TIF Notes

Check this out (p. 98). The Joint Review Board recommended that the City of DeKalb approve the TIF redistricting plan subject to termination of the County Home redevelopment project area portion. A city manager’s memo summarizes the goings-on (p. 96).

[T]he School District advised that they had a concern about the affect the addition of the 5th Ward North area would have on the EAV as it related to commitments made by the School District during the referendum process. The School District estimated the addition would capture approximately $25,000 annually in property tax growth to the District. In response to the concern, at the third and final meeting of the JRB, the City Manager offered to commit to the termination of the DeKalb County Nursing Home TIF Redevelopment Project Area upon final payment of outstanding obligations associated with said Project Area, which is scheduled to occur in July 2009. Closing out the DeKalb County Nursing Home TIF District would result in approximately $180,000 in annual property taxes back to the School District, as well as increased shares of property taxes to the remaining taxing districts based on the area’s current EAV. The 12 year Central Area TIF extension received a unanimous positive recommendation by JRB members present. Further, the exchange of the addition of the 5th Ward North area for the termination of the DeKalb County Nursing Home TIF Redevelopment Project Area in 2009 received a positive recommendation on a voice vote of 6-1, with the School District voting against.

Besides the mystery of the school district’s nay vote, how does the city plan to make up the net loss?

24 thoughts on “TIF Notes”

  1. What I would like to find out is why another downtown TIF extension was necessary. Surely in more than 20 years of competent redevelopment efforts, our downtown should have been in pristine shape, yet it is still blighted? Why? I suspect that the TIF monies from the downtown were ported over to the TIFs on Sycamore Road. This transfer may be legal, but it surely violates the spirit of the TIF ACT. There have been some facade improvements, and some landscaping work done. But there is no good reason for the downtown to still be dilapidated and blighted after this many years. My suspicions are that the plan was to mine out the downtown TIF, and then bulldoze the entire area during the final extension so that it could be redeveloped along the lines of all new buildings in the new-urbanism mode. Now, that would be Progress, our downtown would look just like any other yuppie suburb. Yeccch!

  2. The way they explained it is that the first “phase” they put the downtown money into improvements we can’t see (sewer? drainage? can’t remember) while the next phase will be stuff we can see.

  3. I was always the belief that TIF monies were to be used primarily to stimulate more business. That these monies were supposed to be used by companies/stores that themselves generated sales tax. I didn’t think the original intention was that these monies be used like they did for the Nehring Building (Park District and Chamber offices).

    If it can be used for infrastructure repairs and the downtown revitalization process of buildings, parks, and parking areas, why not a police station?

  4. Ivan, the reason they cannot use the TIF money for a police station is that a TIF is intended to rehab blighted and dilapidated areas and in the process pay off the borrowed expenses with the increased property tax revenues from the rising EAV. It is common practice to let out TIF bonds with the expected increment as the collateral for the bonds. A police station is not taxable and will not increase the EAV of the TIF district. After more than 20 years, we now are starting to work on a downtown that has been falling down for years. When I came out here in 1973 to go to Northern, I did most of my Christmas shopping by walking down Lincoln Highway in the downtown. I have not been able to do that again for many years. My point is that it should not take more than 20 years to fix a blighted and dilapidated downtown TIF district. Instead, it has noticeably deteriorated. I have had students who lived there in the apartments, and from what they said, code inspection has been rather lax. Now, suddenly, we are supposed to have inspections, all over the city. If they had been doing their jobs for years, this would not be a problem now. I wonder where all the money, that should have been used for structural repairs and other covered improvements in the downtown went instead over the years? The senior administrative staff serves at the pleasure of the mayor and council. With all the problems facing us right now, and the manipulation and lack of candor exhibited by senior administrators, one would hope that our so-called representatives might be getting at least a slight bit displeased.

  5. Steve, I think the city thinks of it has the program that keeps giving. That’s a problem DeKalb has in it does not set real goals to do things. Sycamore just went at it and got it done. Planned for later dates to do the side streets and look at what they’ve done.

