The McHenry City Council agreed to temporarily reduce its impact fees Monday in an effort to spur development.
Developers for the Oaks of Irish Prairie and Legend Lakes subdivisions each have approached the city about the potential reduction. D.R. Horton wants to build homes on 86 empty lots in Oaks of Irish Prairie, and another developer wants to build 82 homes in vacant space in Legend Lakes.
The City Council in a separate consideration solidified a specific deal with D.R. Horton, but now other developers will have a shot to build with less fees.
Impact fees aim to offset any burden that an increased population will have on taxing bodies such as the police and fire departments, libraries and school districts.
Governmental entities in the area could end up with more money in the long term if all the developments go up and begin to generate property tax revenue, McHenry City Administrator Derik Morefield said in a note to the City Council.
The Oaks of Irish Prairie deal would result in a waiver of a little more than $1 million for D.R. Horton, but property taxes on the
86 proposed homes are expected to reach $5.6 million dollars over
10 years, according to city documents.
The calculation is based on current tax rates, according to city documents.
The city would receive additional revenue in water and sewer fees.
For the Legend Lakes subdivision, the developer could avoid paying nearly $715,000 in impact fees for the 82-home project. The homes are expected to generate $5.4 million in property taxes in that 10-year time period.
A handful of neighbors in the Oaks of Irish Prairie subdivision spoke in support of the plan at Monday’s meeting and said their underdeveloped subdivision attracted criminal activity and resulted in lowered property values.
Patriot Estates, Liberty Trails and Lincoln Hills subdivisions also have empty lots and would be eligible to build with reduced fees under the new deal, according to city documents.
The reductions only have been approved for the next year. Second Ward Alderman Andrew Glab was the sole no vote. D.R. Horton officials said they would expect to see 10 housing starts to begin before the end of the year.