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.
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.