DeKalb declines new TIF district for Sycamore Road

Published: Tuesday, Dec. 10, 2013 11:06 a.m.CDT • Updated: Thursday, Dec. 12, 2013 12:18 a.m.CDT

DeKALB — An effort to create a special taxing district to help improve two blighted parcels in the Sycamore Road retail area died at Monday's City Council meeting.

No one made a motion to approve ordinances to create the Sycamore Road tax increment financing district, which would have funneled taxes associated with increasing property values in a small area toward economic development.

The proposed district would have included the former Small's Furniture property, which is being rehabilitated by Pappas Development, and the Northern Illinois University Art Annex at 2211 Sycamore Road. Interim City Manager Rudy Espiritu explained that the property most in need of rehabilitation, the former Nelson veterinary office at 2131 Sycamore Road, cannot be part of the new district because it hasn't been annexed into the city.

Tax increment financing districts enable municipalities to encourage development by freezing the property tax revenues that local governments receive for a period as long as 23 years. As the value of the property in the district increases, the increased property taxes are diverted to a special account and used for additional improvements. The city has used tax increment financing in other established districts for many projects, including ongoing improvements to the Egyptian Theatre and $2 million it has committed to the DeKalb library expansion project.

"If there's no need for this incentive in the future, we simply close the TIF," Espiritu said.

Before voting on the creation of the district, aldermen had to vote on removing the Pappas development from the Central Area tax increment financing district before it could be added to a Sycamore Road district.

"If you do not intend to approve the Sycamore Road TIF, you don't want to remove the Pappas property from the Central Area TIF," Espiritu reminded council members. "The funds already obligated for development incentives would have to come from the general fund if that property is not in a TIF district."

He explained that the increment from the Pappas property could be used to develop other sites in the new district.

The city agreed last spring to loan John Pappas of Pappas Development $423,900 in TIF funds to redevelop the former Small's Furniture property. He has seven years to repay the loan through generation of new sales- and property-tax revenue.

Pappas has said economic incentives were essential to redevelopment as the total cost was estimated at about $4.2 million.

Mayor John Rey said the city has received inquiries about Sycamore Road properties without regard to incentives, perhaps making them unnecessary.

The council voted 7-1 against removing Pappas' development from the Central Area tax increment financing district. Seventh Ward Alderwoman Monica O'Leary cast the lone vote to remove it. She gave no reason for her vote.

As a result, the three proposed ordinances to create the new district, which would have included only the NIU Art Annex, died without a motion to bring them to a vote.

Council members plan to address the proposed Fourth Street tax increment financing district in late January.

More News

Watch Now

Player embeded on all DDC instances for analytics purposes.

Huskie Bowl: Rod Carey

More videos

Reader Poll

What's your favorite Easter tradition?
Church services
Family dinner
Easter egg hunt
Easter bunny
Decorating eggs