Land Swap is No Mystery: Here Comes TIF

Author: yinn

Oct 11

A few days ago I was having an email conversation with a friend, who asked me what I thought of the school district’s proposed land swap deal that would put developer Shodeen next to Huntley Middle School. Here is how I responded, in part:

At this point I am suspicious that a South Fourth TIF plan might still be in the works. Probably both the school district and Shodeen would love to be in a TIF.

And in today’s paper, I see this.

At Monday’s meeting, City Manager Mark Biernacki said the DeKalb City Council will be presented with a report by the end of 2012 on whether certain areas of the city should be designated as tax increment financing districts.
…

The goal of the districts is to encourage redevelopment in blighted areas, and Biernacki identified three possible district locations. Those are along South Fourth Street, past Taylor Street toward Huntley Middle School; the apartments in and around Greek Row; and parts of Sycamore Road near Hopkins Park.

So there it is, folks. Your fair city and your even fairer school district have this new TIF thing worked out already.

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Filed under: Council/City Watch, Dist 428, TIF | Tagged as:

Licensing & Inspection Program Could Help Turn a TIF Blueprint into Reality

Author: yinn

Sep 18

The Daily Chronicle lays out today the arguments for and against licensing and inspection of rental properties.

There are four proposed laws before the council, but it’s the issue of licensing that has garnered the most attention and debate from aldermen, city officials, and landlords. City Manager Mark Biernacki has previously described it as being the linchpin of all the city’s efforts to improve the quality of its housing stock.
…

[Local realtor and landlord Dan] McClure said he believes a licensing program could be abused by the government in the future. Although he does not mind firefighters coming through his various properties to inspect them, McClure disagrees with the notion that expanding inspections would help.

“It just seems like a tremendous invasion of privacy of the tenant to me,” McClure said. “I don’t understand why they want to get involved with this.”

Good point, Mr. McClure. However, no interviews of tenants appeared in the article, so we’ll never know what they think.

But let’s move on to asking why city staff want licensing and inspection so badly that they’ve hired people to manage a licensing programs that didn’t exist and to do an end run around its own Housing Task Force.

You could argue that the main motivator is concern for tenants of very modest means and few options, but then I’d have to ask why none (save for a few students) were included as members of the Safe/Quality Housing Task Force.

You might also suspect that the plan represents a new revenue stream, and you probably wouldn’t be wrong- wrong.

But here’s an alternative theory: that the main point of pushing licensing and inspection so hard for so long is because a grand plan is involved, and that plan is the 2008 Amendment to the Central Redevelopment Area Tax Increment Financing (TIF) District. Read the rest of this entry

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DeKalb’s TIF District 2

Author: yinn

Jul 24

Tax Increment Financing (TIF) District 2 is described in city budget narratives as running south of the downtown but north of Taylor Street.

Annual TIF 2 expenditures generally include:

  • $250-300,000 in economic incentives to Target

  • rehab, repairs and/or improvements to Barb City Manor and the Municipal Building

  • about $150,000 in transfers to the General Fund

This year, improvements at Founders Elementary (which lies south of Taylor) are planned as well.

ASSS*, from the middle column in the table below, stands for the expenses that reliably reflect area-wide improvements: alley, sidewalk, stormwater and street.

Once you wrap your mind around how few dollars, relatively speaking, go to helping the district at large, get a load of the ballooning fund balance.

TIF 2
Budgets

Fiscal
Year
Property
Tax
Increment(s)		ASSS*
Expenses		Total
Expenses		Ending
Fund
Balance
2006635,277262,811397,934-918,116
2007772,579222,730313,199-458,734
2008977,210123,110284,548233,929
20091,499,602+
362,072**		313,391875,5201,220,083
20102,073,699192,837936,6852,357,098
20112,090,46013,490315,5424,132,015
20121,920,32097,955611,1795,441,156
20131,828,815315,0001,302,3945,967,577

Nice little pile o’ slush they’ve got there. Read the rest of this entry

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Filed under: Council/City Watch, Payment Due?, TIF | Tagged as: ,

A Look at the Central Area TIF Funds

Author: yinn

Jul 20

Yesterday there was a lot of news coverage about Chicago’s forecast inability to finish its planned Tax Increment Financing (TIF) projects now that property tax revenues are down.

Coincidentally, I’ve been peering at DeKalb TIF funds recently, looking for the same kind of trouble.

Fund 63 is the DeKalb TIF fund that pays for development and development services in the Central Area AKA Downtown TIF or TIF 1. Fund 225 is the fund for TIF debt service. We’ll look at both of them today. Read the rest of this entry

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The FY2011 Central Area TIF Report

Author: yinn

Apr 13

…can be found here (It’s a 64-page PDF so give it a minute to load).

