Palatine wants to extend life of downtown TIF district for public projects
Palatine wants to extend the life of its downtown tax increment financing district to do public improvements and is seeking support from the affected taxing bodies.
TIF district is set to expire at the end of 2022, after a 23-year maximum life span under Illinois law. That can be extended by an additional 12 years with a bill passed by the General Assembly.
Village Manager Reid Ottesen said the largest infrastructure project on the horizon is $7 million in stormwater improvements at Colfax and Smith streets, where rainstorms cause power outages and flooding that makes it difficult even for school buses to drive through.
Other possible projects are: upgrading the downtown train station and parking lot; doing pedestrian enhancements; demolishing the former temporary village hall at 150 W. Wilson St., which might need soil remediation work; and upgrading village parking lots where events like Oktoberfest take place.
In a TIF district, property tax revenues that normally go to local taxing bodies -- such as the village, schools and park district -- are frozen at existing levels. Property tax revenues beyond those levels, stemming from increases in the district's equalized assessed valuation, are used to finance improvements within the TIF district.
If the downtown TIF district were extended, none of the additional revenues would go to private projects, Ottesen said.
The village council gave its OK to the plan in December. The process formally began Wednesday with a proposal from Ottesen to the joint review board, which is composed of the 14 affected taxing bodies.
Palatine Township Elementary District 15 has the largest share of property tax revenues, at about 35%, followed by Palatine-Schaumburg High School District 211, the village, Palatine Park District, Cook County, Harper College, Metropolitan Water Reclamation District of Greater Chicago, and the Palatine Public Library. The others have less than 1% share.
Ottesen said the village would pledge to distribute 60% of surplus TIF revenues with the other taxing bodies through 2026, 75% through 2030 and 90% in the final years. Assuming a yearly increase of 2.5% in the district's EAV, the first year distribution would be $4.4 million, with about $1.5 million going to District 15 and $1.2 million going to District 211.
Diana McCluskey, hired last year as chief school business official for District 15, expressed hesitation. She said she recently completed the school district's five-year projection that took into account the expiration of the downtown TIF district in 2022.
The joint review board has discussed the possible extension over the last three years. Palatine Public Library Executive Director Jeannie Dilger said she initially had concerns but is now "fairly supportive" after voters approved a library property tax increase in spring 2019.
Dilger proposed shortening the duration of the TIF district's extension. "I think that might be more palatable to the board," she said.
The 12-year extension is set by law, but the village could possibly commit to disbursing the entirety of TIF revenues after three or four years, Ottesen said.
"Our goal is to get as much development as we can and do as much infrastructure improvement as we can, so that when it's all done, we all benefit," he said.