New East Dundee taxing district to spur redevelopment on Penny Avenue
East Dundee is establishing a new special taxing district that officials say will spur the redevelopment of properties along Penny Avenue.
The village board voted 5-1 Monday to approve the creation of a tax increment financing district that includes a vacant office building at 201 Penny Ave., a strip mall across the street at 210 Penny Ave. and a portion of the roadway in between.
The move is in response to broker Joe Billitteri's request for financial incentives to repurpose the former medical and professional offices at 201 Penny Ave. into eight two-bedroom apartments - a roughly $1 million project. Trustees in June pledged to reimburse Billitteri for 25 percent of project costs, capped at $250,000, using incremental property tax revenue generated at that site.
"The way we feel about (the Penny Avenue TIF) is similar to the way we feel about all of our TIFs," Village Administrator Jennifer Johnsen said. "Without them, there wouldn't be redevelopment."
In a TIF district, the property taxes that go to local governments are frozen at a certain level, which is set on a base assessed property value, for 23 years. Any taxes generated above that level can go back into redevelopment.
Trustee Alan Hall voted against the measure.
Representatives from five other taxing bodies opposed the creation of the new TIF district during a joint review board meeting last month. Some, including Community Unit District 300 and the Fox River Valley Public Library District, cited concerns over how it would affect their services and finances.
But Johnsen said the taxing bodies will reap the benefits of the planned redevelopment projects in the long-run, despite not being able to collect any incremental property tax revenue during the life of the TIF. The equalized assessed valuation for the new TIF area is expected to rise from $301,637 to roughly $600,000 over the next 23 years, village documents show.
"We feel this is a good thing for them," she said. "But we certainly understand their position on TIFs and how it has implications on them during the TIF."
Billitteri has acquired permits and is beginning work on the former office building, which he purchased earlier this year for roughly $200,000, Johnsen said. Plans for the property include gutting and reconfiguring the structure to create eight 930-square-foot apartments, as well as upgrading the building's exterior, improving the landscaping and adding carports.
The owner of the strip mall, which has been underused and declining in value for years, has also expressed interest in using tax incentives to help fund potential renovations at his property, Johnsen said.