After 35 years, Libertyville's downtown taxing district is nearing its end
As has been an annual practice for the last 11 years, Libertyville officials recently rebated millions of dollars to taxing bodies with jurisdiction in the downtown commercial area.
This year, the 10 entities shared $3.12 million — representing 70% of a $4.4 million property tax increment generated in 2020.
Simply put, the increment is the difference between the amount of property taxes collected based on current values rather than the much lower values frozen decades ago.
Since 1986, the increment has been crucial to revitalizing Libertyville's downtown. While considered a success, the mechanism that allowed for the increment and its targeted use expired Dec. 31.
However, because of the way the property tax system is set up, there will be one more round of increment collected and rebated in March 2023.
“This tool has benefited Libertyville as it subsidized both parking structure projects to address a need in our community,” said Mayor Donna Johnson. “The parking lot improvements have helped support the growth of our local retail stores and restaurants.”
Facing competition from shopping malls, downtown Libertyville in 1986 was tired, dotted with vacancies and experiencing parking issues.
In a bold move, a 158-acre area on either side of Milwaukee Avenue, mostly north of Church Street, was designated by village leaders as a tax increment financing district. Then a relatively new and sometimes controversial redevelopment tool, TIFs allowed the increment to be diverted specifically to fund improvement-related expenses.
“The downtown at the time really was not doing well at all,” said Terry Weppler, who left the village board just before the TIF district was designated. He returned to serve as mayor from 2009 to 2021.
TIF districts have terms of 23 years, but can be extended. Libertyville's was set to expire at the end of 2009 but the to-do list was not complete.
Village leaders took the uncommon step of asking the state legislature to agree to extend the TIF district for 12 more years. The legislature approved the request and overrode then-Gov. Rod Blagojevich's veto. The extension — with one major difference — became official in November 2009.
In the original TIF district, the entire increment went to the special fund. Taxing bodies received the same amount of property taxes year after year even as improvements, such as a parking deck and streetscape, added value to the area.
During the extension, the village took 30% of the increment, enough to complete a second parking deck and other projects. The remaining 70% has been disbursed among the taxing bodies, which have used it mainly for general purposes rather than specific projects.
“I continue to be impressed with what TIF has accomplished in downtown Libertyville and the role our Cook Park location has played in its revitalization,” said David Archer, director of the Cook Memorial Public Library District.
Jennifer Johnson, executive director of Main Street Libertyville, a revitalization organization that hosts dozens of downtown activities and events, said the two new parking garages and other parking and sidewalk improvements have improved access to businesses and amenities significantly over the years for residents and visitors.
Weppler said residents weren't affected from a tax standpoint but the TIF district and extension “ended up better for the taxing bodies because of the increase in property values downtown.”