Oak Park officials ask schools to amend previous agreement on downtown TIF

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By Anna Lothson

Staff Reporter

Discussions about Oak Park's once settled downtown tax increment financing district, often referred to as the "zombie TIF" are about to resurface.

A lawsuit over the controversial TIF, which was used to build millions of dollars of garages and brick streets, was reached in late 2011 when the village board and both local school districts reached an agreement stating the TIF would no longer be used for economic development, instead spending its closing years simply funding payouts to local taxing bodies. The recent Colt Building site development proposal, however, has village officials suggesting that the agreement now be amended to make funds available to help pay for site development and infrastructure fixes to a village-owned site that's been used as a parking lot for years.

A letter was addressed May 6 to the school boards at District 200 Oak Park and River Forest High school and the District 97 elementary schools from Village President Anan Abu-Taleb and former Village President David Pope. That was the same day Abu-Taleb was sworn in. The letter references the proposed $70 to $80 million integrated mixed-use development on the 81,000 square-foot site. The proposal was received positively by the village board, but it also asked for alternate proposals to be received in early June before the board will move forward.

"As part of the progression toward any development on this site, whether the Clark Street proposal or some other as yet unknown alternate, our community will need to make site-specific infrastructure improvements," the letter reads. "The ability to dedicate property tax receipts from any development on the site …will help to enable us to make a development on this site possible."

The downtown TIF is set to expire in 2018, and because of that, the letter points out the change to the agreement would allow the project to fuel the TIF during the short duration it will exist if or when the project is built.

The TIF agreement is anticipated to amass roughly $72 million in property taxes before the TIF ends in 2018. Instead of holding onto that money for economic development, the agreement dictated that Oak Park dish out about $16.7 million to D97 and $14 million to D200. The remaining $23.5 million in the agreement was allotted to Oak Park to pay its debt from past projects. A total of $48.8 million was handed out from the TIF as part of the agreement, according to a Dec. 13, 2011 Wednesday Journal article.

The arrangement that will be proposed by village staff will be similar to the agreement included in the settlement for the proposed Lake and Forest development. Pope said allowing the village to tap into the TIF would allow for the revenues generated to be used for infrastructure investment.

"To allow development to move forward would be a worthwhile effort in helping to facilitate the development in the site in the first place," Pope said. A few years of revenue that would be generated in property taxes, he said, could help create a significant development for the community.

That development concept recently presented to the board includes retail, as many as 250 apartments, a parking garage and a new street that would link North Boulevard and Lake Street.

Although the 2011 settlement came with a heap of legal fees to come to an arrangement between the village and school districts, Pope thinks the potential to develop this site will be seen favorably by all taxing bodies.

"I don't think this is controversial at all," he said. "It's pretty straight forward. The parcels right now aren't generating any property taxes at all."

Instead, he thinks it's important for the village to take the potential development of the site and turn it into opportunity for revenue that would likely be captured only for a few years. Based on how long it takes to pass projects through Oak Park's approval process, Pope said it's not likely a shovel would touch ground until sometime in 2014 at the earliest. It would then take a few years to finish the project, making the property not fully taxable until 2016 or 2017.

"At that point, there is likely a couple years of full revenue coming back," Pope added. Still, those revenues would help offset the costs of site preparation and infrastructure costs that would otherwise need to be incurred by the village to make development happen.

Pope said the settlement agreement has come up various times during the past few years and it was known that there was a possibility the agreement might need to be discussed again.

District 200 School Board President John Phelan wasn't immediately reachable Tuesday for comment, but District 97 spokesperson Chris Jasculca provided a statement on behalf of the board, stating it has received the request and will be reviewing it soon.

"We are certainly open to the idea of discussing the options that are available regarding the TIF, and anticipate that the steady improvement in the economy will present additional opportunities for the local governing bodies to have these types of critical conversations," the statement reads.

"What is most important, however, is that we continue to work closely and collaboratively with each other to ensure that any and all decisions we make serve the best interest of the entire community."

D200 board open to TIF request

Oak Park Village Manager Cara Pavlicek discussed the village's request with the D200 finance committee at their meeting on May 14. She said the village would like to finalize a decision with the high school by June.

