In what officials called a bold step, Elk Grove Village trustees have approved a special taxing district that could generate nearly $900 million to help revitalize an aging business park.
The village board unanimously passed a measure Tuesday to create a tax increment financing district that will cover more than 900 acres on the east side of the village's business park, mostly through the Busse Road and Elmhurst Road corridors.
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TIF district planHere's a look at Elk Grove Village estimates of various possible TIF redevelopment costs.
Public works and improvements: $348 million
Rehabilitation of existing buildings, fixtures and leasehold improvements: $200 million
Property assembly including acquisition, site preparation and demolition, environmental remediation: $100 million
Analysis, planning, engineering, surveys, legal: $87 million
Financing costs: $75 million
Interest costs incurred by a redeveloper: $30 million
Job training, retraining, welfare-to-work: $10 million
Relocation costs: $5 million
Marketing costs: $5 million
Total: $860 million
Source: Elk Grove Village Busse/Elmhurst Road TIF Redevelopment Plan and Project by Camiros Ltd.
The TIF will spark redevelopment in an area of the business park suffering from outdated buildings, declining property values and vacancies, officials say.
The equalized assessed value in the boundaries of the TIF district has dropped more than 35 percent between 2007 and 2012, according to a report by a village-hired consultant.
"We're trying to take the bold step to one, stop it from sliding any further, and two, make it stronger (and) more viable for the future," Mayor Craig Johnson said Tuesday.
In a TIF district, property tax payments to all local governments are frozen at their current levels for up to 23 years. The village funnels any additional property tax revenues above those levels into a special fund that can be used to help pay for improvements to the area.
Opponents have argued taxing bodies such as school districts will have to raise taxes to keep up with inflation over the life of the TIF.
Elk Grove Township Elementary District 59 officials also have raised concerns that the district's tax burden could shift onto property owners outside the TIF boundaries.
But Johnson said school districts are already taking a hit from declining property tax revenues because of the drop in property values in the business park -- the area's primary economic engine.
If TIF district is successful, taxing bodies could stand to receive unneeded revenues before the end of the 23 years.
In recent years, the village has pumped such revenues to local governments though an existing TIF district that paved the way for the Elk Grove Town Center.
"Yes, some governments have abused TIF's," Johnson said. " ... We don't do that here in Elk Grove."
The village will now set parameters for the use of the TIF funds. The consultant's report has identified overhauls to the park's public utilities, infrastructure, water mains and sanitary and storm sewers.
The projects will help the business park -- a "golden goose" providing 82 cents of every dollar the village collects in taxes -- compete with Huntley's new industrial hub and one coming to Elgin, Johnson said.
"It just needs that push to unleash itself," he said.