TIF Revenue-sharing Plan Comes With Three Components Designed to Help School, Park Districts

City approval of TIF 4 could come on Sept. 4; Elmhurst District 205 Board members want this agreement carefully spelled out.

Elmhurst officials have been working on a plan for sharing the hoped-for rewards of a new tax increment financing district, known as TIF 4, with Elmhurst Unit District 205 and other local taxing bodies. Aldermen saw a draft proposal for that plan Monday night.

The would extend from Grand Avenue to North Avenue but would also include an area around that is currently part of TIF 1, which covers the central business district.

TIF districts freeze assessed property values for local taxing bodies for up to 23 years to encourage redevelopment in areas considered blighted. TIFs generate revenue through new construction in the district. The difference between the frozen property value and any new growth goes into a fund to pay for public improvements or help finance redevelopment projects in the district.

Other existing TIFs are located in the Lake Street area and at Route 83 and St. Charles Road.

Three-Part Plan

City Manager Jim Grabowski told aldermen the revenue-sharing plan has three components:

  • Pay out a $1.5 million surplus from the Lake Street TIF
  • Share 10 percent of new revenue earned after the 10th year of the new TIF 4
  • Give District 205 money from future TIF revenues for capital improvements at Conrad Fisher Elementary and Churchville Middle School, which are included in TIF 4, and for job training for older special education students.

The plan is intended to allow the school and park districts to have access to new tax revenue generated in the TIF as soon as possible. The surplus from the Lake Street TIF would give the School District $1 million and the Park District $85,000 later this year.

Growth Has Been Flat

The land in the proposed TIF 4 has only seen a .18 percent growth rate over the past 10 years, which represents about $900,000. Without a TIF, city officials said, the School District would likely only see about $3 million more from the area over the next 23 years. TIF 4 would represent 1.4 percent of the city’s total EAV and 1.38 percent of District 205’s total EAV.

Slow growth has also plagued the Hahn Street area, but some aldermen have questioned moving it from TIF 1 into TIF 4.

TIF 1 was established in 1986, then extended for an additional 12 years; nine years are left for its development. The Hahn Street portion of TIF 1 since 2008 was slated to be developed by Morningside Group, but the city in March had to . Morningside cited bad economic times as the reason they couldn't move the project forward.

Officials have said there is no longer enough time left in the extended TIF 1 to properly redevelop city-owned parcels in the Hahn Street area.

Aldermen also questioned placing the building that houses the relatively new CVS drug store and Panera Bread at York and North in a so-called blighted district.

“I cannot support the map for TIF 4,” 1st Ward Alderman Diane Gutenkauf said.

Grabowski said the Panera building is actually 35 years old, which qualifies it for TIF.

'The Devil is in the Details'

Elmhurst park officials also met Monday to discuss TIF 4. A memo from Executive Director Jim Rogers provided to park commissioners prior to the meeting recommended they tentatively approve the plan.

Park Board documents also indicated District 205 already had tentatively signed off on the plan. However, at the Elmhurst District 205 Board meeting Tuesday, District 205 Finance Committee Chairman Chris Blum said that is not the case.

"There is not a tentative agreement with the city on TIF," Blum said. "We've had negotiations with the city on a high level. We're at a point where we're putting things on paper, defining key terms, looking at mechanics and timing. Until those are defined, I wouldn't call it an agreement—or a document even."

He said progress is being made. All board members have been involved in the discussion, and they "hope to get there quickly," he said.

School Board Vice President Maria Hirsch said the district has enjoyed "long-standing successful partnerships" with the city on a number of issues.

However, a "make whole" agreement in 2004 to lessen the impact of TIF 1 was not well defined, School Board members have said.

"There have been varying levels of documentation over the years, and original intentions at times are open to interpretation," Hirsch said. "Elected representatives will change over the life of this 23-year agreement. Good governance dictates the need to memorialize and formally approve detailed agreements for the benefit of both governmental bodies, as well as for the public."

The big issues have been fleshed out, but "the devil is in the details," School Board President Jim Collins said.

"We're delving into those details now. We are all very hopeful and optimistic that we will have an agreement in place by the day the city votes to pass the TIF, and that we can have an intergovernmental agreement we can vote on at that very same meeting," he said.

