Geneva school district opposes TIF development plan

 
 
Updated 3/24/2016 10:49 AM
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  • The Buttermilk restaurant at State Street and River Lane is an example that redevelopment can occur in the eastern downtown without implementing a tax increment financing district, according to the Geneva school district.

      The Buttermilk restaurant at State Street and River Lane is an example that redevelopment can occur in the eastern downtown without implementing a tax increment financing district, according to the Geneva school district. Brian Hill | Staff Photographer

  • The falling-apart Mill Race Inn building on the Fox River in Geneva is one reason why Geneva wants to create a tax increment financing district to spur redevelopment.

      The falling-apart Mill Race Inn building on the Fox River in Geneva is one reason why Geneva wants to create a tax increment financing district to spur redevelopment. John Starks | Staff Photographer

The Geneva school board wants the city to drop plans for creating a tax increment financing district to spur redevelopment in the eastern portion of downtown.

The eligibility study for the proposed "Geneva Fox River Redevelopment Project Area" over calculates how much property is vacant and the degree of deterioration, it says.

"We believe the eligibility study grossly exaggerates the conditions within the RPA in an effort to support the idea that unless TIF is utilized, the area will become blighted," Rick Petesch, the school board's attorney, said Monday.

Aldermen scheduled a joint review board meeting April 7 and a public hearing May 2 about the TIF. The joint review meeting, city officials said, is the proper time for the school board to raise its objections.

"This is prime riverfront property and it will be developed whether we create a TIF or not," Alderman Tara Burghart said.

Generally, the area includes sites that front the river, from Woodward Avenue to the Union Pacific railroad tracks; on State Street, from the river to School Street; and west of the river between State and Stevens streets, west to First Street.

Why schools care

In a TIF district, the amount of property taxes paid to taxing bodies is frozen for 23 years. Any increases in property taxes due to improved property value are used to pay for work that improves the value of the property in the district. It could include public infrastructure, such as better utilities. It could also include financial incentives to private developers, or acquiring parcels to bundle for a larger development. TIFs can be used to fix blighted areas, or to do things to "conserve" properties to prevent them from becoming blighted, which is what Geneva proposes.

"Private enterprise has been extremely active in this area," Petesch said, listing businesses in the district that have made "substantial investments," including the Malone Funeral Home, Buttermilk and Foxfire restaurants, two law firms, School of Rock and Doerner Jewelry.

The eligibility study determined the vacancy rate by square feet, at 27 percent. But two large vacant properties ­­-- Geneva Bottling Works and the Mill Race Inn restaurant ­-- skew the result, he said.

"It inflates the number and makes it look on the whole the district, the proposed project area, has excessive vacancies. We think that your consultant has stretched the definitions a little bit," Petesch said.

Experts the school district hired say less than 10 percent of the parcels have excessive vacancies, he said.

The school district makes up about 68 percent of a Geneva property tax bill.

The joint review board includes Waubonsee Community College, the school district, the library district, Geneva Township, Kane County and the park district. A member of the public also sits on the board.

The review board can only make a recommendation. If the review board rejects the plan, the city could submit changes. If the board still rejected the plan, the city council would need a three-fifths majority, or six "yes" votes, to institute the plan.

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