The proposal for the DeKalb School District 428 to swap about 42 acres of property it owns near Huntley Middle School for about 34 acres owned by a developer near the new DeKalb High School is prudent, if not perfect.
The plan, presented publicly to the school board on Tuesday, would enable the district to accomplish three key goals: Trade an asset that it can’t use for one that it can; free the district from a pending financial obligation to a developer, and encourage residential development that officials say the district needs to ease the property tax burden.
On the first two items at least, we agree.
District officials say that the property near Huntley, which extends west of the intersection of Fairview Drive and Fourth Street and is used primarily for community soccer fields, probably will not be of any use to the school district, either now or in the future. There is ample capacity at Huntley, and there also are plenty of school buildings on that side of the district.
There is no room to expand at the new high school site, however, and developer ShoDeen Inc. is formulating plans for a housing development in the area. School officials fear the high school site could become surrounded by development, leaving no room for any future expansion.
Time also is a factor. When school board members were negotiating the price for the land that was ultimately used for the new high school, they deferred part of the cost by offering developer Macom Corp. a $1.05 million credit on future developer impact fees. No building has taken place since, but under the terms of the deal, the district must start paying 4 percent interest on that credit in 2013 to ShoDeen, which purchased the property near the high school from Macom.
The interest payments will be about $42,000 a year, about the cost of a new, full-time teacher. The district expects a $2.3 million deficit this school year and can’t afford to be wasting money. The land swap deal would also net the district about $123,000 in cash because it is trading a larger tract of land for a smaller one.
School officials also say that the community could use some housing growth after years of stagnation. There are signs that the market for new houses is improving nationally, and although Illinois housing prices are lagging much of the rest of the nation, they are bound to catch up sometime.
New home construction would boost the total property value in the district and help slow the rising property tax rates that have been hitting homeowners since the Great Recession. The real benefit for taxpayers, though, would be if the added residents attracted new businesses to the area.
Residential development in and of itself isn’t the solution to rising tax rates. For one, the developer would not be required to pay any school impact fees either until ShoDeen’s new development adds 600 new students to the district, or seven years, whichever comes first. (Although the district would be due more than $650,000 for improvements made in the area around DeKalb High School when development begins nearby.)
Under the formula in DeKalb’s Unified Development Ordinance, the $1.05 million impact fee credit would cover cash impact fees due on 521 four-bedroom, single-family houses. That or 600 new students could put a strain on the district, requiring more teachers and more space available on buses and in classrooms.
Youth soccer players and their families also stand to lose the use of facilities they have enjoyed for several years, although that would not be immediate, which should allow time for alternate arrangements to be made, including possibly using other school property.
Although the deal is not perfect for the school district, the lingering $1.05 million impact fee credit, and the drag it will place on the school district’s finances, will not go away unless development occurs. What’s more, if the district isn’t going to have any use for the property it owns near Huntley, it might as well transfer it to someone who will use it and return it to the property tax rolls.
We recommend the district negotiate the most favorable terms it can for the proposed land swap and execute it before they are scheduled to start throwing money out the window in 2013.