But, What if … ?

TIF experts are projecting TIF 4 to be worth $100 million to $150 million at the end of its 23-year life, but Gutenkauf urged the council to consider less rosy scenarios.

“What happens if we don’t see these numbers?” she asked.

“If the EAVs don’t increase, this costs us nothing,” 4th Ward Aldermen Kevin York replied.

Grabowski said he felt "comfortable that we are on safe ground."

Grabowski said he expects the city’s Development, Planning and Zoning Committee to convene a special meeting next week to review school and park district replies to the plan. The City Council may consider the ordinances to establish TIF 4 on Sept. 4.

, around York and Vallette streets, and along Riverside Drive. If all are approved, the number of TIF districts in Elmhurst would double, to six.

Dan August 17, 2012 at 12:46 AM
The non TIF properties that are left to support the schools, parks etc. will also pay a cost since they will have to make up for the taxes that would have come from the TIF properties if the taxes hadn't been frozen. If their tax bill is like mine it goes up even when property values go down. Even the incremental increases we all see will no longer be there to support the various taxing bodies. I would be interested in knowing what portion of commercial property will be in TIFs in Elmhurst and how that compares to other cities in Elmhurst.
Bill Angel August 17, 2012 at 03:24 AM
PS...Kevin York is a total HACK! There are way too many costs and assumptions associated with implementing any TIF district to suggest "this costs us nothing." Not to mention those poor saps who will be forced to sell their businesses and properties and essentially forced out of business for some trumped up and bogus financial projections. All to pick winners and loosers for private industry using taxpayer dollars. DiCianni and crew have already committed over $1.5 million and counting for the Mariano's deli deal which by the way is owned by Roundy's out of Milwaukee. Bob Mariano, CEO-President...compensation $875.500 Darren Karst, CFO..compensation $657,800 To date, not a single store has generated the promised tax revenues. The City taxpayer has zero recourse if the project fails in the first ten years of projected payback/breakeven, not including all the other soft costs. The deal is structured to hurt the taxpayer and favors the developer. What person on the dias would strike this same deal using their own money? Shop Dominicks and Jewel out of loyalty. The supermarket margins are razor thin and require huge volume. And the sales taxes they generate are next to nothing.
Darlene Heslop August 17, 2012 at 03:48 AM
i have to agree with peggy...alderman york is wrong on his assessment and needs to go back to "tif 101"...tif's are only profitable when property values continually increase...and right now...they are still declining...therefore...to institute a tif at this time would guarantee the city, and its taxpayers, as well as other taxing bodies...losing money...yes...alderman york and friends...losing money...sorry...but that to me is not "costing us nothing".
Darlene Heslop August 17, 2012 at 03:52 AM
ps...money isn't going to mariano's, it is going to the developer of the property...abbott...who has contributed to the dicianni campaign for county board... .
Steve August 17, 2012 at 08:14 AM
Shouldn't you then contact the school district to ask them why they would allow adding another TIF district with the other three still active.
David R. August 17, 2012 at 02:27 PM
Wrong, Steve -- the school district cannot unilaterally block a TIF, so it is inaccurate to suggest they are "allowing" this.
David R. August 17, 2012 at 02:30 PM
Just another example of Dicianni's shady politics, designed to benefit him personally and not Elmhurst. Does anyone pay attention to this? How can anyone support this bozo?
Tom August 17, 2012 at 03:29 PM
Good to see CAVE member Angel back out of his mom's basement. It's OK, Billy, take some more Prozac and leave the serious work to serious people. You don't like York? That's the great thing about a democracy, you can run against him this April. His term is up. Of course, that would mean you would actually have to do something and leave the safety of your mom's basement. My guess is you will come back and say you don't live in his ward. Run against any incumbent. Please...hell, even Pezza would beat you like a drum and she's the weakest of the bunch. The bad news for you is sock puppets don't get to vote. Darlene - just because you say it/think it does not make it true. Remember, there is a reason, a very good reason, you lost HUGE in the last election. The majority of 4th ward residents see you for what you are. Would you rather that blighted, vacant lot stay as such? Even without the TIF the Marianos deal is a good one. Is there risk? Of course, there's risk in everything, but the reward more than makes up for it. Check the math, Tinkerbell. If Mariano's stays open for more than 2 years or so, and it will, the money the city invested is paid back in full and that property becomes a city ATM, spitting out cash, for years. Not to mention anchoring what is hopefully a north side revival. The more "against everything" you become, the less serious the rest of us take you and you become white noise, albeit with Tinkerbell sparkles.
