Journal & Topics Media Group

Dist. 15 Leans Toward Extending Village’s Downtown TIF

Board To Be Presented With Agreement Sept. 22

Even though Palatine Elementary School Dist. 15 would lose an approximate $2.1 million in tax revenue for two consecutive years, the district is likely willing to support the village of Palatine’s request to extend the downtown Tax Increment Financing (TIF) district for those two years so the village can complete various infrastructure projects.

During discussion at the Wednesday, Sept. 8 school board meeting, the village’s TIF attorney, Ares Dalianas, recommended the board enter into an intergovernmental agreement (IGA) with the village so all obligations and provisions are properly outlined. 

The 23-year downtown TIF district created in 1999 to spur redevelopment has lost approximately $19.5 million in expected tax dollars dating back to 2011, Village Manager Reid Ottesen previously told the school board.

In a TIF, all short-term gains are reinvested and leveraged so all taxing bodies receive larger financial gains in the future. Property value growth over the base generates a tax increment, which is used by the village to make additional investments in that TIF district.

Upon retirement of a TIF district after 23 years, the tax increment becomes gains or windfalls to other taxing bodies.

The village can use TIF funds for things such as property acquisition, construction of public improvements, renovations of buildings, demolition and site preparation, and financing costs.

When the downtown TIF was created, the village saw property values increase through 2009. But the economy took a downturn, which is when property values began to decline, resulting in losing $19.5 million in incremental revenue since 2010 and likely an additional $10 million moving forward totaling $30 million.

Because those dollars have not come in like the village had hoped, the village is asking the school district to support extending the TIF by two years so they can complete about $18 million worth of various projects before giving back tax dollars to various taxing bodies including Dist. 15.

The downtown TIF is set to expire in 2022, so should the extension be granted, Dist. 15 would not see any additional tax revenue until fiscal year 2026, which begins July 1, 2025.

The district’s financial advisor, Elizabeth Hennessy, told the school board that by supporting the extension, it will hopefully provide more value for all of the properties that will benefit the district long-term in terms of tax revenue.  

The board is expected to be presented with an IGA to approve at the Sept. 22 committee of the whole meeting so the village can get approval to extend the TIF from the state, as long as all of the other taxing bodies such as Dist. 211, Harper College, park district and library among other units of government support the extension as well.

 

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