River Forest trustees unanimously approved a loan for $340,000 during their board meeting, April 9, to buy a residential home located in the Madison Street Tax Increment Financing (TIF) district
The board voted 5-0, with Trustee Respicio Vazquez recusing himself, to loan $340,000 from the general fund cash reserves to the Madison Street TIF district fund. The money will be used to buy a single-family home at 10 Lathrop Ave and covers the $330,000 cost of purchasing the home as well as closing costs.
The contract was executed April 5 and officials expect to close on the property by May 31. Owned by local residents Marion and Jonathan Baumgarten, the property was listed for sale in May 2017, according to a listing on the real estate site Redfin.
Like the trustees’ $1 million purchase of the former Lutheran Children and Family Services (LCFS) building in November 2017, Village Attorney Greg Smith said officials saw the single-family home on the market and jumped at the opportunity to buy the space.
“It is a strategic acquisition intended for residential use in the short-term,” he said.
Village Administrator Eric Palm said River Forest has not yet talked to any developers about the property. He said the village will look to the village’s comprehensive plan, which should be ready around July 2018, as a guide to developing the parcel.
Tax funds generated from the TIF district will eventually be used to pay back the loan from the general fund.
River Forest resident Maureen Beacom said in a statement she believes the village’s purchase of the single-family home is inappropriate, since River Forest’s 2010 comprehensive plan and the Madison Street TIF limit the village’s purchase of local properties for commercial spaces. Beacom’s home shares an alleyway with the single-family home and sits next to the LCFS building.
“I believe purchasing such a property violates both the spirit and letter of the Madison Street TIF, the village’s comprehensive plan, and the spirit of the residents,” she said in the April 9 statement.
Madison Street’s TIF was started in November 2016, stretches from Thatcher Road to Lathrop Avenue and, so far, has not generated enough incremental tax revenue to pay for the property purchase. At the time the TIF was instituted, officials estimated it could generate $25 million over its lifetime.
The Madison Street TIF will have until the district expires in 2039 to pay back the $340,000 loan, which represents the second transaction by the fund following the November 2017 loan from the general fund to the Madison Street TIF to buy LCFS.
TIF funds may be used for a variety of projects, from property acquisition to public infrastructure improvements to incentives for developers to bring in new businesses.