Des Plaines on its way to extending life of a controversial taxing district

Whether Des Plaines is able to get a 12-year extension to refinance and pay off a special taxing district that is losing money is up to the state legislature.

Without the extension, Tax Increment Financing District 3, created in 2000 to spur redevelopment of 47 acres of industrial property just north of the Des Plaines oasis on the Jane Addams Tollway, is facing $9 million in losses over the next 14 years because increased taxes won't cover the money the city spent to spur redevelopment.

Before asking the state for the extension, the city had to get 14 area taxing units to sign off since those entities lose out on increased property tax revenues generated from redeveloped properties during the taxing district's life span.

City officials got their blessing by promising those taxing units they would not extend Cook County 6b tax abatements, which last 10 years, on two buildings constructed in the district, 3rd Ward Alderman Laura Murphy said. The 6b program cuts property tax revenues in half.

Murphy said the city also agreed that if there are surplus funds before the TIF runs out, it will reimburse the school districts their share of the money as it becomes available.

"We thank all of the governing bodies for understanding and standing by us," Des Plaines Mayor Tony Arredia said. "We have a great relationship between city hall and all of the government agencies and I'm very proud of that."

Arredia said the city over the last two years gave $3 million in surplus funds from the downtown TIF district to the school and park districts.

"We're distributing it as soon as our TIF expenses are paid," he said. "We are starting to push money back right into their coffers. I think that just solidified our relationship."

A decision on the TIF extension is expected by the end of the current legislative session, after which the city will restructure the roughly $16 million original debt.

"With the current financing rates, we feel that the deficit will at least become a break even or a profit," Arredia said.