District 95 not confident about Lake Zurich extending TIF life

Lake Zurich Unit District 95 officials say they want more information before they can sign off on Lake Zurich's plan to extend the life of a special taxing district established for downtown redevelopment.

Village officials have said they need more time to pay off roughly $26 million in outstanding debt incurred to revitalize downtown. For that, the village plans to refinance $16 million in existing loans.

But it must first convince area taxing bodies to support extending the 23-year life of the downtown tax increment financing district now set to expire in 2025. That would require General Assembly approval.

For District 95 and other affected government bodies, that means losing out on increases in property tax values, captured into the special fund used for redevelopment purposes, for 12 more years.

It could affect Lake County, Lake County Forest Preserve District, the Lake Zurich Rural Fire Protection District, Ela Area Public Library, and the College of Lake County.

District 95 officials said they are concerned about the village's ability to pay its bills since it presently owes $532,000 toward tuition for new students generated from the TIF district during the 2007-08 school year.

District 95 Superintendent Brian Knutson said officials want to know more about the village's commitments to its new master developer.

"We'd like to see the projections from the developer and what the new plans would be, the financial projections with or without the extension, (and) what other options are they exploring if the TIF is not extended," Knutson said.

District 95 school board member Jim Hussey suggested the village consider dissolving the TIF.

"Why not dissolve the TIF, negotiate with the creditors rather than double down on a bad idea," said Hussey, who stressed he does not speak for the school board. "Let the market forces work and write off the TIF as a bad episode in the village history, and then pay it off over time."

Lake Zurich has spent more than $32 million in redevelopment costs, yet its two premier downtown projects stalled in 2007.

Dissolving the TIF is not an option, village finance director Al Zochowski said.

With or without the TIF extension, Zochowski said, the outstanding debt must be repaid by 2025 at roughly $1.7 million annually.

"We would still have to make those payments and we wouldn't have any incremental revenue," he said. "We would have to use sales tax dollars that now go to provide services within the community. If we did that, we could close down the police department and fire department, and we could never shovel snow again ... That to us is not a viable alternative."

Even without TIF revenues beyond what's generated from the only completed redevelopment project, village officials said, the debt should be paid off by 2028-29.

Zochowski said taxing bodies have requested more information, but he doesn't consider that lack of support.

"When this TIF is successful, everybody is going to benefit from it," he said. "They just have to give us the opportunity. We are asking to start all over again."