DeKALB – DeKalb aldermen will be asked to end plans for the South Fourth Street tax increment financing district during the DeKalb City Council meeting Monday night.
City staff have recommended aldermen vote against creating a special taxing district designed to improve the area that stretches from Taylor Avenue to Fairlane Avenue. The staff suggested the area would be ideal for tax increment financing on individual projects if they arise but not for the broad area under consideration.
“This is an area in the city everyone knows needs redevelopment,” City Attorney Dean Frieders said. “And we are certainly going to look at development there, but we feel there may be a better time to do that.”
TIF districts enable municipalities to encourage development by freezing the property tax revenues that local governments – such as schools, park districts and city government – receive for a period as long as 23 years. As the value of the property in the district increases, the increased property tax revenues are diverted to a special account and used for additional improvements.
City officials expected to collect $3.6 million in increment revenues, but that would pay for only about a quarter of the $14 million in proposed projects there.
Cleaning up the abandoned Protano’s Auto Parts site at 1151 S. Fourth St. that is believed to contain contaminated soil is the key to redevelopment in the area, said Brian Scholle, who operates a State Farm agency at 850 S. Fourth St.
“If you clean up Protano’s, I think everything else would have fallen in place,” Scholle said. “You have to beautify the area, but really the only hope was to get TIF money.”
Fourth Ward Alderman Bob Snow said he’s willing to follow the staff recommendation because he believes the TIF plan needs further vetting before it is established. He also cited the Protano’s site as the biggest concern in the area, speculating ideas for using TIF funds for cleaning up that property in order to spur commercial development would resurface.
“I think this is only delaying things,” Snow said, adding he believes the area needs economic incentives to kickstart development. “I think we will have ideas on how to clean the Protano’s site up within a year.”
The delay is a good thing for DeKalb School District 428, Assistant Superintendent of Business and Finance Andrea Gorla said.
District 428 officials opposed the South Fourth Street TIF district because of the negative impact it would have on the district’s tax revenue. In response, city and school leaders formed a joint task force to examine the special taxing district. Because of ongoing discussions in the group, alderman postponed action on the TIF district in February.
Gorla expects the group will come to a compromise by June, possibly in the form of a sharing agreement that grants some of the incremental tax to the school district.
“Without a sharing agreement in place, it’s hard to endorse something like that when the school district won’t be able to access that increment for that period,” Gorla said. “I think we will get there, we’re just not there yet.”
South Fourth Street was one of two areas considered for a TIF district, the other being the Sycamore Road TIF district. The city paid PGAV Architects $46,000 to perform a TIF district feasibility study last year.