As Geneva TIF vote nears, city and school district don't see eye to eye
The Geneva school district and city officials don't see eye to eye on a proposed tax increment financing district.
The school district believes the east side of downtown is a thriving area that doesn't need Geneva tax dollars to be maintained or improved.
The city, on the other hand, believes the east side of downtown is in decline, and TIF dollars are needed to halt that and improve private and public properties, to increase property values and ultimately benefit the school district.
The disagreement will come to a head Monday night when the city council is scheduled to vote on establishing TIF District 3, the Geneva Fox River Redevelopment Project Area.
TIF District 3 is about 98 acres. It includes sites along the Fox River from Woodward Avenue to the Union Pacific railroad tracks; parcels on State Street, from the river to School Street; and sites on the west bank between State and Stevens streets, west to First Street, excluding the condominiums at River and Hamilton streets.
In a TIF district, property tax payments to government bodies are frozen at the current level for up to 23 years. Any increases in taxes due to improved property value are instead put into a fund managed by the city. The money could pay for public and private work that led to the improvement in values.
TIF 3 includes the closed Mill Race Inn restaurant and the former Geneva Bottling Works, as well as a vacant strip mall and gasoline station. The school district acknowledges the status of the properties, but disputes the city's contention about the overall vacancy rate, as well as the level of deterioration throughout the proposed district.
1. The school district says the TIF district will put an unfair burden on the rest of Geneva school, library and park district taxpayers, including those in the unincorporated areas of the districts such as the Mill Creek subdivision.
The districts would continue to get the same amount of property taxes they currently collect off the properties unless the value of the property in the district decreases. For the school district that's about $423,000 a year.
The school district and city agree that if those taxing bodies increase their tax levies, the other taxpayers in the districts and city will have to absorb that increase. The Geneva school district levied $83,277,198 this year.
2. Is it fair to the Mill Creek taxpayers?
About one-third of Geneva school district students come from an unincorporated area west of Peck Road, including the large Mill Creek subdivision. Two elementary schools are in the subdivision.
Since the taxpayers don't live in the city, they have no official say in city matters. The other taxing bodies, including Geneva Township, the Geneva Public Library District and the Geneva Park District, could have spoken for them at the Joint Review Board hearing in early May. Only the school district, Kane County and Waubonsee Community College sent representatives to the meeting. The board voted 3-1 to recommend TIF District 3.
3. There are other ways to spur development, the school district says, such as making it an enterprise zone or offering tax incentives.
The city could apply to the state to have the area declared an Illinois Enterprise Zone. If it qualified, businesses could apply for several state investment incentives and tax credits, and the city could offer local incentives. The state can designate up to 12 enterprise zones a year.
The school district says it would consider rebating part of its property taxes for developments on individual parcels. It agreed to do this several years ago when a factory considered moving to a site in Batavia that is in the school district.
The school district has suggested forming a community task force to brainstorm ways to attract businesses to the proposed TIF district area. Longtime resident, RiverPark organizer and former school board member Sharon Jones supported the idea of a task force at a council meeting May 22. "Do we need this tool? ... People would die to live in this town," Jones said, saying Geneva has high-quality schools, parks and other amenities.
The city's answer: A task force can't help with money. When businesses in a TIF district apply for city aid, they have to submit a report on the cost of their project and the money they are willing to spend, and prove that unless they get some assistance with the gap between the two, the project would not be feasible.
A task force also wouldn't address costs of public infrastructure improvements the city is suggesting, such as putting in larger water and sewer lines. The city could borrow money and pay it back with the TIF increment.
4. Double TIF-ing?
The school district says if the TIF is enacted, it and the others will have received limited property taxes from many of the properties for 46 of 57 consecutive years (1982 to 2039), because those properties were in the 37-acre TIF 1, which expired in 2005. TIF 1 ran roughly from Stevens to James Street, Route 31 to Bennett. During the life of TIF 1, there was $31.9 million in private investment and $4.29 million in public investment, according to the final report.