The Examiner U-46 News Feed
Split U-46 vote supports Hanover Park TIF plan
By Seth Hancock
The Board of Education in School District U-46, at its meeting on Monday, March 12, approved a letter in support of the Village of Hanover Park extending a current Tax Increment Financing (TIF) district an additional 12 years that will be sent to the Illinois General Assembly.
According to the resolution, the final decision will be made by the General Assembly but the state requires letters of support from all taxing bodies affected by the TIF prior to approval.
The U-46 board approved the resolution by a 4-2 vote with Sue Kerr and Jeanette Ward voting no. Board member Phil Costello was not in attendance for the vote.
The resolution stated that the TIF is “set to expire in six years and will not achieve its development goals without the extension.” The TIF began in 2001 with an Equalized Assessed Value (EAV) of $8.7 million and the EAV now is $20.4 million, but it’s “currently running a deficit of $6.6 million as of the 2016 reporting period.”
“The last eight years we have had a negative EAV component,” said Rodney Craig, Hanover Park’s village president. “This year is the first time we saw even a small increment of improvement.”
Craig said there are a pair of developers interested in building single family homes and apartments near the village’s train station but they are “looking for some assurance of support from us” and “we do need time with the increment that we lost.”
Jeff King, deputy superintendent of operations, said the TIF allows the village to use borrowed money “to entice” developers and “if they don’t have enough time in the TIF, then that limits their ability to borrow far enough out to pay that back.”
Kerr said the estimated deficit is “based on projected expenses from 2017 and beyond” and asked: “You don’t get any more property tax money to cover that deficit?”
“Because of the negative EAV the last eight years, we’re just not at where we should be,” Craig said.
Ward noted the appearance of cronyism of a government body providing assurances to developers rather than the free market dictating economic activity.
“In general, I’m not supportive of TIFs,” Ward said. “I voted no on the Bartlett TIF in 2015 because I said TIFs tend to facilitate crony capitalism and I still believe that.”
Ward added: “Additionally, this particular TIF started 17 years ago with an available EAV differential of almost $12 million, and now there’s a $6 million deficit and the request is to continue the TIF for another 12 years. It could appear that we would be rewarding poor planning in this municipality to the further detriment of other taxing bodies.”
Craig later said: “I respect everybody’s thoughts and opinions on TIFs because they’re really complex, and the City of Chicago tends to screw them up for the whole state.”
The district recommended supporting this TIF extension but opposed that previous Bartlett TIF proposal and Ward asked before the meeting why it opposed Bartlett’s but is supportive of Hanover Park’s.
“The Village of Bartlett was attempting to create a new TIF in an area where one had expired in 2009 where they did not achieve their goals for development of the downtown and surrounding area,” a memo to the board stated. “Consequently, we opposed the freezing of property tax revenue for another 23 years. The Village of Hanover Park is seeking a twelve-year extension to achieve the goals for the development plan.”
The proposal was introduced to the board at the last minute as King brought it to the board as a non-agenda item a week earlier on March 5. Because of that there were few answers at the time.
Board member Veronica Noland, who wanted some figures, had asked “they want our support… but what’s in it for U-46” to which King replied: “I really wouldn’t be able to provide you with that data.”
Prior to the vote Noland’s question was answered in the memo that if Hanover Park’s projections occur “it would take 5.32 years to recoup the deferred revenue by agreeing to the extension.” The memo stated the district would receive, assuming a 2 percent yearly increase in EAV, “$11.9 million in added revenue” if the extension was not approved.
Costello asked at the time what adverse effects would occur if the projections don’t occur which the memo stated: “It would take the district longer to recoup the deferred taxes by allowing the extension. The time frame would depend on the ending value of the TIF when it expires.”
On March 12, Kerr asked some technical questions which Craig was unable to answer.
“I can’t really speak to every technical deal, every dollar transferred in and out. I wouldn’t know how to speak to that,” Craig said but added: “With a robust economy, which we’re on the cusp of what I’m being told, the EAV can then improve itself.”
In response to questions from Kerr, Traci Ellis and Melissa Owens, King said “once the TIF is created, the EAV is frozen in that TIF district” but “the taxpayers are not being punished for the establishment of the TIF.” He also said: “TIFs work in a growing economy.”
Owens said Craig’s a “supporter of U-46” and voted for the proposal.
Ward said “developers still, and businesses still, might come in or would come in to the area without the TIF, correct, and there’d still be some growth without the TIF” to which Craig said “yes and no” because the developers currently looking in the village would not build without it, but it wouldn’t preclude others from coming in.
Craig said the expansion of the Elgin-O’Hare toll road will create more interest in Hanover Park and the developers are trying to entice “many young millennials that live and work in the area,” and he added “some of the tax changes that have been made are just really going to be robust” referring to the personal and corporate tax cuts at the federal level that were signed by President Donald Trump.