St. Charles to create playbook for luring development to town
St. Charles elected officials will vote next week on general guidelines to stimulate profits for developers who can bring projects that will fill city coffers with new tax dollars.
The city council will still consider new commercial, residential and industrial projects on a case-by-case basis. However, the guidelines will provide a playbook for the council and city staff to evaluate which developments are worthy of tax breaks or funding assistance compared to projects that can happen without any monetary assistance from the city. Approving the guidelines might also send an additional signal to the development community that St. Charles will compete with other municipalities for the big box stores that can provide the tax money to fuel city services without leaning too heavily on residential property owners. In general, the more tax money a development funnels back to the city in the long term, the more likely the city will be to open its wallet to the project.
The proposed guidelines also show the city has a desire to bring in business that will create local jobs. Preference will be shown to projects that have building leases of a decade or longer and create at least 10 new jobs.
There is also a structure in the guidelines to ensure the city isn't duped by a developer lowballing expected profits and then reaping a windfall after the city provides assistance. Profits would be split 50/50 between the city and developer in that instance.
The guidelines are not expected to pass without some debate. For instance, Ward 1 Alderman Ron Silkaitis has already promised a "no" vote on the guidelines because they list housing developments as potential recipients of tax increment finance dollars. Such assistance is often controversial because TIF assistance for housing projects creates a situation where the new residents increase the burden on city services, school and parks, while limiting the amount of new property tax dollars the housing project provides to pay for that increased burden for as long as it is in the TIF district.
"I don't even want to put it out there," Silkaitis said at a meeting this week to discuss the guidelines.
City Administrator Brian Townsend reminded Silkaitis the council agreed to TIF funding for the First Street development project, so a precedent is already set for such assistance.
Silkaitis said First Street is such a major project that is the exception to the rule, not the general example.
"For strictly a housing development with nothing else to offer, it just doesn't make sense to me."