TIFs losing money in some of Des Plaines

A new report card on the five special taxing districts in Des Plaines says they need improvement, including one that could rack up an $11.5 million deficit by 2022 if it continues to fail.

Des Plaines aldermen Monday night heard a consultant's report on its tax-increment financing, or TIF districts, which noted that three of the districts are operating at a deficit. The Wille Road district is lagging the most ($2.6 million in the red). Another district is operating at a $874,872 deficit, while another is $172,225 in the hole.

All the districts have increased in value since the city decided to use special tax incentives and public dollars to lure development, consultant Leslie Murphy said. The biggest success stories are the city's downtown district ($5.8 million in the black), and the district at Mannheim and Higgins roads ($4.3 million in the black with more hotels planned).

"I think we should be very excited about the condition of TIFs in our city," said 3rd Ward Alderman Laura Murphy, who chairs the city's community development committee.

The Wille Road district at Mount Prospect Road, created in 2000 to draw industrial and commercial businesses, is the biggest money-loser.

By the end of its life in 2024, the district is expected to be limping at an $11.5 million deficit.

"You need to take a good strong look at this TIF district," said Leslie Murphy, who isn't related to the alderman.

Those figures concern residents, too.

"Who's on the hook to make those payments?" asked resident Dion Kendrick.

The city would have to cover those expenses, city officials said.

Alderman Murphy said her committee will host a meeting later this month to address how to turn the Wille Road district around.

In a taxing district, a municipality can collect future property tax increases that would normally go to schools, parks and other taxing bodies. Instead, the money goes to a separate city fund for development over 23 years.

The city paid $20 a square foot for the property, but sold the Wille Road to developers for $5 a square foot. While the higher property tax money from new development was expected to cover the city's bonds, the granting of extra Cook County 6B tax incentives sealed the money-losing fate of the district, city officials said.