Extension of Palatine Downtown TIF takes steps forward
A proposed extension of the Downtown Tax Increment Financing District in Palatine is taking steps forward with support from key players.
The TIF district, created in 1999, is set to expire at the end of next year, but the village wants to extend its life to fund a few more projects.
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.
Village Manager Reid Ottesen told the village council Monday that the Downtown TIF District has been successful - its equalized assessed valuation has quadrupled in the last 22 years, documents show - but the 2008 recession caused fewer-than-projected revenues over the years.
TIF districts can be extended only with a bill passed by the Illinois General Assembly. By law, each extension must be 12 years.
The support from all of the affected taxing bodies - 14, including the village - is key to obtain an extension, Ottesen said.
To that end, Palatine is committing to keeping TIF revenue increments only in the first two years of the extension, and then disbursing 100% to the taxing bodies until expiration, Ottesen said.
That would amount to about $2.7 million for Palatine Township Elementary District 15 and $2.2 million for Palatine-Schaumburg High School District 211 in the third year, increasing each year after, school district documents show. Those are the two largest taxing bodies within the Downtown TIF district.
The village council on Monday approved an intergovernmental agreement formalizing the plan with District 15 and District 211.
The agreement also will apply to all the other affected taxing bodies, Ottesen said.
The District 15 school board approved the intergovernmental agreement at its Oct. 13 meeting, district spokeswoman Rebecca Latham said.
Representatives of District 211 did not return a request for comment Monday.
Ottesen said District 211 had an initial favorable response to the agreement and also is expected to approve it. Latham said the agreement is expected to be on the agenda for the Oct. 21 board meeting for District 211.
Palatine would get about $15 million in the first two years of the TIF district extension "to finish absolutely everything that's been on our drawing board," Ottesen said.
The main project is $7 million in stormwater improvements at the intersection of Colfax and Smith streets, where rainstorms cause power outages and flooding, making it difficult for drivers and even school buses to drive through.
Other projects include: upgrading the downtown train station and parking lot; pedestrian enhancements; demolishing the former temporary village hall at 150 W. Wilson St.; and upgrading village parking lots where events like Oktoberfest take place.
"This is a win-win for everybody," Ottesen said.
The TIF district taxing bodies comprise the joint review board. Ottesen first formally floated the idea of extending the life of the Downtown TIF District at a joint review board meeting in January, when he proposed distributing 60% of surplus TIF revenues to the other taxing bodies through 2026, 75% through 2030 and 90% in the final years.
In the ensuing months, there have been further discussions between Ottesen and representatives of the taxing bodies. Ottesen and Mayor Jim Schwantz gave joint presentations to the school districts.
Schwantz commended Ottesen for his positive leadership. "This is yeoman's work, to be able to get this done," he said.
Ottesen said he will be meeting with state Sen. Ann Gillespie and state Rep. Tom Morrison, with the goal of getting the bill on the agenda for the spring legislative session.
"It's going to take a lot of effort this spring, probably several trips down to Springfield to testify ... but I think it's going to make us a stronger community," he said.