School Board Member: 'District Cannot Afford Any Loss of Short-term Revenue'

If all goes as planned, creating a tax increment financing district will be the tide that raises all boats–from the city to parks to schools. But even if all goes as planned, this economic development tool requires some sacrifice along the way.

As Elmhurst ponders leaders of Elmhurst Unit School District 205 want to be able to share in the benefits of redevelopment as soon as possible.

Elmhurst officials, including Mayor Pete DiCianni and City Manager Jim Grabowski, told the School Board Tuesday night that the city's three current TIF districts have benefited all residents and taxing bodies. These areas, which include downtown, an area between Lake Street and Interstate 290, and the northeast corner of Route 83 and St. Charles Road, would not have been redeveloped without the incentives offered by a TIF, city officials say.

Two areas under consideration for new TIF districts, including North York Street between North and Grand avenues and parcels around York and Vallette streets, are in the same state. A third area the city is considering for a TIF, around Riverside Drive, has no property on the District 205 tax rolls.

To create a TIF district, the city sets a base value for the property involved and then freezes taxes at that level for all taxing bodies. The growth in the value of the property over this base value is the increment, which goes into a special fund for 23 years to make additional investments in the area.

As school officials pointed out, once redevelopment starts, the city can often start raking in new money from sales taxes. Other taxing bodies that rely only on property taxes have to wait for the TIF to expire to see the new growth reflected in the area's assessed valuation.

“This district cannot afford any loss of short-term revenue,” said board member John McDonough.

He asked if the School District could start sharing in any income flow more immediately. The precedent for this already has been set by the city; officials have been distributing revenue from growth in the Route 83-St. Charles district since its inception, including a total of more than $524,000 to District 205.

Other options to make any new TIF districts more immediately beneficial to District 205 would be to release parcels as they are redeveloped. This also has been done before when the city released nine parcels from the downtown TIF.

McDonough stressed that all taxing bodies wanted to see underperforming areas of the city generate more tax revenue.

“The questions is how much and in what way,” he said.

Grabowski said although the city was taking preliminary steps to research three more TIF districts, it is months from any decisions.