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New DeKalb TIF districts could include old vet office

DeKALB – First Rockford Group, a Rockford-based development firm, has a contract to purchase the former Nelson Veterinarian property, which sits south of the former Small’s Furniture building demolished this week.

The parcel, plus the Northern Illinois University Art Annex, is one of the two areas DeKalb leaders are considering for new tax increment financing districts, which provide money for economic development incentives.

The second district would run along South Fourth Street, stretching from Taylor Street to Fairlane Avenue. City Manager Mark Biernacki said the narrow district would include most of the area’s commercial property; it excludes residences.

On Monday, aldermen will consider scheduling public hearings on creating two new districts. Biernacki said the council will approve only the date of the public hearings, not the districts themselves. City staff suggested holding the hearings Aug. 12.

“It’s action to essentially kick the process off,” Biernacki said.

A similar deal was arranged for the construction project at the former Small’s Furniture site, which was slated for an Olive Garden before the restaurant decided against opening new locations. City leaders will pay developer John Pappas $423,900 in installments for building a retail space that will attract new businesses to the city.

The Nelson property at 2131 Sycamore Road must be annexed into the city before it can be included in a TIF district, but the district would be necessary to help the potential developers deal with the costs of transforming the Nelson property, including demolition and leveling off the property, Biernacki said.

“Everyone would agree in this case that those properties would meet these criteria,” Biernacki said.

TIF is a special mechanism local governments use to spur economic development. Property taxes rise, but the difference between the base and the new level is diverted into a separate account the city can use for projects in that district.

These districts are established in areas that have blighted properties in them, and they have a 23-year life span initially.

Once a public hearing is set, the city must notify other local taxing bodies – including DeKalb School District 428 and the DeKalb Park District – of its intentions.

On June 26, the city and these eight other taxing bodies will meet and review the proposed districts. Within a month afterward, the Joint Review Board will issue a report on how the proposed districts would affect the different taxing bodies.

Andrea Gorla, assistant superintendent of business and finance for District 428, said she is still calculating how the school district’s revenue would be affected. The majority of DeKalb’s revenue comes from property taxes.

The South Fourth Street area needs revitalization, Gorla said.

“The challenge is [that] it’s a 23-year obligation of not feeling the effects of that revitalization,” Gorla said.

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