illinois Quad City Enterprise Zone was created in 1988 and is scheduled to expire in 2018.

Enterprise zones are designated by the State of Illinois and are in economically depressed areas of the state. The purpose of the Illinois Enterprise Zone Act is to create economic growth and neighborhood revitalization in those areas. Businesses that are located in a designated enterprise zone are eligible to receive special state and local tax incentives among other benefits.

In 2012, Senator Mike Jacobs co-sponsored SB3616, which made changes to the Illinois Enterprise Zone Act.

The bill became Public Act 97-905 on August 7, 2012.

The bill Jacobs co-sponsored allows for enterprise zones to apply for an extension of that designation for up to 25 years and the benefits that come along with it.

The bill also eliminated three tax incentives, created a new enterprise zone board, and expanded the program so that more towns in Illinois could compete for a zone.

On March 12, 2014, the City of East Moline and River Eagle Investment signed a redevelopment agreement for the Fountainhead Project. As part of the agreement, the City of East Moline will pay up to $10.2 million for infrastructure project costs as part of TIF that the City of East Moline created for the project and approved in 2013.

TIFs are created to help with redevelopment in areas that have seen better days. When a TIF district is created, the property within that district still generates property tax, but that property tax goes into the TIF fund to pay back the money the city spent as part of the project. It does not go to other taxing bodies such as schools or the forest preserve.

When a TIF is in place, the school district typically does not receive the tax money the project generates. In the case of the Fountainhead project, the TIF agreement is for 23 years. That means, the school district will not receive any of the property tax money the project generates for 23 years. However, when the TIF expires, the schools then get the benefit of having a development that creates additional revenue.

In the case of Fountainhead, there will be a 1% sales tax on the two hotels in the project, according to City Administrator Cole O'Donnell. That money will go back to the City of East Moline to help pay the debt of $10.2 million the City of East Moline will have as part of the project.

Coming next: We will fact-check an ad attacking Neil Anderson.

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WQAD News 8 reporter Brittany Lewis and the Quad-City Times reporter Ed Tibbetts have partnered to check the facts behind political ads.

Watch for our Political Ad Fact Check reports Sunday nights on News 8 at 10 p.m.

Check out our continuing Political Fact Check coverage, click here.

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2 comments

  • EM 37

    Thanks WQAD. I didn’t really understand the connection until now. It’s much worse that I thought. What a conflict of interest. As a Senator, when you sponsor a bill to keep your business “deals” afloat, there’s a conflict. WQAD, shame on you. You are supposed to report the news. Not make political commercials for your friends. Very biased.

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