Lawsuit lingers over public financing for Lakemoor Woodman's project

Dispute over Lakemoor tax district to develop Woodman's still isn't over close to opening day

  • Construction continues on the new Woodman's grocery store at routes 12 and 120 in Lakemoor. The store is scheduled to open Labor Day weekend, about a month before a lawsuit over public financing for the project is set to go to trial.

      Construction continues on the new Woodman's grocery store at routes 12 and 120 in Lakemoor. The store is scheduled to open Labor Day weekend, about a month before a lawsuit over public financing for the project is set to go to trial. Paul Valade | Staff Photographer

  • Construction continues on the new Woodman's grocery store at routes 12 and 120 in Lakemoor. The store is scheduled to open Labor Day weekend, about a month before a lawsuit over public financing for the project is set to go to trial.

      Construction continues on the new Woodman's grocery store at routes 12 and 120 in Lakemoor. The store is scheduled to open Labor Day weekend, about a month before a lawsuit over public financing for the project is set to go to trial. Paul Valade | Staff Photographer

 
 
Posted7/16/2019 5:22 AM

As construction of a huge Woodman's Food Market at routes 12 and 120 in Lakemoor steams toward a Labor Day opening, a lawsuit over the development lingers on more than four years after it was filed.

Barring a settlement, the case brought by Wauconda Unit District 118, Wauconda Township and the Wauconda Area Library against Lakemoor will go to trial Oct. 7. Whether it gets that far is unknown, although it won't be from a lack of effort, as the two sides have been discussing a settlement since May 20.

                                                                                                                                                                                                                       
 

"The judge encouraged us to sit down and have settlement negotiations," Mayor Todd Weihofen said.

The result has been back-and-forth proposals addressing whether the tax increment financing district created to develop the long-vacant property will be cut short or continue for its entire 23-year designation.

The plaintiffs most recently proposed allowing the TIF to continue until the village realizes $6 million in property tax revenue, or until July 1, 2026, whichever comes first. The village then would dissolve the district, meaning the other taxing bodies would receive their full measure of property taxes on the property.

Lakemoor rejected that proposal, saying it was not feasible given the amount of debt associated with the project. The village will have invested about $13 million in road and utility improvements by then, including up to $6 million in incentives to Woodman's.

The village countered with an offer to split the property tax proceeds 60/40 for the remainder of the district's life and not extend the TIF district when it expires.

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"They (the other governments) would have gotten nothing if the TIF wasn't established to incentivize and attract development," said Matt Dabrowski, the village's director of community and economic development.

The length of the TIF is important because property taxes that otherwise would go to the schools, library, park district and other local governments each year are funneled instead into a special fund to pay for roads and other site improvements.

That diversion has been the crux of the argument by the plaintiffs, which sued a day after Lakemoor officials designated the 74 acres, as well as an area north of Route 120, as tax increment financing districts in February 2015.

A year later, the village announced Woodman's had reached an agreement to buy the open property to build a 240,000-square-foot grocery store and gas station/car wash/oil change facility.

                                                                                                                                                                                                                       
 

Weihofen said Woodman's will create jobs, spark other development and be good for the village and other communities.

The three taxing bodies maintain the property would have developed without the TIF district.

"We strongly believe the (south) TIF doesn't qualify," said Dean Krone, an attorney representing the plaintiffs. He said his clients are considering the most recent proposal from the village.

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