Des Plaines Five Corner TIF plan inching ahead

The plan to redevelop Des Plaines' Five Corners taxing district is still alive and inching forward despite some residents' efforts to quash it for the past three years since the district was established.

Consultants last week presented before the city council the final version of the redevelopment plan for the 70-acre, largely industrial area near Des Plaines' downtown, bound by River, Rand and Golf roads.

It calls for developing 385,000 square feet of new retail, restaurant and commercial space, 22,000 square feet of office space, 38 townhouses, as well as adding streets improvements, green space and new parking.

"There is good potential for a general merchandise department store at that location" such as Walmart or Target, said consultant Steve Friedman of S.B. Friedman & Associates.

Ward 6 Alderman Mark Walsten asked what the plan is for existing businesses.

"This is paramount - to take care of these people," he said. "I want to make sure they are treated fairly and are part of the planning."

The redevelopment plan has gotten mixed reviews from area businesses and residents at public meetings.

Ed Lehman of Geyser Berner Plumbing & Heating questioned how the city will determine who stays and who goes.

Officials said there are four scrap yards within the redevelopment area that definitely must go. The interest of private businesses and developers will determine what ultimately gets built on the site.

Des Plaines Community and Economic Development Director Mike Conlan said a tax increment financing district (TIF) offers a source of revenue for the city to do environmental cleanup on brownfield sites - there are 13 leaking underground storage tanks in the redevelopment area - and help pay for improvements such as stormwater detention, infrastructure upgrades and flood control projects.

It also would allow incentives for a homegrown business like Pesche's Garden Center & Nursery to expand and redevelop at its existing location, which the owner plans to do, Conlan said.

How much of the plan comes to fruition depends on the economy, as it may take a few years for redevelopment to start, Friedman said.

Friedman said the city can prevent sales tax leakage to communities such as Mount Prospect and Niles that have clusters of retail shops by developing its own retail and commercial uses in the Five Corners area.

Consultants also favored building townhouses and condominiums over rental apartments, which already are in abundance in the area.

Friedman said redeveloping anything within the Five Corners taxing district is challenging because there are 120 properties belonging to 89 different owners, and freight trains run through the area, slowing down traffic.

However, the biggest problem is that Des Plaines has no money in its 2010 budget for Five Corners. Officials have said the city lacks funds to purchase property within the district for redevelopment or to offer incentive to developers by helping pay for some infrastructure and cleanup costs.

Resident Dion Kendrick said property owners would be more at ease if the city took eminent domain - the power government has to seize private property for public purposes - off the table.

"You can do streetscape, fix streets, water mains and curbs without a TIF," he said.

With its current financial constraints, the city must rely on private developers, federal grants and possibly wait until future casino revenues kick in before it can undertake any improvement projects.

The Five Corners taxing area itself has generated only about $450,000 in incremental revenue since its inception three years ago.

A TIF freezes property tax payments to local governments for up to 23 years. The extra tax revenue collected as properties are developed within the district and increase in value pays off the original improvements.

Resident Barbara Van Slambrouck questioned why the city is continuing to invest in Five Corners when it has lost money on some other TIF districts. She also questioned the status of a lawsuit filed against the city by several Five Corners business owners.

The city council was advised not to comment on pending litigation.

The Five Corners redevelopment plan is available for review online at desplaines.org/EconomicDevelopment/TaxIncrementFinancing/TIF4.asp.

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