Naperville nears first tax district

Call it preventive maintenance for downtown Naperville.

Developers are close to getting the green light to transform an aged block of southern downtown into Naperville's first tax increment financing district.

A public hearing on the matter could come as early as Nov. 20 with a city council vote to follow sometime in December after the council unanimously approved a preliminary timeline Tuesday.

Most often, cities use these types of taxing districts to revitalize blighted sections of a town. But state law allows cities to also use the designation to ensure that areas don't become blighted. That's the rationale for such a move in the very vital downtown Naperville commercial corridor.

"I've always felt this was a tool Naperville could use to improve parts of downtown," said Councilman John Rosanova. "You look at the Cantera TIF in Warrenville and our downtown competes with that."

Developers are seeking to create an extension of downtown south of the Riverwalk along Water Street between Webster and Main streets. It's an area that has seen little physical improvement in the last few years.

"Basically, the development would be in line with what you've seen elsewhere in downtown," said Kevin Gallaher, an attorney representing the developers.

Moser Enterprises and Marquette Co. are the developers. The plan is to create a mixed-use development featuring several restaurants, retail shops, some condominiums and a public parking deck.

It's the parking deck component that has intrigued councilmen the most. Two city proposals to build parking decks are priced at about $15 million and $30 million apiece. This project would cost the city about $4 million for a parking deck, city officials said.

But some opponents of the TIF designation believe the city is wasting tax dollars.

"None of this should be necessary, if the council would adopt a pay-to-park program," said resident Sheldon Hayer. "Pay-to-park would pay to fund construction of all parking decks."

But city officials contend free parking downtown is one of the cornerstones of downtown Naperville's success and have been resistant to calls to change that stance.

Some are also concerned the development will commercialize the Riverwalk, but Gallaher contends this section of the Riverwalk wouldn't see improvements and accessibility without the project.

TIF districts work by freezing the property tax rate of an area for up to 23 years. While property values go up over the life and development of the district, the excess taxes go to the developer to help offset the infrastructure improvements of the district. They can also be funneled back to the overlying taxing bodies to use for capital improvements.