East Dundee may add tax increment financing district

East Dundee officials are considering the creation of another special taxing district near the village's commercial corridor along Route 25.

Trustees on Monday took preliminary steps to designating a former gravel pit a tax increment financing district in an effort to spur development in the area. The board gave the go ahead for the village to conduct a feasibility study to determine if the area north of an existing special taxing district qualifies for the designation.

"Before conducting the feasibility study, we need to notify other taxing districts to put them on notice that we are considering a (tax increment finance) district," Village Administrator Frank Koehler said.

By definition, Koehler said the 120-acre former gravel pit fits the TIF criteria and said the property owner, Sam Palumbo, had indicated potential users for the area.

The village is trying to find ways to entice development in the area and boost revenue as it faces the loss of its largest sales tax producer, Walmart.

Should the village approve the TIF district the area would connect two existing special taxing districts at Dundee Crossings - at the intersection of routes 25 and 72 - and Prairie Lakes Industrial Park in the village's northeast corner.

"This has the potential to bring businesses in," Village President Jerry Bartels said. "By joining TIF number one and TIF number two, the funds can be co-mingled between them."

In a TIF district annual property tax revenue shared among taxing bodies in the district would be frozen over the 23-year life of the district. As the value of properties increases, the extra tax revenue they generate will be used to redevelop the district.

If the TIF districts at Dundee Crossings and Prairie Lakes become contiguous, any revenue created from either district can be used in the other, Bartels said.

The village last year also designated an area downtown a special taxing district.