Elk Grove Village rebates excess tax money to school districts, township

Leaders of various Elk Grove area taxing agencies are commending Elk Grove Village's move to rebate $300,000 yearly in excess revenue from a tax increment financing, or TIF, district before completion of its 23-year life cycle.

Earlier this year, Elk Grove Village officials declared a surplus in the Grove Mall TIF fund. The district encompasses properties along Arlington Heights and Biesterfield roads near Elk Grove village hall.

In a TIF district, property tax receipts that normally would go to government entities such as townships, schools and park districts are frozen from the time the district is established up to 23 years. Any increase in property tax revenue generated from redevelopment of the area is held in a fund used to aid redevelopment.

After redevelopment costs are paid off, if there is a surplus at the end of a TIF's life, that money gets rebated to area taxing bodies.

The roughly 10-year-old Grove Mall TIF was originally set to expire in 2023. The district is doing so well that officials decided to shorten its life span by three years, Elk Grove Village Mayor Craig Johnson said.

"They were shocked," Johnson said of the reaction a recent meeting of TIF area taxing bodies. "No one could think of any (TIF) district that was ever shortened and rebated early."

Affected taxing districts that will start receiving paybacks as of the next fiscal year include the park district, the library district, township, and school districts 59 and 214.

Northwest Suburban High School District 214 school board President William Dussling said in the 12 years he has been on the board no municipality has given back TIF money in advance.

District 214 is affected by 14 TIF districts imposed by eight communities within its boundaries. They divert roughly $4 million annually from the school district.

"This is extremely rare to receive something back on an original TIF," Dussling said. "We would hope that all the towns that have TIFs would do that."

District 214's share of the rebate from Elk Grove Village amounts to roughly $80,000.

"You can look at that as two teachers," Dussling said.

Elk Grove Township Supervisor Nanci Vanderweel said her township's expenses in employee health insurance and retirement contributions have increased while revenues remain flat at last year's level. It is unclear how much money the township will get from Elk Grove Village.

"If it were $1.98, I'd find a place to put it," Vanderweel said. "We are very grateful for anything that we get."

The Grove Mall TIF helped redevelop the former Jewel shopping center complex, now known as Elk Grove Town Center, which struggled to attract tenants and developers. The site had chemical leakage from a laundromat and a building contaminated with asbestos that was cleaned up with TIF funds.

"It was truly a horrendous site," Johnson said. "Every store was vacant. It really was a blighted eyesore."

Today, the town center is anchored by a Dominick's Finer Foods and Pharmacy, houses a bank and Jimmy John's, and soon will be home to Chipotle Mexican Grill.

Johnson said the TIF's purpose to revive the area has been accomplished.

"Sometimes government entities have a tendency to extend (TIFs) or milk it," Johnson said. "We want to use it for exactly what it was intended - to give a jolt to start an economically deprived area. We don't want to make it into a cash cow."