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updated: 8/11/2011 5:09 PM

Kaneland opposes Sugar Grove redevelopment plan financing

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Count the Kaneland school district as naysayers about an incentive Sugar Grove is considering to spur industrial and commercial development near the Aurora Municipal Airport.

The school board this week spoke out against a proposed tax-increment financing district. "Our district can't support it," Superintendent Jeff Schuler said. He and several school trustees will make that position known at Tuesday's public hearing about the proposal.

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Sugar Grove this summer has been studying establishing an 1,800-acre TIF district to provide incentives to get businesses building. The district is roughly bounded by Route 30, Harter Road, Esker Drive and Dugan Road. It estimates 787 of the acres are developable, and 290 could be leased, according to a presentation made by Teska Associates, a community planning firm. The rest is airport, two schools, some rights of way and other uses.

The TIF is referred to as an "industrial park conservation area." The land has been designated for industrial use for more than 20 years, and the village's Comprehensive Plan has a goal for it to become a business park and corporate campus. But there are only four businesses out there, besides the airport.

In a TIF district, a baseline equalized assessed value of the land is established, as are property taxes to various government bodies. Increases to the land's assessed valuation because of improvements and development would likely result in higher property tax collection. That extra tax money would be used to pay for the measures taken to improve the site. The district would be in force for 23 years, the maximum allowed by law, under the current proposal.

Sugar Grove officials think that using TIF money to assemble properties, install utilities and traffic signals, for example, could entice developers. The cost of doing so, depending on what exactly is chosen, is estimated at up to $128 million.

A Joint Review Board, made up of representatives from several taxing bodies, had been reviewing whether the land is eligible to be a TIF, and voted 5-3 July 25 that the plan is eligible.

TIFs were originally intended to help redevelop blighted areas. An industrial park conservation area TIF can be enacted if the town has a labor surplus, as well as vacant and blighted land in the proposed area. The labor surplus is determined by the unemployment rate in the town -- it must be at least 6 percent, and it must be greater than the national unemployment rate. In May 2011, unemployment was 9.6 percent in Sugar Grove and 9.1 percent nationally.

Kaneland officials believe the proposed district is too big, Schuler said. Only about 12 acres, where the current businesses are, are actually blighted, in Kaneland's estimation. "It is just too large. It doesn't leave the opportunity for economic growth," Schuler said.

Kaneland also doesn't like the 23-year period. If the goal of a TIF is to get industrial and commercial development in an area, so that the residential property tax burden is reduced, a 23-year wait isn't going to help the residential owners, Schuler said.

Thirdly, Kaneland doesn't believe it is fair to taxpayers throughout its district. Kaneland takes in students from nine towns, as well as unincorporated areas, from Montgomery to Maple Park. Freezing this property's taxes to the school district puts a burden on taxpayers from those areas, he believes.

Tuesday's hearing is at 6 p.m. at the Sugar Grove Village Hall, 25 S. Municipal Drive, followed by the board's regular meeting. The board could vote to approve the TIF that night.

Teska's presentation, the minutes of the Joint Review Board meetings and other documents about the proposal are on the village's website.

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