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DeKalb City Council moves forward on TIFs

DeKALB – DeKalb aldermen took a step forward Monday in creating new tax increment financing districts along South Fourth Street and 2131-2211 Sycamore Road.

The two areas were identified in a preliminary report as being qualified for a special tax mechanism that local governments use to encourage development.

City Manager Mark Biernacki said in an interview that the “ball” on the TIF process will begin rolling sometime in February, if the City Council approves a contract hiring a firm to begin the work on creating these districts.

Biernacki estimated the cost of an agreement to cost between $35,000 to $45,000 a district. He added that the council can reimburse itself in the future by allocating money from the special fund to the city’s general revenue fund.

All of the aldermen voiced their support in creating this special tax mechanism to help out these blighted areas, with the exception of 6th Ward Alderman Dave Baker, who was absent from the meeting.

As he has done in the past, 2nd Ward Alderman Tom Teresinski renewed his support for revitalizing the South Fourth Street area.

“I think it’s an excellent time to reconsider these efforts, especially on the south side,” Teresinski said.

The other aldermen agreed. Fifth Ward Alderman Ron Naylor noted that the area has been in need of development for a long time.

However, Teresinski expressed concerned if now was the right time to create a TIF district in the South Fourth Street area.

TIF districts freeze property taxes at a base level for 23 years. As the property values increase, the different between the base and the property taxes are captured in a special fund that can be used for economic and public improvements.

But Teresinski said he expected property values in that area to drop again. If property taxes dropped below the base, no increment is collected. Biernacki acknowledged this is a concern, but he noted the limited lifespan of a nearby TIF district.

The city already has two districts. City officials have talked about diverting money from these districts – which encompass areas south of Lincoln Highway and between Sycamore Road and Lincoln Highway, respectively – to the new districts to jump start them. City officials can do this so as long as they are adjacent.

The lifespan of a district can be extended by another 12 years through action from the General Assembly. Once it expires, it is gone forever – including any money left in the accounts.

Nine other local governments would find their property tax revenue limited if the TIF districts were created. Biernacki said he has notified those different bodies of the report, and invited them to be a part of the discussion. However, he noted that the decision to create these districts rests with the City Council alone.

The report also examined the area along West Lincoln Highway between the river and the western edge of the city, as well as Greek Row, as potential sites for TIF districts. The report found that potential to be weak, and as such, the council did not seriously consider them.

David Jacobson, who as an alderman represents Greek Row as a part of the 1st Ward, said he hoped those areas don’t get lost in the shuffle.

“Exhibits A and B are still problem areas. We still need to find a mechanism there to help those areas,” Jacobson said. “We have to make a concerted effort to identify other funding sources, other possibilities going forward for reinvestment to those areas.”

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