City pushes for 2 new TIF districts
The Mayor Chasity Wells-Armstrong administration is pushing to develop two new tax increment financing districts, but at a recent public hearing regarding this subject, Kankakee residents offered more questions than support.
A crowd of more than 50 attended the meeting in the city council chambers to listen and ask questions of the city’s planning office, headed by Teska Associates Inc., of Plainfield.
Basically, a TIF district is a public financing method for a designated area in which development is being sought. The creation of a TIF district allows a municipality to collect increased property taxes from that designated area and set the money aside for potential development or improvements in the area which it was collected.
A TIF district has a lifespan of 23 years.
Currently, the city has five active TIF districts, TIF 5 (Armstrong World Industries), 6 (BASF), 7 (Valspar), 8 (Exit 308) and 9 (Meadowview). The downtown TIF district expired on Dec. 31 and the money from the fund is what is being used to finance the now-underway $1.9-million downtown streetscape project.
At the meeting last week, Teska’s Mike Hoffman and Pete Iosue explained what the city is trying to accomplish by creating a 293-acre TIF district for the Kankakee Riverfront project and 545-acre East Court TIF district in and around East Court’s Interstate 57 interchange.
If all goes as hoped, Hoffman said the TIF district will be presented and approved by the Kankakee City Council this spring or early summer. The TIF would then begin collecting the increased taxes based on rising property values.
That trend is what must be changed, Hoffman said.
Property values in these two areas are dropping at substantial rates.
According to Teska research, the equalized assessed valuation for the proposed Riverfront TIF was $9.4 million. The EAV (one-third of a property’s value) for that same area in 2012 was $11.8 million, representing a 20-percent decrease of property values.
In the East Court area, the EAV was $7.8 million is 2017 as compared to $8.3 million is 2012, a drop of 6 percent.
The TIFs, he said, encourage property investment.
“The declining EAV is a trend we want to reverse,” he said.
Once the TIF districts collect some resources, typically in a few years’ time, the money can then be used for public improvements, environmental cleanup, facade upgrades and property assembling (putting properties together for a larger development project).
The Kankakee City Council controls the TIF accounts.
“This is a tool to partner with private development,” he said.
Public hearings on these two districts will be held at 5 p.m. (Riverfront) and 5:30 p.m. (East Court) on April 15, prior to the start of the council meeting. The earliest in which TIF legislation could be adopted by the council would be May 20.
There is no question significant investment is needed at East Court, a main entrance to the city. The area is plagued by boarded up and run-down properties.
Development there has been hard to attract.
The Wells-Armstrong administration is placing a significant amount of its political capital on the Riverfront project, which is a plan to develop retail and recreation along a nearly five-mile stretch of the river. If all goes as planned by the design group and the city administration, some $30-$50 million could eventually be invested over a 20- to 30-year period.
Residents questioned what impact the TIF would have on property taxes. The Teska officials said the hope is property values would rise, which means a resident’s investment was gaining, rather than losing.
Most everyone would agree, I think, that’s a good problem to have.
But what if development does not happen? Would the TIF remain?
Hoffman noted a TIF district can be abandoned after seven years due to inactivity.
“The (Riverfront) master plan is a bold vision, and a TIF is the best way to fund it,” he said. “... Clearly development has not happened.”