Lake Villa needs tax tool - TIF - to attract business, leaders says
Lake Villa has a commuter train station and a waterfront park, but village officials say it needs more punch to attract development in and around its modest downtown.
To do that, the village proposes to use a sometimes controversial tool known as tax increment financing, which freezes property values - and the amount taxing districts, including schools, receive - for 23 years. Taxes are paid on increased property values that result from development, but that extra amount (the increment) is set aside for use in a variety of purposes to improve the designated area.
"This isn't project-driven," Village Administrator Karl Warwick explained. "It's driven by the fact Lake Villa hasn't seen any significant development in a long time. The conversation doesn't start unless there's a TIF district."
Mayor Frank Loffredo said opportunities have passed on Lake Villa and gone elsewhere, including Wisconsin, which offers incentives to business.
"There is no competition because we don't have anything to compete with," said Loffredo, who has served as mayor since 1993.
Small incentives, such as shared sales taxes, have been used to assist some small ventures. Loffredo said more long-term firepower is needed particularly as the economy improves and businesses look to build or expand.
"We missed a lot of opportunities, not because we didn't try. Other communities were able to put something on the table we just didn't have," he said.
Loffredo acknowledges TIFs can have a negative connotation. Designating one takes about nine months and must include public input. As Lake Villa begins the process, it will host an informational meeting at 7 p.m. Tuesday, Nov. 17, at the Lehmann Mansion, 485 N. Milwaukee Ave. Details are available on the village website, www.lake-villa.org/TIF/.
"That's why we want to have these informational meetings, so they can really learn about it. We want people to understand it," Loffredo said.
The proposed area encompassed 243 properties on 178 acres in and around the downtown commercial area, including the northern portion of an industrial area off Park Avenue, and commercial and residential areas near Grand Avenue and Route 83. About half the area is vacant property, including a 25-acre parcel on Cedar Lake. Another key piece is the Pleviak School site on Grand Avenue and Route 83.
Establishing a TIF was recommended in a master plan commissioned for the village for the area surrounding the train station. That plan, adopted in 2013, said projections didn't warrant development without one, Loffredo said.
Warwick said the intent to pursue the TIF has saved Vonco, which opened in the 1950s, from renting space in Wisconsin. About $2 million would be designated to allow the manufacturer of flexible plastics to expand its building, Warwick said.
"They are pursuing property ownership here in Lake Villa because of what we're doing," he said.
The village had informal discussions with all the affected taxing districts. If development proceeds as planned, all revenue lost to those taxing entities over the life of the TIF would be made up in one year after it expires, Warwick said.