Click here to read the settlement agreement.
The controversial tool that Oak Park has used to build millions of dollars worth of garages and brick streets will remain in place until 2018, after an agreement was reached last week. But it will be more akin to the walking dead, as Oak Park’s downtown tax increment financing district, or TIF, won’t be used for economic development any longer, making payouts instead to local school districts.
One village official likened the TIF to an old-timer taking it easy in his retirement years, after years of work.
“I would disagree with the assessment that it’s a zombie TIF,” said Craig Lesner, chief financial officer for the village. “It’s come to the end of its life for sure, and it will be dead in 2018.”
All it took was about 40 minutes last week to finally settle a lawsuit that’s been going on for almost two years and has cost Oak Park taxpayers some $685,000 in lawyer fees.
Three Oak Park governmental bodies voted 19-1 on Dec. 13 to end the long-running lawsuit after months of private negotiations. The vote included the boards of Elementary School District 97, Oak Park and River Forest High School District 200 and the Oak Park village board. Sharon Patchak-Layman, a member of the high school board, was the lone “no” vote.
The upshot of the settlement is that the downtown TIF district — which siphons off property tax increases to be used for economic development — will continue until its expiration date in 2018. If it had ended, as some at the high school desired, District 97 would have lost some $9 million in state aid, because of how Illinois calculates its payments to elementary school districts.
From now until the TIF ends in 2018, it’s expected to amass some $72 million in property tax dollars. But rather than holding onto that money for economic development, the settlement dictates that Oak Park will instead dish out the lion’s share to other governing bodies, including the school districts, library and park district.
Roughly $48.8 million will be handed out from the TIF, and the breakdown will be the same as a typical Oak Park property tax bill. Most of the money will go toward the schools — District 97 would get about 34 percent of the pie, or $16.7 million, while the high school will take in about 29 percent, or $14 million.
The remaining $23.2 million will allow Oak Park village hall to pay off the debt it’s accumulated from past projects without raising property taxes. Those include everything from the construction of a massive public garage to the recent beautification of South Marion Street with bricks and bike racks.
The high school first filed the lawsuit against the village in February 2010, in a dispute over payments from the downtown TIF. John Phelan, a member of the District 200 board who helped negotiate the settlement, said they were able to resolve things by ceasing arguments over who was right or wrong, and figuring out how to use the $72 million from TIF pot in a way that all sides could agree to.
He said recent out-of-court mediation sessions went a long way toward ending the battle. Altogether, the three sides met with former judge Julia Nowicki three times, costing some $20,000 for the $500-an-hour mediator’s services.
“The parties didn’t spend the mediation sessions dwelling on who was right and who was wrong,” Phelan said. “My father once told me that I’d have to face a choice on occasion: Would I rather be right or would I rather be happy? And when taxpayer dollars are being spent on lawyers, we have an obligation to look at what solution serves our constituents in the future, rather than where, if any, blame should lie.”
The three sides said last week that they hoped to go before a judge in the next week or so to have the lawsuit officially dismissed.