Schaumburg ends tax district for STAR line
Schaumburg officials Tuesday night pulled the plug on a tax increment finance district established 2½ years ago to help spur redevelopment of the commercial area near the convention center and hoped-for STAR rail line along Interstate 90.
But the village hasn't lost faith in the STAR line, even while acknowledging it's at least a long way off, Mayor Al Larson said.
Nevertheless, the redevelopment the village envisions no longer even depends on the STAR line's construction, he said.
The simple reason for the change of heart on the TIF district is the unexpected decrease in property value in the past year — something that hurts the whole purpose of a TIF.
A TIF district works by freezing property values at the level of the district's first year — in this case, 2009. As property values are normally expected to increase, the increased taxes that would otherwise go to such taxing bodies as school, library and park districts go instead to a particular village fund. There they are held for public improvements to go along with private redevelopment within the TIF district.
But the whole plan falls apart in such rare situations as when property values fall below the established levels of the district's first year.
The frozen equalized assessed value of the TIF district is just under $92.9 million. For the 2009 tax levy, EAV rose to $98.4 million. But for the 2010 levy, EAV fell to $69.8 million — 29.3 percent below the year before.
While the village recognized dissolving the TIF as the best option right now, officials will soon begin working to establish a new TIF at the new EAV level with some changes to the current boundaries, Community Development Director Julie Fitzgerald said.
Tuesday's decision allows the village to properly inform other affected taxing bodies by Oct. 31 for the TIF to dissolve on Dec. 31.
The current TIF balance is $547,433, which includes $216,726 from the 2010 levy that must be turned over to Cook County for distribution to all affected taxing bodies whether the TIF ends or not.
But even after that, there will be $330,707 for the village itself to redistribute among the contributing taxing bodies after the TIF district ends.