East Dundee considers new TIF district along Penny Avenue

East Dundee officials are exploring the creation of a new special taxing district in response to a developer's request for financial incentives to repurpose a vacant building.

Broker Joe Billitteri of Premier Commercial Realty has proposed acquiring the former offices at 201 Penny Ave. and transforming them into eight two-bedroom apartments, each at 930 square feet, that he would own and lease out. The project would require gutting the building, which has been uninhabited for several years, reconfiguring the interior, upgrading the exterior and adding landscaping, he told trustees last month.

Billitteri, however, also indicated the project would not be financially feasible without receiving tax incentives from the village.

In turn, the village board voted 4-1 Monday to begin the process of creating a tax increment financing district that would include the former office building, as well as a strip mall across the street at 210 Penny Ave.

In addition to directing staff to begin drafting necessary proposals, the measure authorizes the preparation of an eligibility report to determine if the area qualifies as a TIF district, according to village documents. Trustee Alan Hall cast the lone "no" vote.

Without the taxing district, the village would not be able to offer financial assistance to Billitteri or any other interested investors, Deputy Village Administrator Jennifer Johnsen said in a memo. And without financial incentives, she said, "redevelopment or rehabilitation, and thus reuse, of the property may be unlikely."

In a TIF district, the property tax revenues that go to local governments are frozen at a certain level, which is set on a base assessed property value. Any taxes generated above that level can go back into redevelopment.

The necessary renovations proposed for Billitteri's project at 201 Penny Ave. would cost about $512,000, plus another $364,950 for "upgraded improvements," such as new siding, fireplaces and carports, according to a report from Economic Development Director Doug Bergren.

If all those enhancements are made, documents show, the property's value would be expected to nearly triple, and the site would likely generate a tax increment of roughly $14,300.

The property would also have to be rezoned to allow for a residential use.

East Dundee still has to undergo several steps before a TIF district can be approved, including meeting with other government agencies and holding a public hearing. A timeline indicates the village would likely vote on creating the TIF in mid-June.