Aurora, District 204 approve deal on Route 59 corridor development

  • Richard Irvin

    Richard Irvin

 
 
Updated 2/19/2020 4:24 PM

Aurora City Council members have approved a deal that will allow the city to offer development incentives in an area that includes Fox Valley Mall while ensuring Indian Prairie Unit District 204 gets the tax revenue it needs to educate students.

The council on Tuesday approved an intergovernmental agreement with District 204 that sets procedures and guidelines for the use of tax increment financing districts in the Route 59 corridor -- an area west of Route 59 and between Montgomery Road and the Burlington Northern railroad tracks.

 

District 204's school board approved the pact last week.

"We believe we have a strong agreement that supports the goals of economic development for the city but also provides the necessary resources to educate our students," District 204 Superintendent Karen Sullivan said.

In a tax increment financing district, property tax payments to local governments are frozen at the current level for up to 23 years. Any extra property tax money collected within the area after it is established goes into a special fund controlled by the city. The money then can be used to help pay for improvements, such as roads and other infrastructure.

While municipalities use TIF districts to promote economic development, school districts and other local taxing bodies often oppose them because they can't collect the extra property tax money until the TIF district expires.

Aurora Mayor Richard Irvin said the city wanted to avoid that. So municipal and school officials worked together to make sure District 204 "got every benefit of the development that's coming to the city of Aurora," he said.

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"It wasn't an easy lift," Irvin said. "But we came to a mutual agreement that benefits everybody involved. This shows that people working together can make a difference."

As part of the 10-year agreement, the city will limit the use of TIFs in the Route 59 corridor in several ways.

For example, TIF incentives won't be used as the first and only source of development incentives. Also, TIF districts in the corridor will expire in 15 years or less -- not the state limit of 23 years.

If a new residential development within a TIF district produces students, tax revenue generated by the property will be declared surplus. "All of that would go out to all the taxing districts as if the TIF didn't exist," said Martin Lyons, Aurora's chief financial officer.

Officials said the agreement is the culmination of months of planning and negotiations between the city and the district spurred by redevelopment initiatives in the corridor and increasing interest for future projects.

                                                                                                                                                                                                                       
 

Early last year, the city approved a redevelopment agreement for Cedarwood, a $29 million senior-oriented development in the triangle-shaped area bordered by Ogden Avenue, 75th Street, and a planned extension of Commons Drive.

The redevelopment agreement for Cedarwood included the creation of a TIF district to pay for the Commons Drive extension and stormwater retention expenses to develop the property. Because of the deal with District 204, the term of that TIF district soon will be reduced to 15 years.

City officials said other plans for the Route 59 corridor include the Pacifica Square development -- an Asian-themed shopping center at Route 59 and New York Street -- and improvements to the Fox Valley Mall property.

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