DeKALB – The DeKalb City Council will hold a public hearing Aug. 12 on establishing two tax increment financing districts in the city.
While Monday night’s vote was just for the public hearing dates, 1st Ward Alderman David Jacobson did not want to see another TIF district established along Sycamore Road.
While the council voted 7-0 to set a hearing date for a TIF district along South Fourth Street, Jacobson was the lone “no” vote on setting a hearing date for the Sycamore Road-based district. Sixth Ward Alderman Dave Baker was not present.
“I have some serious qualms believing in the necessity of a TIF in one of our major business corridors that attracts other multinational tenants,” Jacobson said in an interview. “I think it’s silly to incentivize
an area that is prime retail, prime commercial space, with public dollars.”
The city is considering establishing new TIF districts along a narrow stretch of South Fourth Street, and with two parcels along Sycamore Road that include the former Nelson Veterinarian property and the Northern Illinois University Art Annex.
Jacobson said there’s more of a need for a TIF on South Fourth Street. Mayor John Rey partially disagreed, stating that both areas are blighted and need help.
“The areas have been studied, and TIF counsel has indicated that those two areas are justified for TIF financing to improve those blighted areas,” Rey said. “I have heard a number of citizen comments that have indicated it’s an appropriate time to deal with that Sycamore Road blighted condition property.”
First Rockford Group, a Rockford-based development firm, has a contract to purchase the former Nelson property. The firm could receive public funding to bulldoze and develop the site if the district is established.
Jacobson, a vocal critic of how TIF is used, said private companies often overstate how much it would cost to redevelop the property. He pointed to Darden Restaurants, whose officials asked for a $900,000 loan so they could transform the old Small’s Furniture building into an Olive Garden. That plan was later abandoned.
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.
With the public hearing set, the city will notify other local taxing bodies such as DeKalb School District 428 and the DeKalb Park District. These local governments will meet later this month to review the TIF proposal.
Within a month after meeting, the groups will jointly issue a report on how the proposed districts would affect the different taxing bodies.