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posted: 8/29/2014 5:30 AM

Batavia school board questions need to extend TIF district life

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  • Cathy Dremel

      Cathy Dremel

  • Money from Batavia tax-increment financing district 3 will be used to help replace the downtown Walgreens. City officials want to extend the life of the TIF district 12 years.

       Money from Batavia tax-increment financing district 3 will be used to help replace the downtown Walgreens. City officials want to extend the life of the TIF district 12 years.
    Susan Sarkauskas | Staff Photographer, 2011

 
 

The Batavia school board is questioning why the life of a tax-increment financing district in downtown Batavia should be extended 12 years past its original expiration date.

"Can we get more information? Because otherwise it doesn't make sense to us," board President Cathy Dremel said Tuesday, when the board discussed the request from city officials.

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"I did find the letter from the mayor to be a bit vague," school board member Melanie Impastato said. "Why does it need to be extended for that long of a term? Between now and 2027, they should be able to get something done."

Dremel said she wanted to see more concrete plans.

The city wants to extend TIF District 3, which covers part of the downtown and some of the near east side. It was created in 2004 and is supposed to expire in 2027.

In a TIF district, property taxes above the amount collected when the district is established are devoted to work that increases the value of property in the district, rather than to local governments.

Money from TIF 3 has been used for streetscape projects, for example. About $66,000 a year that would have gone to the school district instead goes to the TIF 3 fund, according to Kris Monn, the school district's assistant superintendent for finance.

Only the state legislature can extend TIFs, and it won't do it if any of the affected taxing bodies don't agree, according to Mayor Jeff Schielke's letter.

School board member Jason Stoops asked if the extension was related to the building of the replacement Walgreens store.

In February, the city council agreed to use TIF 3 money to pay for up to $850,000 work related to the building of the store. Some of it would come from the increment generated specifically by the Walgreens. It also agreed to rebate up to $293,000 from the expected increase in sales taxes from the replacement store, or supply the money from the site's property taxes if the city can extend the life of the TIF district.

Schielke also wrote that there has been little development for one-third of the TIF time, since the economic downturn that started in 2007.

Schielke said Thursday the city has several projects in mind for which it might borrow money to offer development and repair incentives.

It might need more than 10 years to repay such bonds, Schielke said.

Schielke met with school Superintendent Lisa Hichens Thursday morning to discuss the request.

Other taxing bodies that would be affected are Batavia Township, the city, the Batavia Park District, the Batavia Library District, Waubonsee Community College, the Kane County Forest Preserve District and Kane County. The library board agreed to it Tuesday. The other boards have not yet considered the request.

The TIF 3 fund started 2013 with a balance of about $196,000 and took in $366,450, according to its annual report to the state. It spent $560,818 that year.

The city wants the letters of support by Sept. 19, so it can submit the request to state Rep. Tim Schmitz in time to get it considered in the fall veto session.

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