Des Plaines mayoral hopefuls split on merit of taxing districts
Two of three Des Plaines mayoral hopefuls criticize previous city councils for doing a poor job with special taxing districts that are now in trouble due to the economic slump stalling development.
With no incumbent in the race, former Des Plaines mayor Tony Arredia and two sitting aldermen, Matt Bogusz (3rd Ward) and Mark Walsten (6th Ward) are vying for the seat in the April 9 consolidated election. Bogusz said only one of the city’s five special tax increment financing districts is performing well.
A TIF freezes property tax payments from land within its boundaries for up to 23 years. Extra revenue generated as properties are developed and increase in value can be used to pay for infrastructure improvements and incentives to developers.
Bogusz said a previous city council made the mistake of acquiring nearly five acres at the northeast corner of Mannheim and Higgins roads, south of the Jane Addams Tollway within the city’s TIF No. 6, above market value with the hope of redeveloping the site.
TIF 6 was created in 2001 to spur redevelopment in the area east of Mannheim Road and north of Higgins Road on both sides of the tollway.
The city has been trying to recoup money it spent buying and clearing that 5-acre site for projects that stalled due to a weak economy and hotel glut. Without development, the TIF is expected to be $19.7 million in deficit over its lifetime. Des Plaines must pay roughly $1 million in principal and interest payment toward that debt this year.
Last fall, a Chicago developer abandoned a plan to build a seven-story parking garage, nine-story 180-room hotel and a fast-food restaurant on that site. The city had agreed to sell the land to The Parking Spot for $1.1 million.
Arredia, 75, who retired as mayor in April 2009 due to voter-imposed limits on consecutive terms, said he’s glad the project fell through because the city was selling the land for too little.
“I’ll put a hotel on that thing within six months after I’m there,” said Arredia. Arredia said if the city starts bringing in businesses, hotel developers will follow.
Walsten voted against the latest TIF 6 redevelopment project because he wanted to see a more ambitious plan than a parking garage, which he believed didn’t utilize the full potential of the property.
Walsten, 55, said previous city councils and administrations created special taxing districts without knowing how to make them work.
“I think there’s been very successful TIFs, (but) not in Des Plaines,” Walsten said. “They’ve done a pretty good job of screwing it up. That doesn’t mean it can’t be done, if it makes sense.”
Walsten said he would bring in an outside firm with expertise to handle TIF redevelopment.
All three candidates said they would consider the possible dissolution of the controversial Five Corners taxing district, which has failed to spur development since its establishment in 2007 and has left businesses in limbo.
“The chances of us doing something within the next couple of years is nil,” Arredia said.
The Five Corners TIF is a 70-acre, largely industrial area near Des Plaines’ downtown. The city council approved the TIF district one day before voters overwhelmingly rejected it in a nonbinding referendum.
“TIF is a financial tool. It is not an automatic economic development engine,” said Bogusz, 26, the city’s finance committee chairman. “The economy was not there to support that investment.”
Walsten said it would be premature get rid of the Five Corners TIF without first making some improvements.
“The place looks pretty bad ... it’s kind of an embarrassment to the city,” Walsten said. “We’re trying to clean it up and if we can do that with TIF funds, I say that’s a good idea.”
The city has budgeted $500,000 in infrastructure improvements within the district this year, using money already generated by the district.
“If it never goes anywhere, at least we got new sewers, storm sewers and sidewalks,” Walsten said.