Arlington Heights is a step closer to redeveloping the Hickory Kensington area, after representatives from area taxing bodies on Wednesday approved establishing a new tax increment financing district to help get it off the ground.
On Wednesday, representatives of District 25, District 214 and other taxing bodies that would be affected by the redevelopment met to approve the village's plans to create a TIF district in that area.
It was the next step toward a proposed redevelopment of a 35-acre area southeast of downtown Arlington Heights that is primarily made up of older, industrial buildings.
While the area is not considered blighted, it qualifies for a TIF district under a "conservation" requirement because all of the buildings are at least 35 years old, are deteriorating, have inadequate utilities, and are lagging in value, said Bob Rychlicki, executive vice president of Kane, McKenna, the firm handing the TIF district for Arlington Heights.
If a TIF district is approved for the area, property tax disbursements from those properties to local governments would be frozen at current levels for 23 years, the life of the district.
Any additional revenue generated by the redevelopment would go into a special village fund to be reinvested in the project -- in this case mainly infrastructure updates.
Officials say the redevelopment fits into the village's long-range plans and would benefit the entire community over time.
The equalized assessed valuation of the area in question has fallen dramatically since 2007, when it was at $15.2 million, Rychlicki said. In 2012, it was valued at $9.6 million.
Village officials anticipate the value could be driven to between $30 million and $40 million by the redevelopment.
According to the Hickory/Kensington Area Plan approved by the village board in 2012, the redevelopment would create "a vibrant, mixed-use neighborhood which complements the downtown area, providing new housing and commercial opportunities in a walkable, pedestrian-friendly environment."
"The reason for the TIF is to create a financial incentive to develop the area because otherwise we don't believe development will happen," said Bill Enright, deputy director of planning and community development.
Voting in favor of the TIF district at Wednesday's meeting were: Tom Kuehne, village finance director; Stacey Mallek, assistant superintendent for business at Arlington Heights Elementary District 25; Cathy Johnson, associate superintendent for finance and operations at Northwest Suburban High School District 214; Steve Scholten, executive director of the Arlington Heights Park District and resident member John Ciffone.
Representatives from Wheeling Township, Harper College and Cook County did not attend the meeting.
Final approval is up to the Arlington Heights village board.
Even as District 214 voted yes, school board President Bill Dussling told the group his board is concerned there are too many TIF districts in the eight towns that feed students into the district.
Dussling said having property tax levels frozen pushes more of the burden onto other residents of the district.
"We prefer that development happens without the TIFs," Dussling said. "But we understand the process."
The estimated cost of the Hickory Kensington project is $35 million. About $12 million of that is expected to be spent on land acquisition and business relocation costs, $9 million on utility improvements (replacing water and sewer systems more than 60 years old), and $5.5 million on demolition and environmental remediation on sites that may be contaminated due to former industrial use, according to village documents.
Water detention will also need to be part of the plan and could include building a vault under part of Recreation Park to alleviate flooding, Enright said. Costs for such a vault, if approved by the village and park district, could be $2 million to $3 million.
Enright said there are between 30-35 property owners who would be affected by the redevelopment.
The village held a preliminary meeting with property owners in the Hickory Kensington area on April 2, and there will be further meetings if the TIF district is approved.
"We haven't had any phone calls or emails objecting to the TIF," Enright said.
The village will hold a public hearing over the TIF district on June 11. The village board can vote to approve the district anytime between 14 days and 90 days after the public hearing.