Approval of a term sheet between the Johnsburg Village Board and Hidden Harbor developer Mike Oliver does not mean that the riverside development is a sure thing.

Nor does the 4-2 vote mean the tax increment financing district Oliver is asking Johnsburg for is finalized. It does indicate the Village Board is in support of the project and will continue working toward creating a new TIF district.

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Trustees Jamie Morris and Joshua Hagen were the two dissenting votes on the term sheet that outlines the next steps for the village, Oliver and Hidden Harbor LLC.

Oliver’s asking for an agreement that would funnel 100% of the increment over the life of the TIF.

A TIF district is a tax subsidy that allows the new, higher property taxes generated by redevelopment within the district to be channeled back into the property rather than distributed to property tax-collecting bodies for 23 years. Excess money in a TIF can be used for public improvements.

At the Village Board’s April 7 meeting, Oliver said that without TIF funding, the project would not be feasible. In turn, trustees asked him to return with hard numbers on the cost of the public benefits that would be included before any vote.

“In all fairness to him, we need to give him an answer, one way or another,” Village President Ed Hetterman told the board. To the public, he added, “your property taxes are not going to go up because of this project.”

Proposed for Chapel Hill Road at the Fox River, Hidden Harbor would build motor condos, an expanded marina and drive-up boat storage. A restaurant, riverwalk and a water feature would be open to the public on the 22-acre site.

So far, Hidden Harbor LLC has gotten commitments of $13 million from investors for the $43.2 million project, according to Jim Ernst, director of business development. But not having final approval of the development does hurt their ability to find investors, he said.

“Nobody is willing to cut a check for a project the village has not yet green-lit,” Ernst said. “Without the TIF funding, this project stalls.”

He also wanted to clear up misconceptions on how a TIF district works.

“The TIF dollars are not going to impact Johnsburg citizens by the way of tax dollars. That’s a misconception,” Ernst said, adding that what Oliver and Hidden Harbor are doing “is borrowing future tax dollars from his property, his business, to reinvest in that business now.”

While property taxes on the land might be $100,000 now, after redevelopment, “it might be $1 million by then because there is a thriving business there, ... and the surrounding properties are worth more, too,” Ernst said.

Speaking to the trustees, Oliver pointed out that Johnsburg has no other waterfront access for residents, and that the old restaurant on the property is falling down.

“I have gone past this location thousands and thousands of times” as a Chain O’ Lakes boater, Oliver said, and had never stopped there. Boaters, he said, go past Johnsburg and down to McHenry to tie up their boats, get out and spend money.

“That is a huge loss in revenue that Johnsburg could cultivate and capture,” Oliver said. “We are not capturing any of the boaters. ... A harbor with 42 public accessible boats slips is a massive regional public benefit.”

With approval of the terms, the next step is for the village to prepare a TIF eligibility report, the development agreement, and hold the necessary public hearings before voting to create a TIF for Hidden Harbor.