End near for two TIFs created to spark redevelopment in Vernon Hills

The end is near for two special financing districts created to spark development on the north and south ends of Milwaukee Avenue in Vernon Hills.

Village officials recently authorized actions to formally close the books on tax increment financing districts created to develop the Vernon Hills Town Center at Route 45 and the Mellody Farm center at Route 60.

TIFs are formed to spark activity in underutilized areas by freezing property taxes paid to local governments like school and park districts for up to 23 years. Additional revenues generated by increasing property values are shifted to a special fund used to pay for improvements within the district.

The Town Center district ran its course and the village authorized the distribution of surplus TIF funds to the local governments.

With the TIF expired, local governments also can expect to receive property tax revenues based on the increased value of the property. The Town Center TIF area generates about $2.3 million in tax revenue per year.

The Mellody Farm agreement is different in that the village in 2017 issued bonds to help fund redevelopment-related costs. TIF funds, rather than general operating revenues, were being used to repay the debt.

About $14.2 million remain outstanding with maturities through 2037. The village board agreed to pay the outstanding balance, saving $3 million in interest.

“This is a major step in the move toward closing the Mellody Farm TIF early,” explained Vernon Hills Finance Director Thomas Lyons.

The bond redemption will be finalized and a legal review of the closeout process done before a final authorization to end the district, possibly next month, Lyons added.

“The project is completed, the TIF mechanism has served its purpose and, at this point, we’re just trying to administratively close it down and wrap everything up,” he said, adding that the goal is to get local governments their property taxes as soon as possible.

mzawislak@dailyherald.com