Board members were generally positive about the request, though D200 President John Phelan noted that there are many details still needing to be worked. It was noted at the finance meeting that OPRF would see an eventual financial benefit from amending the TIF agreement — the high school would generate additional property tax revenue from any new properties developed at the Colt site.

Staff Reporter Terry Dean contributed to this report

Contact:
Email: anna@oakpark.com Twitter: @AnnaLothson

Reader Comments

11 Comments - Add Your Comment

Comment Policy

Adam Smith  

Posted: May 16th, 2013 4:02 PM

Indeed "dy" - TIFs are legally for "blighted areas". The only reason the area is blighted financially is by mismanagement and overpayment of properties by the Village. No more TIF extensions or redirections. Admit your mistake, let the TIFs expire and move forward.

dystOPia  

Posted: May 16th, 2013 3:27 PM

@AdamSmith ... yes, Pope's plan is based on the flawed assumption that development can only occur with village subsidy. There is no proof to this assumption, as the village never marketed the site w/o financial subsidy expectations. It is also contrary to the village's self-promotion that DTOP is doing great. Why does the village insist on publicly subsidizing development, as it were CHA housing? And yes, this is contrary to Abu-Taleb's development policy stated during the campaign.

Village Voice  

Posted: May 16th, 2013 10:43 AM

I'm particularly disappointed to see Anan signed on to this, given his pre-election rhetoric about keeping Oak Park affordable. As Adam points out, the TIF as employed by Oak Park is merely a shell game with taxpayers the guaranteed loser: the village gets public funds for its dalliances into real estate speculation, and we all know the School Districts have no problem making up the village-imposed shortfall by taking it out the hides of taxpayers. Meet the new boss, same as the old boss.

Adam Smith  

Posted: May 16th, 2013 10:19 AM

And the basic premise is flawed - it is assumed a project won't go forward without subsidy. If that is what Clark says, tell them no thank you and find someone else. They truth is, most developers run from Oak Park due to onerous regulations and intrusive oversight. Perhaps Anan will be able to attract a better class of developer who doesn't have his hand out.

Adam Smith  

Posted: May 16th, 2013 10:14 AM

The school districts will readily agree to a change, and it's our fault. They know if they are short of funds they can increase the levy and stockpile $$$ (D200) or pass another referendum (D97). All out in the open with the full approval of the voting public. Stop diverting school funds and make the project self sufficient. If downtown Oak Park is a great as we say, it shouldn't need any more subsidy.

John Butch Murtagh from Oak Park, Illinois  

Posted: May 16th, 2013 9:53 AM

Maybe a litmus test is needed.If the village can get the Borders Building back on the tax rolls, then we can discuss Clark.

dystOPia  

Posted: May 16th, 2013 8:57 AM

Pope provides a false dichotomy by presenting only two options, designed to favor his position of heavily subsidized redevelopment. Pope fails to mention, that like the Lake-Forest site, the current vacant parcels that currently fail to generate property taxes at the Colt Westgate parcels resulted from the village removal of tenants and building demolition. He also fails to mention the third option of simply selling the parcels to the highest bidder w/o subsidies, resulting in property taxes.

dystOPia  

Posted: May 15th, 2013 3:06 PM

The Village Board President does not have the authority to request D200 to adopt an amendment to the 2011 DTOP TIF Settlement Agreement without prior village board review and approval. Since this issue does not qualify for an executive session, it appears former President Pope (once again) went renegade and exceeded his authority. A fitting last act for a legacy of arrogance and ineptitude.

John Butch Murtagh from Oak Park, Illinois  

Posted: May 15th, 2013 11:45 AM

Jim - A serious problem in OP during the last decade is a lack or transparency on commercial development project. It was a subject at every debate and was acknowledged by candidates. To go to D200 for a change in the TIF remediation contract before the project finances have been discussed by the 2012 board is about as opaque as it gets. The fact that the letter to D200 was sent on the last day of Pope's term and before the 2013 board has even met for business is even darker.

Jim Bowman from Oak Park  

Posted: May 15th, 2013 10:50 AM

Jn Butch, is transparency honored here? or are you flagging it for future reference?

John Butch Murtagh from Oak Park, Illinois  

Posted: May 14th, 2013 11:34 PM

Note to 2013 Oak Park Village Board. Anan gets a Mulligan on this Pope led TIF transaction, but TRANSPARENCY is still the 2013 Word of the Year.

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