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Palatine officials likely to approve new TIF district

The Palatine council sometime next month is expected to approve a new tax increment financing district aimed at spurring redevelopment in the area of Rand and Lake-Cook roads.

The village Monday night held a public hearing, the last required step in the process to establish Palatine’s fourth TIF district.

Among the objectives, Deputy Village Manager Mike Jacobs said, is to “reduce or eliminate the conditions that qualify the district as blighted, help strengthen the commercial corridor along Rand Road (and) support commercial and residential development as appropriate along Lake-Cook Road.”

An eligibility study determined that throughout the 110-acre area, 41 percent of parcels are in deterioration and 84 percent have inadequate utilities. The overall equalized assessed value has decreased four out of the last five years, while the remainder of the village saw either smaller drops or increases in value. Other qualifying factors were deleterious land use and layout, as well as a lack of community planning.

Municipalities use TIF districts as a tool to provide developers with financial incentives. As property values rise, TIF districts capture additional property tax revenue that can be used to fund improvements within the district, rather than go to local governments.

One criticism of TIF districts is that they divert money from other taxing bodies such as school districts, but officials pointed out that the Joint Review Board, consisting of representatives from the 10-plus local taxing districts, last month unanimously recommended approval.

“It’s really capturing the money that redevelopment creates,” Jacobs said. “It’s not taking away from existing properties.”

A couple of concerns arose from residents and business owners who attended the public hearing, including the possibility that unwanted development would result from the TIF district. But officials assured that zoning won’t change without a review process, meaning a developer couldn’t build an apartment building in an area currently limited to single-family homes.

Palatine officials said that based on future revenue estimates, they expect $20 million will be budgeted for property assembly and site preparations, with another $6 million going toward public works improvements.

Two other TIF districts near Rand and Dundee roads have generated more than $9 million in surpluses that have been redirected to the local taxing bodies. Development in the downtown Palatine TIF district has struggled comparatively.

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