It's been six years since Wickes Furniture closed on Dundee Road in Wheeling. The village bought the land for $3.7 million, intending it to anchor an ambitious, $100 million project to give Wheeling its first downtown. In anticipation, the village set up a tax increment financing district and cast about for an interested developer.
Unfortunately, the real estate market went south shortly thereafter, but now, at last, the economy has picked up enough to give the village a good chance at getting its Town Center off the ground. Its developer, Urban R2 of Chicago, has an anchor tenant lined up -- Flix Brewhouse, a combination eight-screen cinema, restaurant and brewery. If all goes well, luxury apartments and other retail stores will come online by late 2016.
It's wonderful that Wheeling wants to develop something of this size and importance. Besides being an anchor for the community, the project would entice residents to shop close to home and bring in outside dollars as well.
One factor troubles us. The concept is built on the revival of a moribund tax increment financing district at the old Wickes property that the village dissolved last year. Monday, officials opened up a new TIF district in the same place, primarily to take advantage of the drop in value the property has undergone since the original TIF was set up, making the new TIF less costly.
That's good for Wheeling, but not so much for the other governments that now get less from property taxes on the Wickes site. Who will make up the difference? Taxpayers, at least until development takes off and begins producing the new revenues anticipated. That's the trade-off with every TIF. But this process -- like a similar TIF "reset" approved last week in Des Plaines -- also introduces something new: the potential TIF without end. Under this scenario, TIF districts could live on in perpetuity, being dissolved and re-established ad nauseam. Instead of encouraging towns to be prudent about when and where they establish TIF districts, this could potentially open up a whole new Wild West of speculation.
The last five years have been brutal for development. We don't blame Wheeling officials for wanting to start over at the Wickes site or Des Plaines for its efforts to kick-start areas that aren't performing as fast as officials hoped.
But the precedent this sets should not be taken lightly, in Wheeling, Des Plaines or any suburb. TIF districts are fine tools when used sparingly; they can provide redevelopment incentive for blighted areas badly in need, resulting in a win for everybody. But they place a burden on property taxpayers, especially when used to excess. Schools, park districts, libraries and other bodies have to make up the difference somewhere as their taxes are frozen once property is put in a TIF.
Our advice to communities contemplating TIF districts: Go slowly, and especially don't rush into new designs if old models don't produce revenue immediately. We want TIFs like those approved in Wheeling and Des Plaines to succeed. But they can't overlook the other agencies, and taxpayers, relying on their revenue.