Tom August 17, 2012 at 03:35 PM
And to Steve and David R - the school and park boards are about to approve a revenue sharing agreement that the city has proposed. They will share in the growth. If there is no growth, then they get the same tax dollars they get now. Why would those boards do that? because they see the benefit of the added revenue that comes with growth and that TIFs work. The city has also released properties from TIF 1 that have given Dist 205 windfalls because of the 4X growth those parcels have received. But who cares what I say. I would encourage you to do your own research. Do not rely on the likes of me, Tinkerbell or Angel. TIFs work, but they are hard to understand. Once you do, you will see why the city keeps using them.
Bill Angel August 17, 2012 at 04:17 PM
Tommy, you drink York's cool aid! Your crazy thinking and his numbers simply don't add up. 2 years payback? Wanna buy some swamp land? I have nothing against Mr. York...Just his baseless and wrong statements. Fuzzy math! I'm pretty sure York is a stay at home mom too. HAs neve run against an opponent. Maybe I will, maybe I won't. If you want to get SERIOUS, tell your boy York to prove up and back up his numbers with facts! TIF 4 will be a huge financial disaster for the students, and Elmhurst taxpayers. TIF 1 has lost millions to date!!! THAT is a known and documented FACT! Northside revival? Dude, I'm here like over 25 years. It is what it is with very successful businesses along the stretch. You really ought to get your mental house in order. Real estate is market based driven, demographics & location, not TIF driven. Your greatest skill is mean spirited rhetoric rather than open, honest, and factual evidence debate. Not sure why you choose to beat up on the Alderman and Ms. Heslop. How long are you going to beat the Darlene dead horse?
Tommy, the York Kool Aid Drinker August 17, 2012 at 04:43 PM
I win. Tif 1 has lost millions? Really? The EAV in Tif 1 is up 4-5X since the Tif was established. Nowhere else in town is that true. I've been here 24 years myself and clearly remember when downtown was a ghost town. There isn't a person in town, besides you, your sock puppets and a few other people who believe Tif 1 is anything but a colossal success. All of the parcels of land released from Tif 1 early have created a windfall of (annual) cash for the schools and parks. You claim the losses are documented, prove it. You can't, because it is not true. And for part 2, I want to make sure I get your wording exactly correct. "Northside revival? Dude, I'm here like over 25 years. It is what it is with very successful businesses along the stretch." The absurdity of that comment is amazing. Name one succesful business in that stretch. There isn't a person in town, besides you, who believes that. Even Pezza and Bram, who wanted to establish Tif 4 and made the referral to the council to do it, don't believe that. Your response is all the evidence I need to expose you as nothing but an ignorant malcontent. Please, please, please run for office. With views like those stated above, you'd have no problem winning...a direct path back to your mom's basement and more time with your sock puppets. As for Heslop, I will continue beating that dead horse (your term) as long as she wants to keep spouting off about issues she is mentally ill equiped to handle.
Doremus Jessup August 17, 2012 at 05:53 PM
Better put some money aside for Jewel, just in case. Citigroup believes SuperValu will need to divest assets in order to fund its price investments, leading to a much smaller company in the medium- to long-term. Citi views Save-A-Lot and Jewel-Osco as the company's most attractive large assets, but highlights the challenge of finding buyers at good prices. The firm believes SuperValu's valuation barely covers its net debt and lowered its price target for shares to $3 from $4. Citi keeps a Neutral rating on the name. here is the link. http://finance.yahoo.com/news/supervalu-needs-asset-sales-fund-101628564.html
Darlene Heslop August 18, 2012 at 04:07 AM