As an incorrigible repeat offender I could not stop myself from submitting a Freedom of Information Act (FOIA) request to obtain the following information:

1. The breakdown of the transfers so we can tell how much is going to the General Fund and how much is going to Debt Service. As you can see below, they used to break it down:

Fiscal
Year		Transfer
to General Fund
(9001)		Transfer
to Debt Service
(9225)		Other Transfers
(9006, 9036)		Total
Transfers
2008350,0001,725,831N/A2,075,831
2009527,4912,078,532362,0722,968,095
2010852,4848,172,302N/A9,024,786
2011???3,673,448

I tried to look it up using the city budgets, but the numbers there do not add up to the sum stated in the TIF report. It might be important. Especially nowadays with EAV falling and with half of the property and sales tax increments being paid out to all the overlapping local governments as surplus, we need to keep an eye that the city can still cover its debt service payments as well. Combining the transfers as they did for FY2011, so that you can no longer tell where they went at a glance, is a step backward in transparency anyhow.

2. The reason why Joint Review Board annual meeting minutes are not routinely submitted.

3. The reason why DeKalb’s CEO doesn’t do the required CEO compliance certification.

Bonus table: Central Area TIF state and local sales tax increments:

Fiscal YearState Sales Tax IncrementLocal Sales Tax Increment
2006735,942593,306
2007835,524670,764
2008827,732748,827
2009850,855794,955
2010760,785716,802
2011841,716558,986

The sales tax increments pretty much mirror what has happened in DeKalb overall: taxable sales plunged by tens of millions in 2008-9 and have not yet climbed back to pre-crisis levels.

Sales and use taxes also make up 40% of the revenues in DeKalb’s General Fund budget. DeKalb is hoping to collect $12 million in sales and use taxes during the current fiscal year, 2012, which ends June 30.

Additional sources: City of DeKalb’s FY2012 Adopted Budget (PDF pp. 120-124) and FY2011 Comprehensive Annual Financial Report (PDF pp. 211-214).

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Village of Alorton, a Federal Investigation…and TIF

Author: yinn

Feb 15

Alorton is an Illinois village near East St. Louis of about 3,000 people, a median household income that is roughly the same as DeKalb’s per capita income and a median home value of $47,000. Its government is being investigated by the feds for “systemic corruption.”

Some village officials have been indicted. The mayor hasn’t been charged with anything, though his home was raided last month:

McCallum said [after the raid in January] federal agents told him they were looking for documents related to tax increment financing.

Agents took boxes and several safes from the McCallum home and the Village Hall. The agents searched outside the home where a boat was parked under a carport, inside a garage where a silver Hummer was parked, and inside a white truck that was parked on the lot and all around the house.

The publication hasn’t shared what McCallum’s day job is. He resigned from office Monday over being too busy to do the mayor’s job anymore.

By the way, Mayor McCallum tendered his resignation publicly, to the Alorton Village Board. That’s more consideration than what we’ve been getting lately. Read the rest of this entry

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Filed under: State Watch, TIF | Tagged as:

ShoDeen Doing Things in Wrong Order

Author: yinn

Dec 2

Before ShoDeen is given a nod for housing and commercial development on DeKalb’s northwest side, the company should tear down the homes it bought downtown and boarded up as (IMO) any local developer would have been made to do long ago.

(Or were the comments about using the homes to prove “blight” for the formation of a special ShoDeen TIF district not so much a joke after all?)

DeKalb City Council, I urge you to use the leverage presented to you to git ‘er done.

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Find Illinois TIF Annual Reports Online

Author: yinn

Nov 21

The State of Illinois Comptroller’s Office has begun posting annual Tax Increment Financing (TIF) reports from FY2010 on. Go here and click on “View Submitted TIF Reports.”

You’ll find the City of DeKalb’s FY2010 report there so far. FY2011 should be along soon.

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Filed under: Council/City Watch, State Watch, TIF | Tagged as:

Look What They Did with an Old KFC Building (with Bonus TIF Fun Fact & Gratuitous, Silly Poll)

Author: yinn

Nov 13

Abandoned about nine years, an old KFC restaurant in Loves Park reopened this month as “Coco Joe’s.”

Before that, the owner converted an old DQ building into the first Joe’s.

Perhaps we could entice these folks into taking a peek at our own abandoned KFC on South Fourth. The Loves Park location includes a fenced outdoor eating area, which they appear to have managed with nary a Tax Increment Financing Fund handout. South Fourth has not yet been sucked into the TIF vortex.

Bonus TIF Fun Fact: Read the rest of this entry

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Another Way to Abuse TIF

Author: yinn

Oct 7

Greg Hinz of Crains/Chicago Business.com has summarized the Chicago Inspector General’s investigation into a Daley administration practice requiring TIF recipients to donate some of the money to specific not-for-profits, most often one run by Mrs. Daley called After School Matters.

Of the 27 grant agreements signed between 1985 and 2009 that directed cash contributions to private non-profits, at least 16, or 59%, specifically designated After School Matters or an affiliate.

Altogether, After School Matters received $915,000 through such “public benefits” clauses, according to the report. This is on top of more than $54.5 million in direct city grants since 2004.
[...]
The figures as to how many TIF deals, technically known as redevelopment agreements, required payments to After School Matters is only a “best estimate” from the city’s law department, the report says.

Detailed data were not kept by the city, nor were any rules or standards established as to which groups should get the money, the report says.

The Inspector General’s report.

[Added 10/8] Mick Dumke of Chicago Reader has a take on Mayor Emanuel’s non-response to the report. The reformer’s mantle seems to be developing a big hole.

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