Elmhurst officials are moving forward with plans to establish a new tax increment financing district in the downtown area, but they have encountered resistance from District 205.
The unit school district cast the lone vote against the proposed TIF district at a joint review board meeting last month, Mayor Steven Morley said Monday.
“We stand ready and willing to answer any questions,” Morley said of the school district’s hesitance.
At the January meeting, school board President Shannon Ebner sought to discuss with city officials the proposed TIF district’s monetary affect on the school district.
“The city’s plans will have a significant financial impact on the district and its taxpayers for at least the next 23 years,” Ebner said in a statement Tuesday.
City and school district officials have begun meeting about the TIF district and plan to focus on identifying its fiscal impact on District 205 and how to mitigate that impact, Ebner stated. The school district hopes to see the talks completed before the District 205 Board meeting Feb. 27.
“I really do hope we get to a resolution,” Morley said after Monday’s City Council meeting.
Sixth Ward Ald. Michael Honquest expressed frustration regarding the school district.
“I think they ought to work at doing a better job of getting along with the city,” he said.
District 205’s specific concerns include the status of payments due under a 2004 agreement that allowed the extension of the city’s existing downtown TIF district, according to a statement given by Ebner at the review board meeting. The school district is also concerned about financial considerations proposed by the city for District 205 under the new TIF district
Ebner’s statement at the January meeting also questioned the legality and eligibility of the proposed TIF district.
The review board includes representatives of all taxing bodies in the district, including the Elmhurst Park District, DuPage County and York Township. A majority approval by those taxing bodies is needed to proceed with a TIF district, so the project will continue, said City Manager James Grabowski.
Tax increment financing allows towns to spur development of blighted or underused property by freezing tax payments to all taxing districts. Growth in property taxes — the increment — goes into a fund that can be used for land acquisition, infrastructure improvements and other qualifying development costs.
City officials are seeking to end the existing 35-year downtown TIF district three years early and replace it with a slightly smaller TIF district covering the city’s central business area. The proposed TIF district would include Hawthorne School and the District 205 administration building.
Estimates indicate the new TIF district could begin with an equalized assessed value of less than $26 million and grow over its 23-year life to a value of $75 million to $95 million, according to city consultant Kane, McKenna and Associates.
However, by abolishing one TIF district early and replacing it, the city is essentially creating a 55-year TIF district, which “far exceeds the statutory time limitations on the existence of any TIF,” according to Ebner’s review board meeting statement.
“This appears to be contrary to the TIF statute and to Illinois court decisions which bar municipalities from doing indirectly what they cannot do directly,” the statement reads.
District 205 also questioned whether the proposed TIF district meets the appropriate criteria.
According to city documents, the TIF district would qualify as a conservation area, based on the age of its buildings. Of the 13 eligibility factors a possible TIF district may meet to qualify — at least three of which must be met — the property in question meets five: obsolescence, deterioration, inadequate utilities, deleterious layout and lagging or declining equalized assessed value, city officials said.
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The next step for the city is a public hearing to be held at the March 5 City Council meeting. The hearing will be followed by a vote at a future meeting of the council, Grabowski said.
The school board plans to develop a position regarding the TIF district at its Feb. 27 meeting, which it will then voice at the hearing in March, Ebner said.
Anna Bybee-Schier is a freelance reporter for Pioneer Press.