tifs only work when property values (as in eav) increase...which...at the present time...they are not...this is a fact...not an opinion. the 1.25 million is going to the developer of the property, not to mariano's (fact, not opinion) and the developer has contributed to the county board campaign of mayor dicianni (fact, not opinion). the original proposal as outlined by aldermen pezza and bram did not include the hahn street properties...which...not only have both of those alderman stated they are against this latest proposal which includes these properties, but others as well (this is a fact). as for mariano's...the projection by the city is that the 1.25 million (not including interest) should be paid back (this is from the city, not me) in approximately 10 years, not 2 years as you have stated...that is assuming that they remain in business that long, which there is no way of knowing if this will happen or not (a crystal ball no one has, not even you mr. kool-aid drinker). as for development, i'm all for the right kind of development and the right kind of incentives...there are other ways to encourage investment in this city without the creation at this time of this tif, in particular with the inclusion of the hahn street parcels. and really...continually bringing up the election actually makes you look like the fool, not me...i ran...i lost...i learned a lot...and i moved on. i suggest that you do the same.
Tom August 18, 2012 at 02:59 PM
And now Tinkerbell proves my point. You don't understand how TIFs work, the Marianos deal and you are blinded by your hatred for Pete. First, EAVs do not rise and fall collectively. Some parcels EAVs go up, and when they do, the increment makes money. Some parcels EAV goes down, no affect on the TIF or increment, and some parcels stay the same, no affect on the increment. The minute Marianos builds and get occupancy, that EAV goes way up and the increment starts making money to help pay for future development. The same is true for any other parcel. The TIF will generate funds. Of that, there is no question. Regarding Marianos, understand the discussion Darlene. Right now, that blighted parcel is generating property tax but no sales tax. Once Marianos is built and starts selling things, generating new tax revenues that aren't there now, the city starts generating a new source of revenue. That new source of revenue will pay for the $1.25MM within an estimated 2-3 years by itself. After year 3 (or sometime in year 3), the sales tax generated becomes the cash gnerator mentioned previously. I know it's difficult to understand all of the inner working of TIF and development, that's why I suggest you leave them to the serious people. But, knowing you, you and your cabal will continue clouding the issue with mis-statements while taking every chance you get to make Pete look bad. Yes, you did lose. Understand there is a good reason for that.
Jennifer DeBosschere August 19, 2012 at 02:42 PM
I have lived on the North side of Elmhurst and we do need a revival. Mimmo's is now gone, as well as my seeing a few more new vacancies in that mini mall. The waterpark hotel has gone downhill in the last 10 years. And the sight of all those empty former car dealerships...please. On the positive side, the fast food restaurants, Nancy's, Christophers and some great salons are still looking great but Marianos would be a huge draw. With it's reputation, maybe it wouldn't draw all of the Oakbrook crowd but what about the Roselle, Itasca, Bensenville and naturally Elmhurst families?
Bill Angel August 19, 2012 at 05:04 PM
PS, well stated, That guy needs to take off those rosey shades! I have a sneaky suspecion "TOM" is a real close political operative of Petee. 95% of TIF 1 properties would have increased EAV without a TIF. "Hahn Street" is and will be a huge money loser for the taxpayers. MILLIONs of lost dollars will never be recovered. If you follow the time line and follow the money, you will see crystal clear that Mariano's was coming to the Ford location way before any TIF 4 was even discussed. Any good prosecuter could easily build a case for influence peddeling and pay to play. It's right out of the Chicago playbook. "Tom" is clueless in understanding TIF law, TIF requirements, market conditions, government finance, sales tax revenue, etc. That said, I welcome an honest debate. It's very obvious and apparent "Tom" has some sort of crush on Darlene. "Tom" also bashes Alderman Pezza. They are both strong women. See "Tom's pattern?
Darlene Heslop August 20, 2012 at 04:40 AM
