DeKALB – The city’s Central Area Tax Increment Financing District is expected to have a fund balance of $2.87 million by the end of the fiscal year on June 30, 2013.
This is according to a report that the city’s Economic Development Coordinator Jennifer Diedrich will present to the DeKalb City Council on Monday.
The report does not include a potential $900,000 loan that the city would give to Darden Restaurants as a forgivable loan so the company can build an Olive Garden along Sycamore Road.
City Manager Mark Biernacki said that expenditure might count toward fiscal 2014, when the district is projected to have a fund balance of $2.7 million.
Diedrich was unavailable for comment Friday, but Assistant City Manager Rudy Espiritu described the strength of the city’s two tax increment financing accounts.
“Overall they’re doing well,” Espiritu said. “Even with all of these projects that are coming along.”
The Central Area TIF District, which encompasses the downtown and parts along Sycamore Road, was created in 1986.
The city also has a second TIF district known as TIF District 2, which includes some neighborhoods south of Lincoln Highway to Taylor Street. The city pays for various street improvements in the area, in addition to maintenance on the DeKalb Municipal Building. That account is projected to have $5.96 million in it by the end of fiscal 2013.
When a tax increment financing district is created, the base value of the property within its borders is calculated, and other local taxing bodies can only collect taxes on that base level for 23 years. Taxes paid by property owners within the district continue to rise, though, and the money collected above the base rate – the increment – goes into a special fund to pay for improvements within the district.
The district was set to expire in 2008, but it was extended for another 12 years. Espiritu said the district will expire Dec. 31, 2020.
Espiritu said the fund is used to make various improvements through the district. A number of improvements are various street and sidewalk projects, but this money has also been used for repairs at the Egyptian Theatre and a grant to Safe Passage.
“Throughout the life of this TIF, we’re maintaining about a $3 million to $7 million fund balance,” Espiritu said. “You’re going to see that every year. We’re going to budget more improvements each year. This is a guide until the end of the TIF.”