Village of Sugar Grove attorneys are asking a judge to dismiss Kaneland District 302’s lawsuit to stop the 760-acre Crown Development tax increment finance district.

The school district sued the village in June, alleging that the project, called the Grove, doesn’t meet the statutory requirements of a tax increment finance district, also known as a TIF.

A TIF is a development tool local governments use to encourage development or redevelopment in blighted areas that would be too expensive to improve with private investment alone.

The project, near the intersection of Interstate 88 and Illinois Route 47, includes mixed housing and commercial development.

In a 27-page filing on Sept. 10, the village’s attorney Richard Williams wrote that at the May 22, 2024, Joint Review Board meeting, there were three votes for yes, three no and six present – including Kaneland’s representative.

“Had Plaintiff voted ‘no’ at the JRB meeting, it would have required the Village and JRB to meet and confer to resolve the objections to the proposed Grove TIF District, and would have provided an opportunity to make changes,” according to the filing.

If the board had rejected the TIF, or if the board and the village were unable to resolve their differences, it would have forced the village to have a three-fifths vote to approve the eligibility report and the Grove TIF District, Williams argued in court papers.

“It is the plaintiff’s burden to overcome, by clear and convincing evidence, the presumption that a city’s findings of blight were valid,” Williams argued in the filing.

Kaneland’s filing must plead and prove that the village’s determination was wrong and that the flooding does not exist, according court papers.

Kaneland responded in an eight-page filing that its vote of present did not constitute a waiver of its right to challenge the validity of the TIF district. The vote meant to show the School District not taking a position on the matter, according to the filing by Kaneland attorney Khriha Boucek.

Flooding was also part of the basis for SB Friedman Development Advisors to affirm the legally required conclusion that the acreage is blighted due to runoff, which contributes to downstream flooding in the Blackberry Creek Watershed. This is one of the requirements referred to as a “but for” test to allow a TIF district. That’s because without an infusion of public funds, the development would not happen.

Kaneland’s lawsuit alleged the development area is neither blighted by flooding, nor is contiguous, as both are required to meet the legal standards to create the TIF.

Williams countered, citing case law that, “It is the plaintiff’s burden to overcome, by clear and convincing evidence, the presumption that a city’s findings of blight were valid.”

“Thus, the District is required to plead specific facts to show by clear and convincing evidence that the Village’s finding of blight based on contributions to flooding within the watershed was inaccurate or, put otherwise, that the RPA does not contribute to flooding within the watershed,” according to the filing.

Boucek responded that the district met its legal burden by establishing that questions exist as to whether the subject property is blighted.

“The School District ... was required to raise questions about that presumption, which it did,” according to Boucek’s response. “Specifically, the School District pleads that the Village made undocumented and unsubstantiated conclusions about possible water damage and flooding on the Redevelopment Property Area.”

Williams also argued against the school district’s assertion that the property is not contiguous because a highway and ramp system intersect it.

State law allows a municipality to approve redevelopment plans and projects if parcels are contiguous, or if they touch or join each other. The law also allows approval if “a toll highway or connection between parcels via an overpass bridge over a toll highway shall not be considered a deterrent to the definition of contiguous territory.”

Williams also cited case law where TIF property was considered contiguous if separated by a railroad right-of-way, a toll highway or a bridge overpass.

In its initial filing, the school district also objected to the project being eligible for reimbursement of more than $109 million for expenses such as utilities and earthwork, depriving the school district of revenue from incremental property taxes within the redevelopment district for the life of the TIF, which can be 23 years.

A hearing on the motion to dismiss is scheduled for Nov. 19.