Applause—And A Pause or Two—As City Signs Off on TIF Agreement with District 205

Accolades—and a few caveats—accompanied Elmhurst City Council's approval Monday of an intergovernmental agreement with the city's other major taxing districts for an economic development zone on North York Road.

Tax Increment Financing District 4 stretches up York Road from just south of North Avenue to Grand Avenue and includes undeveloped parcels at Hahn and Addison streets, as well as the new Mariano's Fresh Market. TIF 4 has been in place since last year.

A TIF district diverts new tax revenues back into that area's development for up to 23 years, which is one of the reasons Elmhurst Unit District 205 at first resisted the creation of TIF 4. However, there were no hard feelings Monday, when the council unanimously consented to a revenue-sharing agreement, which will send 10 percent of the tax increment after the first 11 years of TIF 4 to the school and park districts. That amount is estimated to be about $3 million to $4 million over the life of TIF 4.

The city also will declare a surplus in the Lake Street TIF District (TIF 2) of $1.5 million, of which the School District gets $1 million.

Related: School Board Unanimously Signs Off on City-School TIF Agreement

“This is the most progressive revenue-sharing agreement in the state of Illinois,” said 6th Ward Alderman Steve Morley, chairman of the city's Development, Planning and Zoning Committee.

But even though the pact was referred to more than once as “landmark,” there were a few reminders from aldermen that economic development work in the city has been a long process—and that in some ways, it has only just begun.

Fifth-Ward Alderman Chris Healy said that the city has been proactive in sharing the benefits of earlier TIF districts, including those in City Centre, and on Route 83 and St. Charles Road, where the city released properties from district boundaries or declared surpluses that returned to other taxing bodies.

Third-Ward Alderman Mike Bram said that between the more than 6 percent of new tax revenues from TIFs 4 and 2, about 15 percent of total TIF revenues will go to District 205.

In addition, the city has promised that some $6 million in TIF funds will go toward capital improvements to both Conrad Fischer School and Churchville Middle School.

“That's pretty substantial,” he said.

And while the city celebrated its ability to reach an agreement on a complicated issue, they were mindful that the economy is the final party that has to sign off on their economic development plans.

Fourth Ward Alderman Kevin York, who will have a student in District 205 for the next 10 years, said the agreement can only work if TIF 4 generates new tax dollars for the city, the schools and the parks.

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