Des Plaines aldermen agree to dissolve failed Five Corners TIF
Nearly eight years to the day from when Des Plaines aldermen approved a controversial tax increment financing district, the current city council has decided to dissolve the district due to a lack of the redevelopment they hoped it would inspire.
The so-called Five Corners TIF, a 70-acre, largely industrial area north of Des Plaines' downtown roughly bounded by River, Rand and Golf roads, was set up in November 2006. One plan envisioned the construction of 385,000 square feet of new retail, restaurant and commercial space, 22,000 square feet of office space, 38 townhouses, and street improvements, green space and new parking in the TIF district.
The council approved the TIF district on a 7-1 vote one day before 78 percent of voters rejected it in a nonbinding referendum question.
On Monday, aldermen agreed unanimously to terminate the city's fourth TIF, effectively closing the books on bold plans that never got off the ground.
Officials had hoped years ago that setting up the TIF - by freezing property taxes paid to local governments for up to 23 years - would allow new revenue being collected to pay for redevelopment costs. As it turned out, property values declined, and no such revenues were brought in.
George Sakas, the city's director of community and economic development, said there's no scenario in which property values will rise between now and 2029 - when the TIF was due to expire - to generate enough incremental dollars that could be used to spur redevelopment.
"Why have the properties in the TIF if nothing in the close, foreseeable future is going to happen?" Sakas said.
He said some of the challenges posed by the area that have hampered redevelopment efforts include needed environmental remediation on many sites, flooding, configuration of parcels, and layout of streets.
There are 120 properties within the district that belong to 89 different owners. Many of them lobbied against the TIF, and some sued over its creation, claiming the district was improperly established. Two of those suits remain.
Aldermen took a vote on ending the TIF without making any public comments during Monday's city council meeting, but Sakas said they've discussed the plan previously during closed sessions. The meetings were held behind closed doors because of the ongoing litigation involving the TIF, he said.
City officials say they haven't issued any bonds or incurred any contractual or debt obligations since the TIF was set up. But there have been administrative costs of as much as $50,000 a year involved in management of the TIF.
"There's no reason to have that overhead," Sakas said.