Elmhurst City Council will vote soon to create a 4th Tax Increment Financing District
What May Have Started As A Good Idea Has Degenerated into a Justification for a
Boondoggle and has Become a Corrupt Political Process
What is a TIF district?
Tax Increment Financing (TIF) is a favorite government tool used to spur economic development in areas identified as legally blighted or underperforming. Elmhurst currently has three TIF districts and is considering a fourth to assist the north side of town.
How do TIF districts work?
City Hall provides developers and businesses with subsidies to lure them into town or to improve existing properties. At the most basic level, when a TIF district is created property tax revenues that are collected over a certain base amount are redirected to City Hall for its exclusive use within the TIF district for a period of 23 - 35 years rather than being distributed to numerous taxing bodies like the school district and park district. The diversion of property tax dollars away from the other taxing bodies and into the TIF district creates a TIF “piggy bank.”
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Wauconda Township officials don’t get it
Wauconda Township officials are having trouble understanding the basics of the laws governing public bodies and townships.
First, the purpose of the Open Meetings Act is to ensure that our elected officials discuss the business of our governments in open forum. According to “20% pay hike for Wauconda Twp. supervisor draws fire” on Aug. 2, the township supervisor met separately with each trustee to discuss the supervisor position’s pay hike. This resulted in a vote without discussion at the board’s last meeting.
Ostensibly, the supervisor met with trustees one at a time to discuss the pay increase so that the trustees dispensed with open discussion on the issue, deliberately thwarting the Open Meetings Act.
Secondly, Wauconda Township fails to understand the citizen initiative and referendum process as articulated in our state constitution at Article 7, Section 11, and further detailed in the Township Code.
Recently, a citizen in the township submitted a petition for referendum for inclusion on the Annual Township Meeting agenda. The citizen got the requisite 15 signatures and met the deadline. Yet, contrary to the Township Code, they failed to include the item on the agenda.
The citizen was forced to collect a second petition and garner assistance from our law office to convey to the township its obligation, a matter still pending before the township.
Not only do Wauconda Township officials misunderstand the law, they misunderstand their obligations. Rather than serving the residents of Wauconda Township, they serve themselves first.
Citizen Advocacy Center
City officials site success of previous Tax Districts
By Dan McLeister for The Independent
In speaking against approval of the N. York Tax Increment Financing (TIF) District, several citizens stated that market conditions are worse than the first three TIF Districts which City officials used as examples of what could happen with a fourth one.
Stephen Hipskind (4th Ward), chairman of the Finance Committee of City Council, said that property values had tripled or almost tripled in the first three TIF Districts.
Terry Pastika, executive director of the Citizen Advocacy Center (CAC), went beyond market conditions and accused City officials of “turning a good process into a corrupt process and creating a problematic situation. This process looks like gerrymandering properties so Hahn St. properties south of North Ave. can be brought into the N. York TIF Districts of properties along York St. north of North Ave. to Grand Ave. The City is privatizing profit and socializing costs,” the lawyer said in her contention that all property owners in Elmhurst will end up paying for the N. York TIF District.
At the August 6th public hearing, the CAC director also noted that the decision in July by the Joint Review Board of various local taxing bodies “was not an overwhelming endorsement” since representatives from School District 205 and the Elmhurst Park District did not vote for approval. “The Park District and the School District feel like their backs are against the wall and they felt cut out of earlier discussions about the N. York TIF. Now there have been closed door meetings to determine what the payout might be”
(Incremental property tax increases from improvements in a TIF District are kept in a special City fund for up to twenty three years before being released to other local taxing bodies like the School District, which get more than half of the property taxes, and the Park District. Some property tax money was released early in the first TIF District along York St. south of North Ave.)
(District 205 School Board President Jim Collins was in the audience at the August 6th public hearing, but he did not speak during the public comment period.)
In addition to saying that market conditions are different now than during the time the first three TIF Districts were started, resident Tamara Brenner contended that the City “was moving fast” with the N. York TIF District. After City officials mentioned the possibility of a final action vote in two weeks, she noted that the TIF District Act from the state allows up to ninety days for local governments to make a decision.
Also, Brenner said she would like to know about the information behind the assumptions by the consultant to the City that property taxes could grow to $105 million to $150 million in twenty three years. Neither a representative from Kane McKenna nor any City officials gave details about the assumptions.
Finally, Brenner wanted to know how much discussion there had been in City meetings about alternative methods of financing such as a special sales tax district to finance improvements, instead of a TIF District.
Another resident, Craig Nelson, also urged the City to “slow down” and pay off bonds for the first three TIF Districts. “Currently the commercial real estate market is in disarray.”
Mentioning a specific situation, an attorney for the owners of Hamburger Heaven on the southeast corner of North Ave. and York St. noted that his client was concerned about the possible elimination of his business. John Skoubis noted “Hamburger Heaven has been an icon for decades in Elmhurst.”
(It is not clear what would happen to Hamburger Heaven if properties on York St., south of North Ave. including nearby Hahn St. land parcels were voted by the City Council to be included in the N. York TIF District.
The owner of Wendy’s restaurant on the north side of the proposed District, stated that he was against the project because taxes are already too high.
