Geneva considers tax-based incentive for Mill Race Inn area
A property tax-increment financing district is one idea Geneva might pursue to spur redevelopment of the shuttered Mill Race Inn and other sites along the east bank of the Fox River, according to an informal discussion the city council had Monday.
The council gave economic development director Ellen Divita permission to keep working on the idea.
But they had some reservations.
“It would probably be the last tool I would favor,” said Alderman Richard Marks, although he admitted he needed to learn a lot more about such districts.
And Alderman Dean Kilburg said he would not support a TIF district that lasted more than 10 years, because he thinks they present financial hardships to other taxing bodies, such as school and park districts. Kilburg is a former school board president.
In a TIF district, the assessed value of property is frozen at a base amount, and property taxes paid on this base continue to go to taxing bodies. Any increase in taxes caused by an increase in the property’s value goes to a special fund to pay for whatever work made the property more valuable, such as buildings or improvements to road and utilities. TIF districts are supposed to rejuvenate blighted properties.
“This is a classic case of it,” Divita said about using a TIF to improve an area.
The Mill Race Inn property is too small to be its own TIF; state law requires such districts be at least 1.5 acres, Divita said.
She suggested that a TIF could extend up the east side of the river north of State Street, and along East State to meet another TIF district near the Aldi grocery store.
TIF districts can be set for up to 23 years, with a 12-year extension available from the state legislature.
Other “tools” the city has to encourage business include sales tax rebates, property tax abatements, reducing fees, and industrial revenue bonds, according to Divita.
Alderman Craig Maladra questioned whether the city really needs to offer incentives to get the Mill Race Inn site redeveloped. It closed in 2011, went into foreclosure, and is owned by a bank. It was substantially damaged by a 2007 flood of the Fox River, and its equalized assessed valuation has dropped by 60 percent since 2009.
Maladra said the closure came during bad economic times, that the city is pulling out of the recession, and that the council may be “making long-term decisions based on an experience that is an anachronism.”
“Every call about the Mill Race has asked about incentives,” Divita said.