The city of Woodstock is in the process of establishing a new tax increment financing district – and some school officials have expressed concerns about the implications of the plan.
Municipalities can establish TIF districts in blighted or underdeveloped areas to attract new economic development using financial incentives generated by the district. When a city establishes a TIF district, the property tax base in that area is frozen for a specified time, typically 23 years.
Property taxes collected on any added property value then are funneled into an account set aside for redevelopment projects in the area.
Woodstock has had a 23-year,
100-acre TIF district in place since 1997. The district will expire in 2020, and officials want to set up “downtown TIF
No. 2” that will encompass about
60 percent of the existing TIF and include an additional 500 acres of property, economic development director Garrett Anderson said.
The city wants to include the Old Courthouse, former Richards Building Supply Co. property and Woodstock Station subdivision in the district.
“Then we just draw lines between them with parcels that connect them,” Anderson said. “We are trying to do as much as possible using city parking lots, the park itself, city properties like the Opera House and City Hall to make those connections as opposed to private property. We want to minimize the amount of parcels in downtown that are in the state of being frozen in taxes.”
The city must submit required paperwork to the state of Illinois, including an eligibility report that details the problems the area faces, a redevelopment plan that lays out how the TIF district will address those problems and a housing report that identifies demographics in the area, Anderson said.
In June, the City Council agreed to pay consulting company Teska Associates $31,000 to complete those studies.
By law, Woodstock must conduct three key meetings ahead of establishing the TIF district, including a public meeting on the housing report, a second public hearing and a Joint Review Board meeting. Dates have not been set, Anderson said.
The Joint Review Board is comprised of representatives from each taxing body the TIF district will affect: McHenry County, McHenry County College, Woodstock School District 200, and a resident each from the area, city, township and fire, conservation and library districts, Anderson said.
The City Council already has had one developer come in with a proposal for apartments at the long-vacant Richards Building Supply Co. property on Judd Street.
Officials approved an agreement in June to support the project with tax increment financing funds, if and when that money becomes available.
Increased housing – which could lead to increased enrollment – is one of the reasons the school district is concerned about the creation of a new TIF district, officials said.
“Theoretically, new people could move in and put their kids through our schools without putting a dime into our school district,” District 200 board President Carl Gilmore said.
Superintendent Mike Moan said he has confidence that city staff and leaders are thoughtful about the district’s needs, the importance of successful schools and the city’s economic future, but he noted that circumstances and leadership could change several times over a 23-year period.
Woodstock officials said they would work with the school district to ensure that the TIF district does not negatively affect the district. Legally, the city must help pay for any new students brought into the district if those students live in housing that was created based on a TIF incentive, Anderson said.
“On top of that, there are ways we can help,” he said. “Clay Academy is included in the boundaries of the TIF. In the same way we can reinvest in properties such as the Courthouse and Sheriff’s Jail, we can make TIF funds available for improvements at Clay.”
Some District 200 board members, including Bruce Farris and John Parisi, said they were concerned that taxpayers outside the TIF district would end up having to pay more to make up for the “burden” of the TIF funds.
“We’re being told by existing residents that we need to do something about property taxes. As an existing resident, I agree,” Parisi said.
But the benefit of the TIF funding is to have underdeveloped properties begin to generate monies to fund necessary improvements, thus eliminating the need for increased levies to pay for items such as public infrastructure improvements in the district, Anderson said.
Although opponents worry about an increased tax burden, the opposite usually is true, Anderson said.
“The area the TIFs are usually created have high demand for city investment,” he said. “So if you create an investment vehicle like a TIF, where property taxes are specifically for [the underdeveloped area], the rest of the town doesn’t have to pay for improvements.”