Maine Township School District 207 hopes to benefit from a plan aimed at stimulating new development on five acres of vacant land in Des Plaines.
Maine Township School District 207 hopes to benefit from a plan aimed at stimulating new development on five acres of vacant land in Des Plaines.
Last year, Des Plaines officials approved a plan to split a tax increment financing district located on the northeast corner of Mannheim and Higgins roads into two, as part of an effort to erase a multi-million dollar deficit in the district and encourage new development on a section of unused, mostly city-owned land.
District 207 assistant superintendent of business, Mary Kalou, said a five-acre vacant parcel of land, located south of Pratt Avenue, was mostly to blame for running the district roughly $6.3 million into the red. With the city’s seventh special tax district now established, Kalou said District 207 hopes to receive a substantially larger number of property tax dollars once the 23-year lifespan of the tax district runs its course.
Municipalities generally create tax increment financing districts as an incentive to spur development in areas where it otherwise wouldn’t likely occur, she said. The assessed value of the properties within a tax increment financing district are frozen at a baseline assessed value, with the expectation that that assessed value will increase over the coming years.
The city and each school district that has a stake in the tax dollars generated from property — in this case District 207 and Community Consolidated School District 62 — will continue to receive tax revenue generated from the baseline value. Any increase in tax revenue above that is set aside to fund redevelopment projects, either public or private, in the area. In theory, once the properties are returned to the general tax rolls after the lifetime of the district has expired, both city and school districts are expected to receive a considerably higher number of property tax dollars from the area.
But in this city’s sixth tax district, which was established in 2001, the assessed value of the properties sunk below the baseline following the 2008 financial crash, ultimately creating a significant deficit, Kalou said.
As a result, District 207 received even less property tax revenue after 2007 than it had initially anticipated when the district was first established, she said. Additionally, there were no funds available to attract any potential developers of the site.
But a portion of the district was still thriving, despite the economic downturn, said Des Plaines city manager Michael Bartholomew in an interview with the Tribune last year. That portion includes a Starbucks, car wash, Potbelly Sandwich shop and Cafe la Cave.
Additionally, as part of the plan, a McDonald’s restaurant at the northeast corner of the district was returned to the city’s general tax rolls. Kalou said District 207 will benefit “minimally” from the extra tax revenue it expects to receive from that property.
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Under the plan approved by the city council last fall, all the other businesses will remain in the initial district, and the properties’ rising assessed values will ultimately pay off the deficit, Bartholomew said.
As for the remaining vacant land, the base value for the property has been reduced, effectively preventing the newly created district from incurring any more debt, and, as both District 207 and the city hope, ultimately attracting new development.
Kalou said she thinks the city’s plan to restructure the district “was their best long term strategy,” and would be the one most likely to benefit District 207.
“My line always is, ‘a TIF that works well, works well for everyone,'” Kalou said.