    DeKalb is very big in paying for studies and wishing things done. Maybe DeKalb should borrow a few trademarked cliches such as “Git er done!” or “Just do it!” Downtown has been such a black hole for money the past 20 years and to top it off, the main problem is that you have many “absentee landlords” who just let their buildings slum it. I wish the city ordinances would have been enforced a bit better to make the downtown a better looking district via the landlords pocket and not rely on TIF.

    As for a return on the investment. I still think that the park district should not have received a dollar to rehab the old Nehring Building. You know, people always seem to forget how much money the park district has to spend. Just as still stupid ice rink idea that is in the city’s budget. It should be a park district venture.

    As for money and where it has gone. I believe much of it went into a lot that wasn’t really noticeable but no matter where it went, it really hasn’t done much for the downtown.

  6. Steve Berg wrote
    “But there is no good reason for the downtown to still be dilapidated and blighted after this many years. My suspicions are that the plan was to mine out the downtown TIF, and then bulldoze the entire area during the final extension so that it could be redeveloped along the lines of all new buildings in the new-urbanism mode.”

    Of course that is one long term piece to their puzzle.But the truth of the matter is that THEY-the city, and “downtown revitalization groups” benefit more from the image of a depressed downtown then they do from a prosperous one.The constant cry of a dilapidated downtown and we need to fix it up ($$ in their pockets), we need to bring in NEW businesses, we need to run off the college bars, we need to get it all sparkely clean is 100% bull.
    Re.New is downtowns worse enemy, worse then WalMart ever was or will be.The constant negative imaging the downtown NEIGHBORHOOD gets from them is killing more traffic then creating.There is less downtown foot traffic then just a few short years ago-when ReNew was created.The paintings dont do squat,tuckpointing dont do squat either.The #1 way to get downtown “cleaned up” is to create traffic, that will create competition for space which result in higher rents , which will also will result in landlords having to step up their game.Buildings get fixed up when the $$ and competition is there.ReHabbing buildings and charging $3000 rents has to follow the foot traffic not the other way around.
    of course, when it comes down to it, none of it has anything to dow ith downtown business, its simply a shell game to secure a few people some paychecks.Lets see how we can validate our grants and paychecks from the taxpayers-find a problem and make it seem much worse then it really is.

  7. “the main problem is that you have many “absentee landlords” who just let their buildings slum it. ”

    I can name nearly every building owner in the core 1st-4th st’s area and I can say that for the most part this patently false.the truth of the matter is at this time there is no market for the buildings to be renovated.When the foot traffic “appears” then it will be time to rehab and create $3000 per month storefronts and $1200 apartments.Till then its an $800 per month commercial district.

  8. I am not sure I am following the discussion here. Lets face it, the shopping centers had a part in the decline of foot traffic downtown but just as devastating was the loss of the second and third floor tenants downtown. When downtown was thriving the second and third floors of all these building were occupied by dentists, lawyers, accountants, opticians and all sorts of other professional people. Just as the department stores moved from downtown so did the second and third floor tenanats that brought allot of traffic to the downtown.

    It was not until the exodus of these professions from the upper floors that the properties were converted to apartments.

    As far as spending TIF money downtown what are we trying to accomplished. Re-establishing second floor professional businees or helping the building owners remodel their apartments. Personnally I do not feel that TIF should be used for any apartment type remodeling but rather the developement of business and professioanl traffic to the area.
    It appears what we are striving for are apartment owners who also have store fronts instead of downtown business owners that offer storefronts and professioanl offices.

    Realistcally I do not think either program will do any good. It will be up to the market to sort this out. You can put perfume and lipstick on a pig but in the end it is still a pig.


  9. This is the first I’ve heard of the 2nd- and 3rd-floor professional offices. Must have been before my time. OTOH I’ve met plenty of people who have rented apartments on those floors. I wonder about where those affordable rents will go. It’s one thing to create an attractive space but quite another to “gentrify” your own people right out of town.

  10. Are you saying I am “old”. Historically almost every downtown had second and third floor professional offices. There is one theory that the big box stores destroyed “downtowns”. There is another that the exodus of these tenants was just as harmful. I tend to agree with the second and I see little chance of these upper floors retuning to the professional offices of old. To me this is the biggest challenge of increasing the foot traffic downtown to what it used to be. People had to come downtown to see their lawyer, accountant, Optician dentist ect. and while there they did their shopping.

    yinn: just this old person’s point of view Ha Ha. Next time I will start ” Once upon a time…”


  11. My optometrist used to be on the second floor of a building that is now apartments. I think the problem there is with ADA, the medical people need to be in locations where they are accessible. An apartment can be put on the second floor of a building but it is harder for a professional person to be there in a building with no elevator.

