Wheaton considers guidelines for tax incentives

Wheaton officials are eyeing new guidelines to prevent developers from seeking overly lofty tax breaks.

Councilmen this week tentatively agreed to establish a policy for establishing tax-increment financing districts. A final vote is expected to happen once the policy has been refined, officials said.

"This document is going to go a long way to helping staff … and developers," said Councilwoman Liz Corry said. "It gives us a template that isn't too restrictive but is restrictive enough to prevent some wacky development."

A tax-increment financing district, commonly called a TIF, freezes the amount of property taxes local governments get for up to 23 years and diverts the difference toward improvements within a designated area.

Councilman John Prendiville said Wheaton's proposed TIF policy would ensures fairness with different developments.

"True public-private partnerships share in the costs but also the benefits," he said. "TIF … is a real valuable tool, so long as it's used fairly and intelligently."

If the policy is approved, officials say it would give city staff and developers general criteria for TIF agreements that elected officials could endorse.

Officials hope it also would expedite negotiations. As proposed, the policy would allow the city council to waive certain criteria.

"To have a base document that gives us a starting point … we're not going to start in the developer's ballpark and work our way back down," City Manager Don Rose said.

Some conditions under consideration include:

• A certain percentage, possibly 10 percent, of residential units within any TIF development be "attainable," as defined by the Illinois Housing Authority's benchmark of 30 percent of the median income going toward housing payments.

• Financial assistance for property purchase costs be limited to 10 percent above its fair market value as determined by an independent appraiser. This aims to limit sellers from hiking sale prices, officials said.

• TIF assistance be limited to 70 percent of the projected TIF increment being generated by the proposed project. This would divert 30 percent of the TIF proceeds so the city could use them on public works improvements necessitated by the project or elsewhere.

• TIF assistance be provided on a "pay-as-you-go" basis, instead of a lump sum at the start of a project. This would help protect the city and taxpayers from projects that stall.

• A provision that requires developers to split with the city any increase exceeding their originally projected rates of return.

"They're using our money," Prendiville said. "If they're going to make a profit, we should benefit … the taxpayers should benefit."