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DeKalb weighs adding TIF districts

Interim City Manager - DeKalb
Espiritu_Rudy Interim City Manager - DeKalb

DeKALB – One thing became clear Thursday morning as the representatives of DeKalb’s eight local taxing bodies discussed creating new tax increment financing districts.

South Fourth Street is going to need a lot of help, and TIF might not fix all of the problems there. But there might not be other options available.

“If you don’t create the TIF, then it will just continue to be the way it is, because there is no funding source to incentivize development,” interim City Manager Rudy Espiritu said.

DeKalb already has two established TIF districts, which are a special mechanism local governments can use to spur development in blighted areas.

As development occurs, taxes associated with the higher property values increase.

A portion of those taxes, however, are diverted into a special fund that helps pay for development in the area for 23 years.

The established districts are in downtown DeKalb and along Sycamore Road, adjacent to a proposed district.

On Thursday, Espiritu and Jennifer Diedrich, the city’s economic development coordinator, met with Joint Review Board members to discuss creating TIF districts along South Fourth Street.

They also discussed creating a small district with two parcels: the former Nelson Veterinarian property, 2131 Sycamore Road, and the Northern Illinois University Art Annex, 2211 Sycamore Road.

The members of the joint review board represent different taxing bodies in the city – DeKalb School District 428, the DeKalb Park District, the DeKalb Public Library, DeKalb Township, the DeKalb Sanitary District, Kishwaukee College, DeKalb County and the city itself. A member of the public sits on the board as well.

The board is required by law to issue a report of its recommendations about the two proposed districts within 30 days of its first meeting, or by July 26.

The board is scheduled to meet and issue recommendations July 24.

The DeKalb City Council is scheduled to host a public hearing Aug. 12 on the potential TIF districts.
Because of the effect a TIF district has on other bodies, the city has set up a sharing program when it reaches a surplus. In the proposed district along Sycamore Road, the city is planning to share 15 percent of the increment surplus with the other taxing bodies. After 23 years, the other districts would receive a total of $792,136.

As a result of the sharing, the city is anticipating breaking even there. With the 15 percent share in place, the city would collect $4.48 million in increment revenues over the 23-year life span of the TIF, while paying out for $4.47 million in proposed projects there.

But Espiritu said he doesn’t think a sharing program will be possible for South Fourth Street. The city is estimating it will collect $3.6 million in increment revenues, but that would pay for only less than a fourth of the $14 million in proposed projects there.

Under the proposal, about $5.5 million would go to building rehabilitation. PGAV Planners, the urban planning firm the city hired to conduct the TIF study, found that 77 percent of the buildings in the proposed district were more than 35 years old. In addition, 66 percent of the buildings in the proposed district had signs of deterioration.

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