Wauconda District 118 sues Lakemoor over new tax designation
One day after the Lakemoor village board unanimously approved measures that officially designate two areas near and around the busy Route 120/12 intersection as a special taxing district to spur development, Wauconda Unit District 118 went to court to have one of them dissolved.
The school district's lawsuit, filed Friday, targets the southern portion of the intersection, saying it does not qualify under state rules for the tax increment financing designation.
"We do not believe the south area meets the criteria for chronic flooding," Superintendent Dan Coles said. Wauconda Township and the Wauconda Area Library District are considering joining the suit, he added.
The complaint says land owner Inland Real Estate Corp. has prepared plans for a 640,000-square-foot shopping center on the site and it can be "reasonably be expected" to develop without creation of the tax increment financing district. District 118 also argues it will lose property tax revenue as a result.
Under tax increment financing, the assessed value of properties within the district are frozen for taxing purposes. Taxes continue to be levied as the property value increases due to improvements such as stores. The additional amount of property taxes collected from that source (the increment) is put into a special fund. That money can be used by the village for a variety of purposes, such as extending utilities or building roads, rather than being shared with the other taxing bodies.
Lakemoor village board's Thursday night approval of the special taxing district comes after a year and a half of study, consideration and discussion. The designations represent a firm source of revenue for potential incentives and are regarded as table setters for development, officials said.
"When development does come around and they're interested in Lakemoor, that's something we can negotiate," Village Administrator David Alarcon said. "But we have that mechanism, that's the important thing."
Work to portray the Lakemoor as a place to do business and to develop the 74-acre southwest corner of routes 120 and 12 as a potential location for a shopping center is part of a larger effort to change the village's image. That area generally is the location of the southern tax increment district.
"That corner has been sitting since 1992," Mayor Todd Weihofen said. "It needs a boost."
Weihofen said land values will be frozen as provided for in the tax increment district and nothing will change unless a court orders otherwise. He added no residents from any jurisdictions complained during the process.
"It's very frustrating," he said. "We'll go to court, we'll end up prevailing. The school district is actually wasting its taxpayers' money."
District 118, Wauconda Township and the library district have objected to the tax increment designation, saying the area eventually will develop on its own. Also, the designation would freeze significant amounts of property tax revenue over the 23-year life of the district, they claim.
Lakemoor contended the southwest corner met state criteria for a tax increment district because of chronic flooding, which the school district and others dispute.
District 118 is asking the court to require the village to dissolve the southern district, in part, the village says, because it does not qualify as blighted land. None of the objectors had an issue with the northern tax increment district, which includes some existing businesses.
Village officials say the designations will be another entree on the menu as it continues to solicit development. That will include a trip in May to the International Council of Shopping Centers retail convention in Las Vegas.
"We're going to meet with developers and various businesses to see if they are interested in Lakemoor," said Matt Dabrowski, the village's director of community and economic development.