Hoffman Estates approves new TIF district
Hoffman Estates’ Barrington Square Town Center, which has struggled to gain new businesses after a Menards left in 2008, was turned into a tax increment financing district Monday by the village board.
The 33-acre TIF consists of 10 parcels of land and three buildings, including a McDonald’s, a Buona Beef and the Barrington Square Mall. It does not span north of Hassell Road or include any nearby residential properties.
A few reasons the area was deemed a good candidate for a TIF included the age of some of the buildings, a lack of growth in the equalized assessed valuation and a state of deterioration. Also, it was unlikely to be redeveloped without help from the village.
In establishing a TIF, the hope is that new development or redevelopment will increase the tax base, which over time would generate additional property taxes. The property taxes are directed to the TIF increment fund, providing the developer an incentive to redevelop.
Tax rates for residents will not increase because of the new TIF district. Instead extra property taxes from growth will go toward paying for some development costs rather than going to various taxing bodies — which in this case include Schaumburg Township District Library, Schaumburg Township, Hoffman Estates Park District, school districts 54 and 211 and the village. In February all those taxing bodies unanimously recommended creating the Barrington Square TIF, which brings the number of TIFs in the village to three.
The Barrington Square Town Center redevelopment will occur in three different phases. The first is already complete, and the village has determined that $2.7 million of TIF-eligible costs have incurred to date.
The second phase, which is expected to begin within 180 days and be completed within two years, will include construction of stormwater detention and parking area improvements.
The creation of new retail space on various portions of the site, also called “vertical” development, will occur in the third phase. There are six specific improvements the developer can do in phase three that will qualify them to receive reimbursement from TIF funds.
They include: a new facade on the remaining structure, an expansion to the existing McDonald’s or a new McDonald’s with greater square footage, a new restaurant or retail space on the former Burger King site or adjacent to Buona Beef, new office space between the bowling alley and the detention pond, new retail on the south end of the former Menards site, and new office space on the north end of the former Menards site.
Some trustees mentioned Monday that they would like one of the new retail businesses to be a hardware or grocery store.
The TIF agreement specifies that the developer will be reimbursed for up to 30 percent of the total project costs that they have spent out-of-pocket. That reimbursement is capped at a total of $9 million over the 23-year life of the TIF.
The village will reimburse up to $6 million of infrastructure costs incurred in phase one and phase two. The developer can receive the extra $3 million if they construct new retail, restaurant and office space that falls under the six qualifying uses.
TIF revenues will be split annually, with 50 percent going to the developer and 50 percent to the village. All the revenues must be used for TIF-eligible costs. The village also receives $10,000 annually for staff and administrative costs.
The village will initially use its portion of the revenues to pay off costs from the Barrington Square lift station rehabilitation project and later to pay any other eligible costs, such as Hassell Road reconstruction for the area in the TIF or a new traffic signal on Higgins Road at the main entrance of the center.