Lake Zurich Unit District 95 officials are mulling whether to support village government's request to extend the life of a special taxing zone that was enacted to ignite downtown redevelopment.
What's called a tax increment financing district has been in place since 2002 in an effort to attract downtown Lake Zurich redevelopment. The special taxing zone is supposed to expire in 2025, but the village wants to extend it 12 additional years so it does not have to contend with balloon payments on debt.
Commonly called a TIF, that's where property tax revenue is frozen at a certain amount and any additional revenue goes into public improvements rather than to local governments such as District 95. Officials at schools and other taxing agencies often voice concern when a village wants a TIF to attract development because of a resulting revenue loss.
In remarks to the District 95 board Thursday night, Lake Zurich Mayor Thomas Poynton said a lack of development downtown means it's difficult to pay off debt associated with the TIF district.
"It's been less than successful in developing downtown," Poynton said.
District 95's support would help Lake Zurich's effort to the special taxing zone, officials said. Illinois law requires a town to make its TIF extension request to the General Assembly, which Poynton said Republican state Rep. Ed Sullivan of Mundelein likely would do in the spring session.
While District 95 board member Doug Goldberg said the school system is willing to support the village's request, he said a formal agreement between the parties would be necessary. He said the district needs to ensure it'll continue receiving proper payments from the village for students in homes that were built in the TIF areas.
Lake Zurich has about $28 million in outstanding debt associated with the long-stalled downtown redevelopment.
Village Manager Jason Slowinski told District 95's board that annual repayments for downtown will balloon in the budget starting May 1, 2015. He said if the TIF isn't extended 12 years past the original 2025 expiration to "even out" debt repayment over a longer time, the village would be forced to cover its loans from the general fund.
Poynton said Lake Zurich about $16 million of the $28 million debt is attributed to property purchases within the special taxing area, but he said its current worth is unknown.