How St. Charles hopes to spur redevelopment of shuttered Pheasant Run Resort
The St. Charles Council voted unanimously this week to create a tax increment financing district to spur the redevelopment of the shuttered Pheasant Run Resort in St. Charles.
In December, a joint review board unanimously recommended that the city approve a redevelopment plan for Pheasant Run. The panel also found the former resort property meets the criteria to become a tax increment financing district.
The joint review board has representatives of local taxing districts affected by a proposed TIF. Representatives from Wayne Township, St. Charles School District 303, the St. Charles Park District and St. Charles Public Library District attended December's meeting.
TIF consultant Kane, McKenna and Associates created the redevelopment plan. KMA President Phil McKenna told the council on Jan. 3 that the TIF plan conforms to the city's comprehensive plan.
A TIF district freezes property taxes paid to local governments at their current level for 23 years. Typically, as redevelopment takes place, land values increase, bringing additional property taxes. Any taxes collected above the base level from within the TIF district go into a special fund to help pay for redevelopment.
The property has seen a decline in equalized assessed valuation in the past two tax years, McKenna said.
"There's been a decline of 33% of equalized assessed valuation, and that's prior to the fire," McKenna said.
A fire in May 2022 destroyed large parts of the resort, which closed in 2020 after a failed attempt to sell it at auction.
Two boys pleaded guilty to felony arson Wednesday for starting the fire. Two other boys pleaded guilty to misdemeanor trespassing.
The plan estimates it will cost $42.6 million to redevelop the property, which has been designated for light industrial, retail and commercial use. The investment is projected to significantly increase the property's EAV, McKenna said.
"The projected EAV upon completion of redevelopment activities is somewhere between $50 and $75 million," McKenna said.
That investment includes an estimated $16.5 million in demolition, site preparation and environmental cleanup, along with $9 million in land acquisition and assembly.
Other costs include $3 million in infrastructure/public facilities improvements, $1.5 million in rehabilitation costs, $5.5 million in interest costs and $6 million in statutory school district payments.
McKenna said the budget is spread out over time.
"It's a 23-year budget," McKenna said. "That's a long period of time. Development, as you know, doesn't happen all at one time."
Derek Conley, the city's economic development director, said determining redevelopment costs is difficult.
"The $42 million captures all possible costs in the event that they are needed," Conley said. "However, for any potential project, it is not realistic that the full $42 million would be utilized."
Conley said just because it's an estimated redevelopment cost doesn't mean it's going to be paid for by the TIF.
"The city is only looking to fill in a financial gap for a potential development," he said. "A majority of the redevelopment costs will be borne by the prospective developer."
Conley also said the estimated redevelopment costs are for the entire former Pheasant Run property, including the former golf course.
The plan also addresses the fire and its impact on redeveloping the property.
"These conditions negatively impact the possibility for coordinated and substantial private sector reinvestment in the overall redevelopment project area," according to the plan. "Without the use of city planning and economic development resources to address certain issues, potential redevelopment activities are not likely to be economically feasible.
"These factors potentially weaken the likelihood for redevelopment opportunities, limiting employment and contributing to a lack of future investment in the area. To address these conditions, the city seeks to adopt the Pheasant Run TIF in order to enhance future opportunities for viable redevelopment."