    So, either elevators need to go in the buildings or the upper floors need to stay as apartments. There should be other sources of funding to get buildings up to ADA compliance besides what is getting done in DeKalb now.

    Yes, Chadwick is right about the downtown looking better. Actually, I think it looks better now than it has in almost 20 years (except for the missing Old Post Office). It looks better now than long before the big box stores came in along Sycamore Road.

  12. There are 2 buildings between 3rd and 4th street worth keeping. The Munson Insurance Building and the Brown Law office.

    A bit of humor
    Match the downtown revitalization project with the city

    The Mark Peoria
    Hollywood Casino Rockford
    Metro Center

  13. OOPS

    Match the Town to the renew project

    The Mark Peoria
    Hollywood Casino Rockford
    Skating Rink Moline
    Metro Center DeKalb
    Bradley Center Aurora


  14. Holy Cow, Pevo! Don’t give those people any more ideas! We already have the Convo Center (which looks like a giant petroleum storage tank). The last thing we need is another big thing like that in town!!!

    There might be a casino going in Shabbona sometime, although who knows if that will ever happen.

    If there is a casino for DeKalb, park it right next door to a new police station, and make casino money pay for it.

  15. P.S. I know Pevo’s quiz game was meant to be a joke, but there are so many stupid ideas floating around that it is hard to tell what is a joke and what is a legitimate idea (although I think in most cases they are one in the same).

  16. You may be on to something.

    Do you think there is any chance we could convince “Dub Yah” that it really is a petroleum storage tank.

    We could then apply for Homeland Security Funds to protect “the tank” and build a new police station with those funds

    Keep those ideas flowing. ” Your doing a heckava job Brownie”


  17. I was listening to a radio interview last week with someone from renew Dekalb who stated something to the effect “we are working hard to remodel the upper floors of the downtown and have other projects in the works in the area in order to increase the City’s residential tax base”. I could not believe that I heard someone who is in somewhat of an authoritative position make such a statement.

    As far as I know every study and recommendation over the past several years is the the City must strive to increase it’s industrial and commercial tax base. Whe did we change directions to increase the residential tax base?

    If that is really the plan then we are really going to be in trouble if not already there.

    It appears that those guiding DeKalb may be following the ” horns of Lorelei”

    Look that one up my fellow scholars..


  18. Ed, any Homeland Security funds to protect the Petroleum Storage Tank, A.K.A. NIU’s Convo Center, would go to Grady at NIU. By fall, that guy’s army of arrest nothings will outnumber the real police under Fiethen by 30%.

    Nice try, though.

  19. TIF is not a tax, TIF in some people’s minds seems to be a miracle of money that just happens to be in a set aside fund (Mayor Van Buer’s thinking). Excuse me Mr. Mayor but where the heck do you think that money came from in the first place, a pirates hidden treasure box?

    This is the stupid kind of thinking that has gotten this community into financial trouble. Our city council THINKS we have a balanced budget but if you and I used this math when we were in school, we would have all received “F’s”. Our budget for 2009 is not balanced and we will see this next year at this time. I am going on record right here first and saying this.

    When your city council and mayor can honestly vote approval for this budget and allow $75,000.00 to be spent for an ice skating rink for the downtown to pick up a little extra business and just because it is coming from TIF monies and not tax dollars (Once again, Mayor Van Buer not Ivan Krpan saying this) you just got to know we are headed for trouble.

    There is no respect for the taxpayer dollar at city hall and this budget vote shows all of us this.

    How does a skating rink draw more business for downtown? Does it end up being a baby sitter while parents shop or dine? How many times have you spent outside in the cold for several hours and then immediately went shopping afterwards?

    Who’s paying for the staff to man the ice rink? Maintain the ice rink? Shovel and scrape the ice off after every snow storm? Will the ice skating rink be cleaned before the roads are? How will they do this without hiring additional employees? How will they do this without creating more overtime?

