E. Dundee hopes new tax district will attract businesses
East Dundee has added another special taxing district to the village's landscape in hopes of redeveloping an area that could create a commercial corridor connecting two of the village's main roads.
The village board on Monday approved a tax increment financing district with a business development overlay for an area known as Christina Drive, an area of about 350 acres located south of Route 68, north of the existing Dundee Crossings Business Development District and east of Route 25.
The proposed extension of Christina Drive from would connect Route 68 and Route 72.
The new tax increment financing district - also known as a TIF district - brings the total number of such districts in the village to four and creates a connection between the existing taxing districts at Prairie Lakes, Downtown and Dundee Crossings.
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.
Because all of the TIF districts are contiguous, the revenue generated in one area can be used in another taxing district.
Under the business development designation, an additional half-percent sales tax is applied to all purchases in the district, bringing the sales tax rate there to 9 percent. Revenue generated by the additional tax is used to boost the business development district.
The Dundee Crossings area and Dundee Gateway are also business development districts.
The village also implemented a half-percent hotel tax for the area.
Although no retailers or hotels are currently located within the area, Village Administrator Frank Koehler said the village is preparing for the future.
"If retail does come in, it will help fund improvements in the area," Koehler said.
Under the development plan, the village could spend about $33 million to improve the area, including the construction of a roadway between Route 25 and 68, improved utilities in the area, as well as signage to enhance the area.
The funds from the special taxing districts would pay for the improvements over the 23-year life of both the TIF and business development district.
"The proposed projects takes in everything that may happen in 23 years," Koehler said. "There is nothing on the table right now."