Lake Zurich to explore special taxing district at Kmart site
Lake Zurich trustees have agreed to pay a maximum $40,000 on a study about possible creation of a special taxing zone to spur development of a property with a long-closed Kmart.
Garden Homes Management Corp., which owns the roughly 7-acre Rand Road site just north of Route 22, has floated a tentative retail and apartment plan. The Kmart closed in 2002, and the building has been empty since then.
At a meeting Monday night, the village board voted 6-0 in favor of paying a maximum $40,000 to consultant Kane McKenna and Associates of Chicago to explore a tool known as a tax increment financing district that could help in revitalization of the Kmart properties or others nearby, such as Paulus Park across the street.
Village Manager Ray Keller said Garden Homes has not requested a tax increment financing district or other public assistance. He said the special taxing zone could be something the village needs in the future, depending on how the Garden Homes proposal goes.
"There has been very little interest from the development community in doing anything with the property," Keller said. "And so we're very pleased and want to encourage and support efforts to make that property productive and contribute to the community."
Since 2002, Lake Zurich has had a tax increment financing district in place in an attempt to revitalize downtown.
In a TIF district, property tax revenue is frozen at a certain amount and any additional revenue goes into public improvements, such as infrastructure, rather than to schools and other local governments.
Lake Zurich has about $28 million in outstanding debt associated with the long-stalled downtown redevelopment, with roughly $16 million of that debt attributed to property purchases.
Mayor Thomas Poynton said a TIF district doesn't have to mean crushing debt. He said Lake Zurich wound up in a financial bind trying to revive downtown under a different administration.
"Ours, I think, was managed poorly," Poynton said.
Trustee Jeffrey Halen noted what's happened downtown in a tepid vote in favor of hiring Kane McKenna to study the possibility of a tax increment financing district for the Kmart land.
"It's an 'aye' with fingers crossed and strong reservations," Halen said.
Garden Homes would demolish the Kmart and replace it with three 4-story apartment buildings with a total of 160 units and a retail center. There would be indoor parking for the one-, two- and three-bedroom rental units from 910 to 1,680 square feet.
Kmart operated on Rand Road for about 20 years until it was closed. Lake Zurich was part of Kmart's closure of 283 stores throughout the country in 2002, including 14 in the Chicago area.
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