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Regardless of whether the city of DeKalb could create a new tax increment financing district once its two current districts expire, much more discussion is needed by city council before they can determine whether the city should.
In anticipation of the expiration of one of the city’s two TIF districts at the end of the year, the DeKalb City Council held a second TIF phaseout discussion during Monday’s committee of the whole meeting. The discussion was a continuation of a Sept. 19 meeting where the creation of a new TIF district was first introduced.
DeKalb Economic Development Planner Jason Michnick asked a number of questions regarding phaseout options for council consideration. Some short term policy questions he proposed were whether TIF funds should be spent on non-transformational rehabilitation projects with low costs, what role TIF should have in subsidizing deferred maintenance and whether TIF funds should be used to support purely residential projects.
Second Ward Alderman Bill Finucane said low-cost rehabilitation should account for a portion of the remaining funds generated in TIF and referenced the changes such work made to the Chilton’s Sporting Goods building on 248 E. Lincoln Highway.
First Ward Alderman David Jacobson, however, said projects like replacing awnings and windows or repainting has done nothing to raise the value of the buildings downtown, raise the value of the equalized assessed valuation or raise the rent rates.
“You can’t force downtown to be successful,” Jacobson said. “At what point of hundreds of millions of dollars of investment will downtown be able to hold its own? I think that’s what we should be understanding first.”
Jacobson added that most of the downtown property was not built to last 100 years and as the demolition of the Otto’s building indicated, facade improvements will not help the fact that structurally, some buildings are rotting to the ground.
Other council members spoke in support of facade improvements for buildings but against the idea of deferred maintenance.
Another problem that was considered was that any money that gets put into downtown through TIF for redevelopment will blight other parts of the city. In the current business climate, Jacobson said the only way new residential property could work would be for a developer to be willing to knock down as many units as they are wanting to put up, which would require them to make two investments in the city.
Since Chicago-based S.B. Friedman was hired by the city to determine whether the creation of a new TIF district would be feasible, discussions also focused on expectations for a new district.
Michnick asked council what projects should be prioritized in a redevelopment plan for the new TIF district: non-increment-generating projects like the city hall building or the Egyptian Theatre or increment-generating redevelopment projects.
Fifth Ward Alderwoman Kate Noreiko and Sixth Ward Alderman Mike Verbic voiced in exploring city hall options, whether it be HVAC replacement or a new facility.
Jacobson, meanwhile, said investments into non-revenue generating projects won’t fix the problem of why people don’t want to go downtown.
He added that due to the mixed opinions of council, it’s not a foregone conclusion that the council will approve a new TIF district if it meets eligibility requirements. Therefore, there needs to be much more substantive discussion on whether a new district should be created.
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