Batavia seeks OK to extend TIF district
Batavia is seeking permission to extend the life of a downtown tax-increment financing district. meant to provide financial incentives for development, even though that district doesn't expire until 2027.
Monday the council voted to ask the state legislature to extend the life of TIF District 3 by 12 years, to 2039.
Alderman Alan Wolff asked if all the taxing bodies affected had submitted letters of support. Letters have not been received, but are expected, from the Kane County Forest Preserve District and Kane County, said community development director Scott Buening. Without unanimous support from all of the bodies, the state legislature won't consider it, according to Batavia Mayor Jeff Schielke.
"What we are trying to do is get this in position so it can be acted on in the veto session of the General Assembly," Schielke said.
In August members of the Batavia school board had questioned why the district should be extended. They felt they weren't given enough information. School board member Melanie Impastato said at the time, "Between now and 2027, they should be able to get something done."
But city officials met with them, and the school board agreed to it Sept. 23.
About $66,000 a year that would have gone to the school district goes to the TIF fund. The district covers part of the downtown and some of the near east side. It was created in 2004.
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. At the expiration of the district, the increase in property value is treated as new property, and not subject to the property tax cap law for a year.
For example, when a TIF expired for the Chicago Premium Outlets Mall in Aurora expired at the end of 2012, the Batavia school district booked it as a $95 million gain in new construction, and in 2014 collected about $6 million in additional property taxes from it.
The city council agreed in February to use TIF 3 money to pay for up to $850,000 worth of work related to the building of the replacement Walgreens store at 122 W. Wilson St. Some of the money would come from the increment Walgreens would generate. The council also agreed to rebate up to $293,000 from the expected increase in sales taxes from the replacement store. But if it can get the TIF life extended, it would pay that from the site's property taxes instead.
The mayor has said the city may borrow money to offer development and repair incentives, and if it does so, it could take more than 10 years to repay such bonds.
Other taxing bodies that would be affected by the extension of the TIF are Batavia Township, the city, the Batavia Park District, the Batavia Library District and Waubonsee Community College.
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.