DeKALB – The city of DeKalb is considering a plan to place a portion of South Fourth Street within a tax increment financing district to encourage more economic development in the area, documents show.
A Tax Increment Financing District (TIF) has been proposed for South Fourth Street from Taylor Street to Interstate 88 and portions of the area between South Second Street at the railroad tracks, according to documents released ahead of Monday’s DeKalb City Council meeting. If approved by the City Council, the TIF district would be the city’s fourth.
“The City is not committing to a new TIF District, but rather, is at the study stage,” city staff wrote in a news release published on the city’s Facebook page Thursday.
Monday’s vote – set for 6 p.m. at the DeKalb Public Library, 309 Oak St. – won’t create the TIF district, however. Instead, an affirmative City Council vote would approve a $44,500 contract with St. Louis-based independent consultant PGAV Planners who would better determine the feasibility of a TIF district on South Fourth Street, according to city documents.
A TIF district is an economic tool municipalities often use to create a pool of revenue meant to, over time, be used to improve a specific area, including fix dilapidated buildings, needed infrastructure or to help aid new or growing businesses.
The proposed study area includes 342 acres and 626 lots, according to city documents. Funding for the TIF study would come out of the city’s only other existing TIF district which encompasses the downtown, documents show.
“If it were created, the funding tool would be used to spur private investment to take the place of the lost commercial activity that came with the closing of landmark restaurants, grocery and other businesses along South Fourth Street,” city staff wrote in a news release. “In the absence of such a tool, private redevelopment has failed to materialize. However, with help, new developments could tap into the market of the several thousands of construction and industrial employees working on large projects along nearby Gurler Road.”
Under the Illinois TIF Act, government entities can create a TIF district over a specified geographic area. At the time the TIF is created, the value of property in the area is established as the base amount, and taxes paid on that amount continue to go to taxing bodies as normal.
Over time, as development occurs and property values rise, the city collects the additional property tax revenue created, known as increment, which must then be invested back into the area for redevelopment. The money can go toward fixing blighted areas and paying for infrastructure, the costs of jobs related to the TIF district, surveys, environmental reviews needed for development and more.
Monday wouldn’t be the first time the DeKalb City Council has deliberated on whether to set up a TIF district on South Fourth Street. Another feasibility study was approved in 2013, according to city documents. That plan was voted down by the City Council on March 10, 2014, however. The Council at the time determined the area would not create sufficient enough property tax revenue for the development the city had in mind, documents state.
A feasibility study doesn’t mean a TIF district would happen on South Fourth Street anytime soon, however, city staff said.
The feasibility study, if approved, is expected to take between 60 to 90 days. City review would take another month, along with needed time to look at the study’s findings by the city’s Joint Review Board. The body is tasked with reviewing the city’s TIF spendings.
It could be August by the time preliminary findings are all reviewed and presented again to the Council, city staff wrote in documents.