Documents: Lakewood considered tax revenue sharing with sports complex

Proposed plan to build a sports complex in Lakewood.
Proposed plan to build a sports complex in Lakewood.

LAKEWOOD – The top priorities of extending utilities to Routes 47 and 176, improving the intersection and reimbursing the village for its expenses aren’t the only way Lakewood officials were considering using dollars generated by the newly created tax increment financing district.

In negotiations with the developers of a sports complex proposed for the area, village officials had discussed giving the sports complex a share of the sales tax and property taxes it generated, according to emails obtained by the Northwest Herald through a Freedom of Information Act request.

Those dollars may have gone to a backup fund to be used to cover the complex’s bond payments if it didn’t generate enough revenue to cover them on its own, the documents show.

The deal with the nonprofit Chicagoland Sportsplex never made it to the Village Board for a vote, however, because many of these terms weren’t something Village President Erin Smith or trustees were willing to move forward with.

“This is all in draft form,” Village Manager Catherine Peterson said. “We’re at an impasse. That’s why we’re not moving forward.”

Most of the concern expressed by residents centered on whether the sports complex would turn into another RedTail Golf Course, a business that the village rescued and that ended up costing taxpayers $3.6 million over two decades.

The proposed redevelopment agreement went through 21 drafts before Peterson sent a memo to the board in March saying that “it is apparent that there is not sufficient support to move forward with the proposed sports complex” and that she would be notifying the developer that they should “cease all efforts.”

The sports complex might not be dead, though.

Its executive director and chief executive officer, Lou Tenore, is pursuing new funding mechanisms, including, as of April, a state grant for nonprofits located in small towns like Lakewood.

The village has not given him any letters of recommendation or similar assistance in those efforts, Peterson said.

Tenore said he was out of town Thursday and not able to comment until next week.

The village also was notified that one of the largest barriers – who would be ultimately responsible for improving the intersection at Routes 47 and 176 if the state didn’t come through – may not be an issue for much longer.

The Illinois Department of Transportation allocated $667,000 for the second phase of engineering and design for Route 47 from Route 176 to Reed Road in Huntley, but those dollars are no longer as certain while the state’s budget fight continues.

If the village had taken ultimate responsibility for the improvements, that would have put general fund tax dollars at risk, something both Smith and Trustee J Carl Davis voiced strong objection to.

“As far as I’m concerned, I don’t want the village to have any exposure,” Trustee Gene Furey said.

His philosophy – one that has been echoed by other trustees – is that businesses succeed and fail on their own and that the bond market would decide whether the sports complex had a viable business plan.

Another concern was that the incentives being discussed for the sports complex would take up too much of the revenue that the tax increment financing district would generate, though most of the trustees and Smith said they thought revenue sharing – a common incentive that works by reimbursing a business with a portion of the tax revenue generated by that business – made sense to some extent.

“I believe there was too much ‘take’ on the developers’ side,” Trustee Kenneth Santowski said in an email just days after negotiations stopped. “I think we all, including myself, wanted this to work out with everyone; but it appears it most likely won’t.”

The board had to look at the deal as a whole, Davis said.

“You can’t look at just one item, and you can’t just say this one thing is bad without looking at it in context,” he said. “I’ve never seen a committee trying to pick wallpaper. The same thing happens with negotiation. You have to have one person doing the negotiating.”

Smith agreed, noting that while she doesn’t like the idea of a backup fund for the sports complex’s funds, it might have been palatable if the complex had agreed to take on the cost of the intersection improvements if the state didn’t come through. She doesn’t see that element coming back to the table, though, even if negotiations resume.

“At the end of the day, we’re trying to be open-minded,” she said. “If an institutional investor comes forward and it doesn’t put the village at risk, we’re willing to consider it.”

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