    Why are simple questions like this not considered before a vote? My last question is simple, Why TIF monies and not Park District dollars, this is what the Park District is for, right?

    I can see the grand opening now. “Welcome to the opening of the Frank Van Buer ice skating rink, brought to you with TIF dollars and no tax dollars used”.

  20. Ivan, somebody told me yesterday that TIF is free money from Mars, dontcha know. But pirate money is just as exciting.

    This should be coming up for a vote soon, and I’ll tell you what: If there is another “glitch” with the agenda being uploaded to the city website on time, I am going to develop a habit of going up to city hall myself to get the dead tree versions because, if the Chronicle scoops me, what other reason would I have to go on? [brings forearm to forehead; sighs.] ;>)

  21. There would be fewer computer problems if someone took those city agendas and divided them up into two parts. The time spent dividing up double-digit megabyte files into two sections would equal the time spent waiting for them to upload.

    I think Ivan hit on the right question for the ice rink:

    If the ice rink money came out of the regular fund, would anyone vote for it? If the answer is “no,” then the ice rink should not happen.

    TIF money comes from the SAME SOURCE, taxpayers. The only real differences are that TIF money comes from a specific area and projects are supposed to be linked to economic development in that area. Sure, people can claim it is a lot more complicated than that but the idea that TIF is some treasure box needs to go. Projects that happen “but for” TIF need to go, too. Projects that are worthy enough to come out of the regular funds are what should happen. If a project is not worthy enough to come out of any fund ‘but for’ TIF, then the project is not worthy of any tax dollars.

    I seriously believe we do not have a budget problem ‘but for’ TIF. As soon as the city bought that First and Locust property, we had a budget problem. Anyone is welcome to tell me I am wrong, but whomever must provide evidence.

    The idea for an ice rink is not a bad one because it would give kids something to do. The Park District does an excellent job with its facilities and everyone I ever dealt with there is nice. If the Park District would like the ice rink project and some admission money and advertising money gets charged to help get it to pay for itself, that would be fine with me.

    I wonder who came up with the idea first, the downtown merchants, ReNew, or the city. The foot traffic downtown would increase but I cannot wait until someone figures out that having an ice rink will equal a bunch of people going to merchants and restaurants just to use the bathroom, without buying anything. Downtown merchants are just going to love being the new ‘babysitter’ of kids dropped off by parents asking them to use the bathroom.

  22. Kay My evidence is as follows: From page 17 of this years budget. It is clear there has been a real budget problem looming since 2006 but nothing was done to correct the direction we were headed in. Now BANG!!!
    Hope you find this evidence satisfactory and it comes from there own budget footnotes!!!!


    The City Council still has an adopted budgetary goal established in FY2006 to
    transfer into the City’s General Capital Fund (Fund 32) 2 percent of all home rule
    sales taxes received and additional 2 percent each succeeding year for 5 years
    for a total of 10 percent to complete various capital improvements around DeKalb
    (but outside its existing TIF Districts) and/or assist with vehicle and equipment
    purchases. Because of the financial condition of the General Fund, this transfer did
    not take place in FY2007 and FY2008. This policy and the City’s other budget
    policies must be revisited over the next few months.


  23. I had a good friend the other day ask me a question, more of a statement actually, that he really questioned whether the city could actually use TIF funds for the skating rink in the first place. His wisdom being that the proposed ice skating rink is “portable”. This means that the ice skating rink would be able to be moved around and eventually could find itself out of the actual TIF district. This would not be permittable. According to him, the TIF dollars have to be physically spent in that district and for improvement of that district. He doesn’t see how a “portable” ice skating rink meets those requirements. I agree.

  24. Thanks Pevo!

    I interpret that as someone (if not a lot of people) KNEW there were budget problems yet allowed TIF to go through, and advocated for TIF projects.

    So, what should that be called?

    A.) Incompetence
    B.) Misrepresentation
    C.) Major Boo Boo
    D.) Misuse of Funds
    E.) Stupidity
    F.) A Sweet Deal for Businesses, A Raw Deal for Taxpayers
    F.) All of the Above
    G.) None of the Above
    H.) ___________ ?????

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