Geneva officials hear testimony at TIF hearing; action expected next month

If the Geneva City Council approves the creation of a fourth tax increment finance district – TIF 4 – it will represent the successful culmination of more than 14 years of effort to bring industrial development to diversify the city’s tax base, Economic Development Director Cathleen Tymoszenko said.

The proposal is to create a fourth tax increment finance district encompassing 297 acres on the city’s southeast side. A tax increment finance district is a development tool local governments use to encourage development or redevelopment in blighted areas that would be too expensive to improve with private dollars alone.

A public hearing was part of the legal process toward creating a TIF district.

“We have one chance to move forward with this project,” Tymoszenko said at a 90-minute public hearing June 3 on the TIF. “You have a very strong market. You have a private sector partner who’s ready to go. ... We have one chance. And I don’t know if that’s going to come about again. But what I do think is if the TIF is not approved, this will not be developed in Geneva. ... It’s likely to be built under someone else’s flag.”

Tymoszenko urged the City Council to approve creating the TIF district to facilitate development according to its Southeast Master Plan covering the acres bounded by Fabyan Parkway, the DuPage/Kane County border and Kirk Road.

The council is scheduled to take action on the TIF at the July 8 meeting.

Tymoszenko also spoke to misconceptions and misunderstandings about TIFs.

For one, $185 million is the upper expenditure limit during the 23-year life of the TIF, she said. The money would come from future property taxes as a result of development and not from a bond issue.

“The city is not proposing a $185 million bond,” Tymoszenko said. “That number is in the TIF plan because by law, the city must identify total expenditures the redevelopment project could incur.”

A TIF does not cause taxes to be raised, it does not misallocate funds and taxpayers do not contribute to the TIF fund, she said.

TIF dollars are only spent when the development is achieved, she said.

The city is contributing to the development with $26 million in general obligation electric bonds to build a substation to support the area with power. It also received nearly $1.3 million in a Rebuild Illinois grant toward the new electric substation.

“This is because the state of Illinois recognizes our efforts to bring forward industrial development to the region,” Tymoszenko said. “The city thought that we would advance the funds, get this infrastructure in place, development would come. It would pay back the city over time through the increment generation.”

The city also prepared itself for development by enacting boundary agreements with Batavia and West Chicago, Tymoszenko said.

MIF, renamed MWI Property Group, bought 211.43 acres as an industrial site and seeks to annex, bridging the gap to create a public-private partnership.

Caitlin Johnson, vice president of SB Friedman, which prepared the redevelopment project for the city, said the taxing bodies within a TIF district get the same revenue. The base value is frozen while the development and improvements are ongoing.

The analysis showed a lack of growth from private investment, as well as blighted conditions of structures on the site and flooding, among the conditions required in order to create a TIF district.

June Maher of Geneva Township disputed that the analysis states the land is vacant. Maher said it has been used for commercial agricultural purposes within the past five years before designating it a TIF district.

“Staff does not deny that this property was farmed, nor do they present any evidence that it was not farmed,” Maher said. “Neither does SB [Friedman].”

What was grown was grass hay that was harvested, baled and sold as food for livestock, thereby making it agriculture, not vacant, Maher said.

Her husband, Brian Maher, said the right developer could come in and not need a TIF to succeed.

“How were developments realized prior to 1977 when TIFs originated,” Brian Maher said, referring to the enactment of state law to permit TIF districts.

He also cited the new Venture Park development of a mega-warehouse that is not included in a TIF but would be entirely privately funded.

“But they’re willing to build,” he said.

David Henny, representing Kirk 38, LLC, which owns 3.5 acres at the southeast corner of Kirk Road and Route 38, said that company has not been able to build because the area requires utility and roadway improvements.

“I’d like to believe that we are a good example of the ‘but for’ test,” Henny said, referring to the TIF requirement of but for the support, it would not be built. “Over the course of the last 17 or so years, we haven’t found a path forward without city assistance ... to deal with these issues.”

Henny said the company is not driving the TIF, but would be hopeful to participate once it’s approved.