Lake Zurich trustees have created a special taxing zone to spur development along Rand Road centered on the long-closed and soon-to-be-demolished Kmart.
The village board last Monday voted unanimously in favor of a tax increment financing district to help revitalize the Kmart property and others nearby, including Paulus Park.
Village trustees and staff say the new TIF district wouldn't be run like the downtown TIF district, which was set up by a previous board in 2002. Lake Zurich has about $24.66 million in outstanding debt associated with the long-stalled downtown redevelopment, with roughly $16 million of it attributed to property purchases.
Trustee Jim Beaudoin, who ran last Monday's meeting in Mayor Tom Poynton's absence, said he was hesitant when trustees first discussed a TIF district near Kmart years ago. The village paid a consulting firm $40,000 in 2016 to explore the idea.
"I had concerns when this TIF was brought forward because TIF is a four-letter word almost in my book, based on what we've had to do as a board to try to dig us out of a hole," Beaudoin said.
Kyle Kordell, the assistant to the village manager, said the Rand Road TIF district does not obligate the village to issue bonds, acquire property or incur debt. Kordell said the village board and staff prefer a "pay as you go" approach, committing resources to projects only as the district generates revenue. That approach differs from the way the downtown TIF district was used to bond millions of dollars to buy individual properties from 2002 to 2006.
The first property in the new Rand Road TIF that could see redevelopment is the old Kmart site. Kordell said Garden Homes Management Corp., which owns the roughly seven-acre Rand Road site just north of Route 22, has submitted an application to demolish the former Kmart, which closed in 2002.
Kordell said the village is ensuring the demolition process does not occur until after the 4th of July celebrations at Paulus Park, since the Kmart parking lot is filled to capacity during the festivities.
Garden Homes' plan is to build a retail and apartment mixed-use development on the site. Its plan was approved 5-0 by the planning and zoning commission in October 2017 but hasn't been before the village board.
The new TIF will run along Rand Road from Honey Lake Road to Route 22, a length of slightly less than 3,000 feet. It will include most of the commercial property that runs to the west of Rand Road as well as Paulus Park and other properties on the east.