With a TIF proposal from the Village of Oak Park already on the table, District 97 is considering other revenue-generating options for the cash-strapped district, including one that involves selling district properties and then leasing them back over time.
The village agreed last November to consider diverting $5 million from tax increment financing (TIF) districts to cover Dist. 97’s budget deficit and avert deeper spending cuts.
The Council of Governments, a group composed of officials from various Oak Park taxing bodies, including Dist. 97, have been in talks about other ways to find financial support to the Oak Park elementary school district.
At a meeting last Wednesday, Dist. 97 board members got an overview of the leaseback option, where the village would purchase Dist. 97 properties with money in the Madison TIF fund and lease them back to the district during a specified time.
The concept is a variation of a “buy high/sell low” model, where
properties are acquired at an expensive cost, and then sold at a low cost to a developer.
The leaseback is one of 14 options the COG is considering, including shifting dollars from the downtown TIF to Dist. 97.
Don Robinson, Dist. 97 assistant superintendent for finance and operations, said a sell-and-leaseback option is a common financing practice.
A business or company would, for example, sell a building to an owner and then lease it back from them. A leaseback would work in a similar way, Robinson said. Dist. 97’s headquarters at 970 Madison and its storage warehouse at 541 Madison are the properties under consideration for the leaseback.
The leaseback idea, Robinson said, is an efficient way to transfer money from a TIF district to the school without having some of that money diverted to Cook County and other jurisdictions.
If the village were to give Dist. 97 money out of its TIF funds, legally it would be required to give appropriate proportions to all of the taxing bodies, including local school and park districts, but also districts outside the village, such as the county and the Mosquito Abatement District.
The COG would need to know by March what the district decides, but the leaseback option was most favored by the group’s CFOs, said Carolyn Newberry Schwartz, president of the District 97 Board of Education.
The COG has expressed concern over TIF revenue going to Cook County and other taxing jurisdictions, money that should stay within the village. The village estimates that 11 percent goes to taxing jurisdictions outside of Oak Park, meaning hundreds of thousands of dollars would leave the village in such a transfer.
Newberry Schwartz said the CFOs also want to ensure that the burden on each COG member is shared fairly, and that whatever option is chosen does not result in an extra strain on taxpayers.
“I think the message that’s coming in very clearly from everybody that I’ve spoken is that there is a need here and something needs to be done,” she said.
The board did not deliberate on the matter, but will likely do so at its next regular meeting Feb. 28.