Lake Zurich OK's last deal needed to extend downtown tax zone
Lake Zurich village board members Monday night approved a final agreement as part of an effort to extend the life of a special taxing zone designed to spur downtown redevelopment.
Village trustees voted 6-0 in favor of the deal with Lake Zurich Unit District 95.
Since 2002, Lake Zurich has had a tax increment financing district in place in an attempt to attract downtown redevelopment. The special taxing zone is supposed to expire in 2025, but the village wants to extend it 12 more years so it does not have to contend with balloon payments on debt.
In a TIF district, property tax revenue is frozen at a certain amount and any additional revenue goes into public improvements rather than to local governments. Officials at schools and other taxing agencies often voice concern when a village wants a TIF district because of a resulting revenue loss.
By approving the agreement with District 95, village trustees secured the last deal they needed to support the proposed 12-year TIF district extension. Ela Area Public Library District, Lake County, Ela Township, College of Lake County and the Lake County Forest Preserve District also have agreements with the village.
Lake Zurich still needs the General Assembly to approve its TIF district extension. Republican state Rep. Ed Sullivan of Mundelein will assist the village in trying to bring the matter to a House vote.
While the six-day fall veto session starts Wednesday, Sullivan said he doubts lawmakers will address Lake Zurich's request until next year. Sullivan sits on the House Revenue and Finance Committee.
"They generally pass," Sullivan said of the TIF district extension requests. "We try to do multiple TIFs together and do it in one roll call."
Lake Zurich has about $28 million in outstanding debt associated with the long-stalled downtown redevelopment. Roughly $16 million of the $28 million debt is attributed to property purchases.
Village officials say annual repayments for downtown will balloon in the new budget starting May 1. They say if the TIF district isn't extended 12 years to even out debt repayment over a longer time, the village would be forced to cover its loans from the general fund.
Sullivan said he handled a similar TIF district extension for Libertyville in 2008, which hit a bump before gaining approval. Libertyville wanted its special taxing zone extended by 12 years so it could receive about $15 million more in revenue to buy land, build a second parking deck and finish extensive surface lot improvements.
After the General Assembly voted in favor of Libertyville's TIF district extension in 2008, it was vetoed by then-Gov. Rod Blagojevich. Lawmakers overrode Blagojevich's veto.