DeKALB – The city is researching the pros and cons of expanding its number of tax increment financing districts.
At Monday’s meeting, City Manager Mark Biernacki said the DeKalb City Council will be presented with a report by the end of 2012 on whether certain areas of the city should be designated as tax increment financing districts.
In these districts, local taxing bodies can only collect on a property’s base value for a maximum 23 years. Property taxes are not capped though. The money collected above the base value – referred to as the increment – goes into a special fund to pay for improvements within the district.
The goal of the districts is to encourage redevelopment in blighted areas, and Biernacki identified three possible district locations. Those are along South Fourth Street, past Taylor Street toward Huntley Middle School; the apartments in and around Greek Row; and parts of Sycamore Road near Hopkins Park.
Both Mayor Kris Povlsen and Second Ward Alderman Tom Teresinski said that the South Fourth Street corridor between City Hall and Huntley Middle School needs redevelopment.
“In my view, we need to make sure there’s viable retail [along the corridor],” Teresinski said. “If something were to be accommodated, it’d be a way to restart some of the business down that corridor.”
Officials are in the planning phases, and nothing has been voted on by the council, Teresinski said. Biernacki said the process for creating a special taxing district requires four to six months to complete. Any vote on the creation of a new district would not occur until lspring or summer of 2013, he estimated.
DeKalb is not limited in the number of TIF districts it can create at one time, Biernacki said. But the districts are limited in lifespan. The designation normally expires after 23 years, although the city can petition the Illinois General Assembly for a 12-year extension.
This is what DeKalb did in 2008. The Central Area TIF district, created in 1985, was set to expire that year until the city successfully lobbied the state for an extension.
“You don’t get to do that again,” Biernacki said. That district expires in 2020.
The Central Area TIF, which encompasses parts of Lincoln Highway and Sycamore Road, is projected to have $2.8 million sitting in its account by June 30. A second district, which includes the neighborhood south of Lincoln Highway and north of Taylor Street, will have $5.9 million in its account.
But the city is expecting to see revenues to these accounts drop between July 2013 and June 30, 2014, said Jennifer Diedrich, the city’s economic development coordinator. She said property values are expected to fall 5 percent in fiscal 2014.