An overall statement was made by resident Claude Pagash. “If the District does not work out, then the public will be stuck paying any City obligations. I don’t’ like the idea of residents being on the hook.”
One resident questioned the validity of the public hearing, considering TIF 4 already was approved in committee last month.
Elmhurst Patch By Carol Kania Morency
Elmhurst may already have three mostly successful tax increment financing districts in town, but that is not enough to convince residents at a Monday public hearing that the city needs a fourth.
The hearing, which is required by law as part of the process for a municipality to create a new TIF, was a chance for residents to have their say about the new redevelopment district slated for a 1.8-mile stretch along North York Road. Most of the speakers were opposed to the project, and they posed many questions to the City Council.
TIF districts freeze assessed property values for local taxing bodies for up to 23 years to encourage redevelopment in areas considered blighted. TIFs generate new revenue through new construction in the TIF district, or if the township assessor increases the assessed value of the properties in the TIF district. The difference between the frozen property value and any new assessment or growth goes into a TIF fund. The city then uses this money to pay for any public improvements or to help finance redevelopment projects in the district.
The proposed new TIF would begin at the Hahn Street property, just south of North Avenue, and continue north to Grand Avenue. It would include the new Mariano's property at York and Industrial Drive, as well as the former Steven's Steakhouse and other vacant businesses.
According to Robert Rychlicki of TIF consultants Kane McKenna and Associates, the equalized assessed valuation for the North York TIF would likely be set at about $32 million. The TIF is projected to generate up to $150 million after $89 million in public and private development.
Rychlicki reviewed the results of the city's three current TIF districts. The City Centre TIF was created in 1986 with an EAV of $21.65 million and in 2011 had an $85.3 million assessed valuation. The Lake Street district began in 1993 with a $4.57 million EAV. In 2011, the same properties recorded a $16 million EAV. And the district at Route 83 and St. Charles Road was created with a $4.35 million EAV in 1996 that grew to a $12 million assessed valuation.
But most of the speakers at the public hearing had serious concerns about a fourth TIF.
“Everybody pays for the TIF,” said Terry Pastika, attorney and executive director of the Citizen Advocacy Center in Elmhurst. “You are privatizing profits and socializing the cost of development.”
Pastika said it was the inclusion of properties south of Interstate 290 that made the project problematic. She accused the city of stretching the district south to North Avenue just to be able to include Hahn Street, which is part of a previous redevelopment project planned by Morningside Group. Morningside, citing a sagging economy, was let out of its obligation to develop Hahn Street earlier this year. Hahn Street currently "lives" in TIF 1 and would be moved to TIF 4, adding 23 years of frozen valuation to the property. TIF 1 is set to expire in nine years.
Resident Tamara Brenner posed a series of questions to the council: Is creating a new TIF district the only way to offer incentives to businesses? Is it a good idea to establish a TIF district in this economy? Why was the city having a public hearing after the Development, Planning and Zoning Committee recommended approval of the TIF at its July 9 meeting?
Brenner also is dismayed at the quick pace of the movement to create the fourth TIF.
“This has moved along as fast as humanly possible under the TIF act,” she said.
The city has to wait at least 14 days after the public hearing to approve the establishment of the district. The DuPage County clerk will set the EAV for the properties after the ordinances creating the North York district are approved.
Government treats FOIA as a suggestion, not law
7/31/2012 9:17 PM - Letters to the Editor - The Madison St. Claire Record
To the Editor:
On September 26, 27, and 30, 2011, I filed three requests for public documents to the Village of Caseyville through the Illinois Freedom of Information Act. I was simply wanting to see a contract to a public works project that was funded through a county grant. Little did I realize what I would have to personally endure for exercising my rights as a citizen. But as I often hear from veterans, "Freedom is not free."
The documents I requested were pretty mundane in nature, but asking a few harmless questions touched off a firestorm in the Village of Caseyville. The first surprise I received was having an obviously angry village trustee follow me out onto the parking lot and without my consent, start photographing me as I left. I was then unfairly labeled a recurrent requester, a designation I came nowhere close to deserving. Then came the assertion that my requests were unduly burdensome.
While it would have been easy to give up. I have to admit that the village trustees' attempt to intimidate me after filing my second document request, did stiffen my resolve. Instead of giving up, I made the decision to take my cause to my fellow citizens and began speaking to taxpayer watchdog organizations.
In February 2012 I received a favorable determination from the Illinois Attorney General. I thought the battle was over. It was not.
The village attorney had known something all along that I did not. The only way I would be able to force compliance was to sue the village in circuit court. So in essence, the only way a citizen has real access to public documents is if they have the money to sue. In my case, I was fortunate to have a lot of public support from other like minded citizens. Citizens who volunteered to pay my legal fees to pursue a municipality in what we all considered willful and intentional violations of the law.
To that end, I have come to the conclusion that the Freedom of Information laws are great "window dressing" for politicians, but the reality is that these laws are mere suggestions to public officials unless a citizen is of significant means and is able to pay to have the law enforced.
So comes the question: Does the average citizen really have access to public documents? My answer is no. My now, very educated opinion is that until criminal provisions are put into place, government entities will continue to treat The Freedom of Information Act like a "suggestion" instead of a right to every citizen.