i agree that the north side of elmhurst does need assistance in development, creation of a tif district is not the only way to encourage investment. contrary to what "mr. koolaid" (it is so much easier to criticize when not burdened with using your own name...), the projections by the consultants hired by the city of elmhurst to evaluate the proposed tif district stated that the 1.25 million (less interest) was to be paid to the developer of the property (which is not mariano's...they will lease the space) and will take approximately 10 years to pay back the principle...not including the accumulated interest. as for the eav...i should be more specific so that mr. koolaid drinker knows that i indeed understand tifs...while some properties my indeed see an increase in their eav, if the majority are losing value, then the "net effect" needs to be positive in order for the tif to be successful and profitable for all concerned...everyone from the tax payers to the business owners themselves...which...even with the "sudden winfall" of the mariano's property...does not make the rest suddenly begin to increase in value...especially when the market trend is still negative. i have no problem with finding alternatives to making sure that businesses have the necessary means to be successful in this area of town, however, there are other ways for the time being, until the market begins to improve, than putting in a tif district.
Darlene Heslop August 20, 2012 at 04:55 AM
i agree with mrs. d. on her current assessment of the situation. however, demographically speaking, bensenville, addison, melrose park, berkely, villa park, franklin park, etc. would not be the types of shoppers who would frequent a store like a mariano's...they would be more likely to shop at a super walmart than a mariano's. as for elmhurst...it remains to be seen as to how many people will make the trip to the far north side of elmhurst, especially those that live south...who actually can make a b-line to whole foods in willowbrook or westmont on route 83. again, market conditions setting up to be what they are projected to be in the near future...even basic staples like milk, bread, butter, anything made with corn or wheat, are experiencing increases...not to mention just the cost of gasoline, so consumers are going to be even more cost-conscious than ever before. both walmarts in villa park and in melrose park have expanded their food selections...even putting in a fresh bakery. the success of mariano's will not depend upon the residents of elmhurst, but instead, will depend upon drawing significant numbers from outside the 60126 zip code.
Darlene Heslop August 20, 2012 at 05:01 AM
ms. peggy..., i agree with your assessment, especially regarding the comparison to tif 1. mr. angel, thank you as well for your commentary, as you bring a unique perspective to all things elmhurst... .
Darlene Heslop August 20, 2012 at 05:13 AM
as for my ability to understand tifs, business in general, or anything else that mr. koolaid seems to feel i don't or can't because of my "hatred of pete"...here's a newsflash for you and everyone else...i don't hate pete dicianni. never did, never will. you may hate me...he may hate me...mr. hipskind and company may hate me (even though he would have lost his re-election had i withdrawn from the race)...you and everyone else in this town may hate me...but i don't hate anyone...life is just too short...and i don't allow my personal feelings for anyone get in the way of my ability to seek out the facts...and pass them along.
Thomas Cruse August 20, 2012 at 03:54 PM
Darlene, I think that you are doing a great job of discussing important topics for us. It is the citizens of Elmhurst and taxpayers who are the important individuals in this town. Thanks, Tom Cruse
Thomas Cruse August 20, 2012 at 03:57 PM
Dear citizens of Elmhurst, I think that the last TIF process is moving too fast. We do not know if the city's projections will pan out and we are stuck with higher property taxes than we are now paying. I am for development but we also need to focus on cutting city expenses and salaries. The village of Winfield is exploring disbanding the poilce department and hiring a security service to save money. Perhaps we should explore this option. Tom Cruse
Tom August 20, 2012 at 04:43 PM
Hey Billy in Mommy's Basement, too bad neither Darlene nor Paula are African American or Jewish, you could also hint that I'm a Jew hating racist too. Are you a woman? I'm doing a pretty good job of exposing you as an ignorant malcontent on top of exposing Heslop and Pezza for their hypocracy. I'll go after any person (man, woman, race, color or creed) who tries to pass off their beliefs as fact. With you, I take extra pleasure because on top of your ignorance, your a complete fool. Get back to your sock puppets, they miss you.
Dan August 21, 2012 at 03:33 AM
The Illinois Policy Institute has an interesting report on TIF districts called Tax Incremental Financing - Hidden in plain sight. One of the things they point out is a study that found that "municipalities that use TIF do not grow more rapidly and perhaps more slowly than municipalities that do not use TIF. Their study specifically found property values in municipalities adopting TIF's grew at the same rate as or even less rapidly than the non TIF adopting municipalities."
RobertAWilson August 23, 2012 at 12:41 AM
Why no follow up on what happened during the city council meeting?


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