Lake Zurich working to extend tax zone for downtown redevelopment
Lake Zurich village board members will be asked to approve a final agreement that may allow an extension of a special taxing zone meant to spur downtown redevelopment.
A tax increment financing district has been in place since 2002 in an effort to attract downtown Lake Zurich redevelopment. The special taxing zone is supposed to expire in 2025, but the village wants to extend it 12 more years so it does not have to contend with balloon payments on debt.
Commonly called a TIF, property tax revenue is frozen at a certain amount and any additional revenue goes into public improvements rather than to local governments. Officials at schools and other taxing agencies often voice concern when a village wants a TIF to attract development because of a resulting revenue loss.
At a meeting Monday night, the village board will be asked to approve the final local agreement to extend the TIF district reached with Lake Zurich Unit District 95. Ela Area Public Library District, Lake County, Ela Township, College of Lake County and the Lake County Forest Preserve District already have agreements with the village.
If the village board signs off on the deal with District 95, said Mayor Thomas Poynton, the final step will be to secure approval for the extended TIF district from the General Assembly. He said it's hoped the proposal is before lawmakers when the six-day fall veto session starts Wednesday, Nov. 19.
Village Manager Jason Slowinski said officials are working with Republican state Rep. Ed Sullivan of Mundelein to pursue the TIF extension for Lake Zurich in the General Assembly.
“The TIF extension is critical to the village for our overall financial sustainability and, in particular, our ability to successfully manage the outstanding debt obligations associated with the TIF district,” Slowinski said.
Lake Zurich has about $28 million in outstanding debt associated with the long-stalled downtown redevelopment. Roughly $16 million of the $28 million debt is attributed to property purchases.
Village officials say annual repayments for downtown will balloon in the new budget starting May 1. They say if the TIF isn't extended 12 years past the original 2025 expiration to even out debt repayment over a longer time, the village would be forced to cover its loans from the general fund.
Poynton said Friday extending the TIF district is important to Lake Zurich.
“We have a little more breathing room to get something going, something developed for downtown,” he said.
As part of the tentative TIF extension agreement with District 95, the village would continue contributing some property tax revenue to the schools for children in homes that are part of the special downtown zone.