Bartlett downtown tax district extension up in air

Opponents say the vacant spaces that line downtown Bartlett prove that the Town Center TIF district has failed.

A tax increment financing (TIF) district uses increases in property tax revenues with new construction and rising property values to pay for area improvements meant to spur economic development.

Despite the vacancies, the downtown business owners who have used those tax incentives over the past 22 years disagree with the naysayers.

Bruce Suffern owns Banbury Fair, a downtown mainstay. He's applied for and gotten incentive money from the TIF district twice to help build major additions. He raves about its effectiveness in changing the face of downtown.

"Without those incentives, the decision would been much easier to not go ahead with the projects," he said.

The TIF district is set to expire at the end of year. Suffern and other property owners have asked the village board to extend it an extra year through 2010 to give them a chance to spend the $2.7 million in unused TIF district money on additional projects. The board is set to vote on the matter on Tuesday after a debate that started in May.

If the board doesn't extend the TIF district, that money would revert to various taxing bodies, including the park district and Elgin Area School District U-46. The board needs to notify the taxing bodies by Nov. 1 of its decision so those taxing bodies could budget for additional money.

Some downtown business owners aren't aware of the incentives that are available, even as the TIF district reaches the end of its life, Suffern said. He said next year represents a critical year for businesses trying to survive and grow in the slumping economy, and that the board needs to vote in favor of an extension.

"I'm praying that it is extended for another year," he said.

Bartlett officials established the Town Center TIF district in 1987, hoping to encourage development around a relocated Metra station. The village brought in two developers and worked to turn the downtown into a mix of retail and condominiums.

The initial response was positive, as antique-style lighting and brick pavers transformed the area that was once a mix of blighted buildings.

Improving a rundown area is the goal of a TIF district, with the theory that it will increase property values and ultimately benefit all taxing bodies through higher property tax collections after it expires.

Opponents scoff at that, saying TIF districts are a waste of taxes, as the money could otherwise be spent by government bodies such as schools. They also say TIF districts don't always produce development as promised. Bartlett has three TIF districts.

Trustee Frank Napolitano said at a recent board meeting there's no way he would call downtown Bartlett a blighted area, and that it doesn't qualify for a TIF district's benefits.

During the life of the Town Center TIF district, $18.6 million has been raised, including $15.8 million directly from property taxes, according to the village. The village has added sewer lines, worked on stormwater retention, paved new roads and added electric and power lines using the funds from the TIF district.

The village was able to do that work when it purchased the various properties within the TIF district's borders. The parcels were later sold to two developers for a significantly lower price than what the property would have earned on the open market.

There's an approved list of how the money can be used, including marketing. Members of the economic development committee suggested using $150,000 of the remaining TIF district money for marketing.

Many motorists don't know that downtown Bartlett exists, as it's almost hidden between major intersections, said Arleen Braun, who moved into the village 25 years ago. She runs Four Paws, a not-for-profit pet shelter, and she's part of a group that Suffern organized to bring business owners together.

"It's the kind of thing that brings a community together," she said of the organizing work Suffern has done.

Trustees Napolitano and John Kovouris said the village needs to end the TIF now. At a recent board meeting, the two questioned how well the incentives have worked to encourage development.

"End it; it's done," Kovouris said. "We've had enough time."

Mayor Michael Kelly and Trustees Sherry Bormann and Dennis Nolan support a compromise, to give some of the $2.7 million to the taxing bodies and use some for the businesses. One suggestion was to give the taxing bodies $2 million from the surplus, with the remaining $700,000 kept for the businesses. Under that arrangement, the village would get $184,000, the park district would get $116,000 and the library would get $62,000.

Trustees Dennis Nolan and T.L. Arends, along with the mayor, have had to recuse themselves from some of the votes. Kelly and Nolan have their law offices within the TIF, while Arends works at Harris Bank, which also resides within the TIF district's borders. While they can vote on whether to extend the TIF district, some related votes could reflect a conflict of interest.

The village's economic development committee has suggested expanding what the TIF district money could be spent on to give businesses better incentives. Suffern said that wouldn't be fair to businesses who have already applied for funds and couldn't take advantage of the new program.

Bormann said she won't vote to extend unless she first sees more specifics on how the money would be spent.

Kelly once was against the extension, but he now says he'll support the extension if rebates and incentives remain the same and aren't expanded in the final year.

The issue, Kelly said during a recent board meeting, is "how do we accomplish the best use of the people's money?"