Community groups opposed to a tax subsidy tied to the Lincoln Yards development will sue the city to try to stop the deal, they announced Tuesday.

The Grassroots Collaborative and Raise Your Hand plan to file the suit in Cook County Circuit Court, arguing Mayor Rahm Emanuel’s administration failed to meet state rules for tax increment financing that stipulate the property tax diversion program only be used in blighted areas where development wouldn’t occur without the infusion of public dollars.

The City Council last week approved up to $1.3 billion in TIF money for infrastructure work in and around Lincoln Yards, slated to be built on 55 acres along the North Branch of the Chicago River near the tony Lincoln Park and Bucktown neighborhoods.

Grassroots Collaborative has complained there isn’t enough affordable housing included in the 14.5 million square feet of office, residential, hotel, restaurant, retail and entertainment space planned for Lincoln Yards. Raise Your Hand, a Chicago Teachers Union-aligned public school advocacy group, says a big chunk of the tax money should instead be earmarked for Chicago Public Schools.

Critics of TIF have for decades questioned how former Mayor Richard M. Daley and then Emanuel administered the TIF program, which freezes the amount of property tax money paid to taxing bodies such as the city and the school district for up to 23 years while directing additional money collected as property values increase to instead pay for projects within the boundaries of the TIF district itself.

While critics frequently have complained that wealthy developers were reaping the benefits of public money to bolster their projects as needy communities have seen too little benefit, the Lincoln Yards development has galvanized TIF opponents because of its sheer size and the fact it’s to be built in such a prime spot.

Mayor-elect Lori Lightfoot said during her campaign that the process to approve Lincoln Yards and another massive TIF outlay for The 78 project in the South Loop were rushed and not transparent enough. But last week, she helped the proposals win City Council approval by first calling on aldermen not to vote on them, then assisting their passage by getting the developers to agree to include more contracts for minority- and women-owned businesses.

Some activists say the concessions Lightfoot won don’t go nearly far enough, and the TIF deals should be scrapped or completely reworked. Lightfoot said she believes there will be further chances to hold developers’ feet to the fire as the projects proceed.

jebyrne@chicagotribune.com

Twitter @_johnbyrne