St. Charles mayor candidates cautious about use of incentives

The recent history of business and development projects in St. Charles is a mixed bag of incentive packages designed with the promise of future tax dollar advantages for the city. But not even one of the four candidates for mayor thinks officials have done a great job in brokering those deals.

The city council has often been divided about the quality of these deals. Some have sailed through, such as a $250,000 sales tax rebate plan to bring US Adventure RV to town. Others have only barely received approval after eleventh-hour maneuvering, such as with the $5.6 million pay-as-you go incentive package for the Lexington Homes project that will now occupy the former Applied Composites site. And other deals have imploded in the final vote even after years of negotiations, such as the failed Corporate Reserve plan.

Jotham Stein has long been a critic of the city's negotiation tactics. In a recent editorial board interview, Stein said the city has a tendency of offering new businesses way too much, way too early when trying to cut a deal. He also believes incentive packages for residential housing projects is a waste of money in the current climate.

“The city has a lot of vacant residences now that should be filled before residential incentives are even considered,” Stein wrote in a candidate questionnaire. “The city should focus on attracting businesses, which will bring vitality to our community and raise property values for all of us.”

In that realm, Stein bills himself as the only person who is willing to fly out to California, on his own dime, to facilitate a true relationship with the owners of the Charlestowne Mall.

Alderman Ray Rogina was in the minority when he voted against the Lexington Club project. But he didn't do it because he opposes the use of incentive packages. In fact, he even favors the kind of pay-as-you go TIF usage the Lexington project received. Rogina just thinks the city could have gotten a better deal.

Redevelopment of Charlestowne Mall is an area Rogina believes will require some form of incentives. Likewise, his vision to use the Arcada Theatre as cornerstone for the creation of a downtown entertainment area that focuses on the arts may involve some incentives if appropriate.

“From a purely economic perspective, benefits to the local and broader regional community must outweigh the costs of incentives,” Rogina wrote in a candidate questionnaire. “But for the incentive, will the proposed development fail to materialize and thus impact the economy negatively? How accurate are projected revenues as an offset to clear costs? If a TIF, what kind? What risks?”

John Rabchuk is the only candidate who is a fan of the Lexington development and the incentive package its developers received.

“A pay-as-you-go TIF structure has significantly less risk to the financial health of the city than the use of a debt to pre-fund the incentive,” Rabchuk wrote in a candidate questionnaire. “The city must take an aggressive approach of internally analyzing and understanding what types of tools, including financial incentives, that it realistically has at its disposal and the limitations inherent to the overall financial health of the community.”

During the editorial board interview, Rabchuk said the use of TIFs are a necessity to keep would-be developments from going to other communities. He pointed out Geneva Commons was originally supposed to be a St. Charles development before city officials balked at too many of the requests the developers put forth.

Rabchuk envisions the use of incentive packages to lead a youth movement in St. Charles. He wants more rental housing of a quality that would attract young professionals to the city. “On any given day, I'm the young person coming out of the Blue Goose market,” Rabchuk pointed out. “That's a problem.”

With the right housing and a mix of youthful cultural events and the establishment of the city as a major attraction for cyclists, Rabchuk said he can see St. Charles becoming a “Lincoln Park West” destination for younger residents.

Jake Wyatt also believes financial incentives can be an excellent tool to attract business to the city. The money the city has pumped into the stalled First Street development is an example of what not to do. Wyatt said he only supports pay-as-you-go TIF structures for future development because First Street, in his opinion, has not delivered any payback to the community. Officials have to know not only what a deal is worth for the city before incentives are used, Wyatt said, but they also have to pinpoint when the return on their investment will occur.

“This is a business transaction with an expected payback period,” Wyatt said in a candidate questionnaire.

Indeed, Wyatt envisions the bulk of any incentive package working more as a loan with very agreeable terms to the developer rather than just a gift of upfront cash that may or may not ever be paid back.

Wyatt would rather see 10 small businesses come to the city rather than one large business with a limited tax base. That could take the form of a mix of restaurants, bar and grills, coffee shops, retail shopping and enhancement of existing movie and live performance entertainment venues in the downtown, he said. Wyatt is also not opposed to more residential development if existing neighbors agree to it.