Carpentersville to consider tax incentive study

Could certain areas on Carpentersville's east side benefit from the creation of special taxing districts?

Village trustees will ponder the idea Tuesday when they consider approving a proposal to study two areas for potential tax increment financing districts.

Some trustees support special taxing districts as a means of sparking economic development, while others say such areas are a disservice to residents.

In a TIF district, property tax levels are frozen for a period of up to 23 years.

The designation freezes the amount of property tax revenue local governments get from the properties within the district. As property values rise within the district, the tax revenues above the frozen level are used to pay for infrastructure improvements within the district.

As the area redevelops, the tax revenues above the frozen level, called the increment, could also offset the costs of private developers.

Village board members say creating TIF districts would benefit areas of the village that need a shot in the arm.

"I know it is not productive in that it restricts revenues for the village," Trustee Keith Hinz said. "But this is something the village needs in relation to the east side. We keep hearing we need something on the east side, and one way to bring things in is to provide incentives for developers to come to us."

In addition, Village President Bill Sarto said taxing districts would allow the village to stay on par with the surrounding areas.

"We have to be competitive. We have to offer the same kinds of incentives and offer things, like TIFs, that East and West Dundee have, to improve the infrastructure and the area," Sarto said.

But Trustee Paul Humpfer said TIF districts afford developers tax cuts, leaving residents to pick up the tab.

"Developers in general won't pay taxes and we will pass that off to the residents," said Humpfer, who voted against budgeting for the study when it came before the village audit and finance panel earlier this year. "Residents are taxed enough. This is not the only way to encourage economic development."

If approved, Chicago-based financial consulting firm Kane McKenna and Associates will conduct the study, expected to cost more than $15,000.

Areas under consideration are Lake Marian Road to Route 25 and Route 25 from L.W. Besinger Drive to the village's northern border, as well as the Route 31 strip mall and the northwest corner of Route 31 and Main Street.

"The bottom line is, would development be likely to occur in the area and does it need help for that to happen," Village Manager Craig Anderson said. "We are looking at this as an economic development tool to encourage development or redevelopment in certain areas."

The village board will consider the study at its board meeting at 7:30 p.m. Tuesday at village hall, 1200 LW Besinger Drive.