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DeKalb City Council approves TIF fund distributions despite opposition

DeKALB – Despite opposition from other taxing bodies, the DeKalb City Council approved funding three out of four projects with tax increment financing money from an expiring TIF 2.

“As I say my prayers tonight, I hope and pray that what this council does tonight will not fly in the face of further progress,” DeKalb Mayor Jerry Smith said during Tuesday night’s council meeting, in response to 5th Ward Alderman Kate Noreiko speculating that taxing bodies will be “pretty skeptical” about working together in the future.

The money not designated for projects will be surplused out to the other taxing districts at the close of TIF 2 on Dec. 31.

During the final meeting of 2018, the council approved preliminary development incentive agreements for the Egyptian Theatre at 135 N. Second St. with a $2.5 million TIF surplus incentive. They were approved unanimously.

The proposed boutique hotel at 145 Fisk Ave. (a 5-2 vote, with Noreiko and 4th Ward Alderman Patrick Fagan voting no) also is set to receive $2.5 million. And the continued development of the Hometown Sports Bar and Grill project at 241-249 E. Lincoln Highway, also approved unanimously, is set to receive $150,000.

“This decision has the potential to be one of the most transformational moments for downtown DeKalb,” said Alex Nerad, executive director for the Egyptian Theatre.

The council deliberated at length over whether to approve the projects, after Monday’s TIF meeting – moderated by DeKalb County State’s Attorney Rick Amato, who for weeks, along with other taxing bodies, has expressed sharp concern over the city’s handling of TIF funds in the past. Amato also called for a forensic audit, which the council planned for proactively Tuesday.

The council approved an amount of $100,000 to be taken out of TIF 1 and TIF 2 each, to fund their respective audits. The council also passed a fiscal 2019 budget, which was amended after the TIF money designation votes.

“This isn’t intended to be an affront to the taxing bodies,” 1st Ward Alderman David Jacobsen said.

Jacobsen said that the approval of the fund delegations as preliminary development incentive agreements could be discussed further at the Jan. 14 council meeting, but also said that they needed to be earmarked before the Dec. 31 expiration of TIF 2.

“Compromise, controversy, crossroads – it’s obvious that this council does not buy into what I thought we had coming out of that meeting yesterday,” Smith said.

Smith voted in favor of all three projects, and voted against the proposed installation of fiber optics and security cameras in the Central Business District – a fourth project that was denied unanimously by the council.

“We talk up here all the time about economic development, and now we have an opportunity,” 6th Ward Alderman Mike Verbic said. “I understand the situation of questions of how past TIF monies were used, but there has been an opportunity over the life of the TIF to review those numbers.”

The projects’ funding was approved despite Smith’s indication Monday that he would push for only the Egyptian Theatre and the Hometown project.

“It doesn’t seem reasonable to now say, ‘Well, we said we’d work with [the taxing bodies], but we don’t like this piece.’ At some point, everybody has to give something,” Noreiko said, adding that she felt the council was “backing away” from its intent to compromise.

The council also officially appointed Bill Nicklas as city manager, set to begin Jan. 1. Jacobsen was the only “no” vote.

“I think while [Nicklas] would make a great interim. Understanding that he is near the end of his career, [and] DeKalb has a multitude of issues, I think it could be better solved by someone younger coming in,” Jacobsen said after the meeting.

“With [Nicklas] coming in,
I think he’s going to lead us in the right direction, and he works so well with the other taxing bodies and elected officials,” Fagan said.

Nicklas did not speak during the meeting.

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