Comments raised by several residents during Tuesday’s public hearing about the Northeast Airport Tax Increment Finance District No. 2 called into question the merits of the village of Sugar Grove’s effort.
A TIF District is an economic development tool afforded to municipalities to promote activity in targeted areas.
Members of the village board are in the process of gauging if they should amend the boundaries of the TIF District to include additional properties located along U.S. Route 30 and Illinois Route 47.
Officials would like to use the funds generated by freezing the property tax base bound by TIF District No. 2 to promote redevelopment. This could include, among other things, efforts to extend fiber optics and sanitary sewer lines.
“As a president of my homeowner’s association, I’ve gotten individuals asking me about the TIF,” Sugar Grove resident Stephen Hal said. “Our lands are included in the TIF. By virtue, that’s the reason I am here.”
Hal said residents of his neighborhood have expressed concern for the TIF District and how funds generated by the economic development tool will be used.
Typically, the monies generated by a TIF District must be spent from within the economic development tool’s project area.
Officials have said an amendment is needed to allow funds to flow more seamlessly between the village’s two TIF Districts.
TIF District No. 2, established in 2015, has a 23-year life and is set to expire in 2038. Currently, it generates about $50,000 per year, but it currently has a negative fund balance.
The village’s other TIF District, Industrial Tax Increment Finance District No. 1, creates about $200,000 annually and is set to expire in 2035.
Not every neighboring taxing district is impacted the same by the proposed amendment.
Sugar Grove Fire Protection District Chief Bill Perkins said it’s difficult knowing that the fire protection district loses property tax dollars because of the TIF District.
“It’s just hard when one entity can dictate where the tax dollars for another entity goes,” he said.
Perkins said he acknowledges that the village has communicated to the district how TIF funds could be used to pay for special equipment should it be needed.
Still, he said there’s reason to have concern.
“As we all know, it doesn’t matter how much equipment you have if you don’t have the personnel to staff it,” Perkins said. “Staffing is not a qualified TIF expense.”
Sugar Grove resident Chris Foster said she questions where to draw the line with TIF Districts.
“As we listen to the impact that this is having, it’s actually generating another loss or another cost,” she said. “I’m curious how do we make up for what the fire protection district is not receiving by using this strategy.”
Village President Sean Michels explained that the TIF district is meant to benefit all neighboring taxing districts by way of promoting economic development.
Some people called into the question why it’s necessary to amend the TIF District, saying they’ve noted little activity in the area of economic development over time.
Trustee Rick Montalto said the village has been approached by developers with interest in the doing business within the TIF Districts.
Michels said there’s a bit of foresight that goes into the village’s effort to promote economic development activity. He said there are a number of benefits to having the TIF Districts in town.
“These are expenses that go beyond the typical funding that the village generates from year to year,” Michels said.
Perkins said he is confused why the village is seeking public input, if they’re not going to take into consideration the community’s interests. He pointed out the way TIF funds were transferred by way of an interloan fund to purchase properties along Heartland Drive.
The village took action in November of 2018 to pass a resolution to ratify a real estate purchase and add some parcels near Heartland Drive into a TIF District to ease traffic concerns.
“It’s obvious that the decision to include that in the TIF District was made in 2018 when the property was purchased,” Perkins said. “We understand that the village wants to expand development, but at what cost.”
Michels has said the village has done its part to improve the access and response time for the fire protection district.
A vote to consider amending TIF District No. 2 will take place at a later date.