St. Charles City Council creates TIF district to spur redevelopment of former Pheasant Run property

The St. Charles City Council voted to create a tax increment financing district to spur the redevelopment of the shuttered Pheasant Run Resort in St. Charles.

At their meeting Feb. 6, alderpersons unanimously approved creating the TIF district.

In December, a joint review board unanimously recommended that the city approve the proposed Pheasant Run Redevelopment Plan and Redevelopment Project plan. The panel also found the former resort property meets the criteria to become a tax increment financing district.

The joint review board has representatives of local taxing districts affected by a proposed TIF. Representatives from Wayne Township, St. Charles School District 303, the St. Charles Park District and St. Charles Public Library District attended December’s meeting.

TIF consultant Kane, McKenna and Associates created the redevelopment plan. KMA President Phil McKenna told alderpersons Jan. 3 that the TIF plan conforms to the city’s comprehensive plan.

Once a municipality creates a TIF district, its property assessment is frozen and new or increased taxes generated by improvements are used to pay for improvements or other development incentives. The property has seen a decline in equalized assessed valuation in the past two tax years, McKenna said.

“There’s been a decline of 33% of equalized assessed valuation and that’s prior to the fire,” McKenna said.

Pheasant Run Resort closed in March 2020 after a failed attempt to auction the resort. McGrath Honda redeveloped the former Pheasant Run Mega Center adjacent to the property and industrial buildings will be built on the former Pheasant Run Resort golf course.

A fire in May 2022 that destroyed large parts of the Pheasant Run Resort increased the need to use a TIF district to spur its redevelopment, according to the plan. Two boys pleaded guilty Feb. 8 to felony arson for starting the fire that heavily damaged the resort. Two other boys pleaded guilty to misdemeanor trespassing.

During a Jan. 17 City Council Government Operations Committee meeting, 5th Ward Alderperson Ed Bessner asked if there was a way to coax the property owners into doing more cleanup work at the tower structure that was damaged in the fire.

“I don’t know how much control we have over that,” Bessner said.

St. Charles Economic Development Director Derek Conley said a structural analysis of all the buildings remaining on the site will be done soon “to see if anything else needs to be removed in the immediate future.”

The plan estimates it will cost $42.6 million to redevelop the property, which has been designated for light industrial, retail and commercial use. The investment is projected to significantly increase the property’s EAV, McKenna said.

“The projected EAV upon completion of redevelopment activities is somewhere between $50 million and $75 million,” he said.

That investment includes an estimated $16.5 million in demolition, site preparation and environmental cleanup along with $9 million in land acquisition and assembly.

Other costs include $3 million in infrastructure/public facilities improvements, $1.5 million in rehabilitation costs, $5.5 million in interest costs and $6 million in statutory school district payments.

McKenna said the budget is spread out over time.

“It’s a 23-year budget,” he said. “That’s a long period of time. Development, as you know, doesn’t happen all at one time.”

Conley said determining redevelopment costs is difficult.

“The $42 million captures all possible costs in the event that they are needed,” Conley said. “However, for any potential project, it is not realistic that the full $42 million would be utilized.”

Conley said just because it’s an estimated redevelopment cost doesn’t mean it’s going to be paid for by the TIF.

“The city is only looking to fill in a financial gap for a potential development,” he said. “A majority of the redevelopment costs will be born by the prospective developer.”

Conley also said the estimated redevelopment costs are for the entire former Pheasant Run property, including the former golf course.

The plan also addresses the fire and its impact on redeveloping the property.

“These conditions negatively impact the possibility for coordinated and substantial private sector reinvestment in the overall redevelopment project area,” according to the plan. “Without the use of city planning and economic development resources to address certain issues, potential redevelopment activities are not likely to be economically feasible. These factors potentially weaken the likelihood for redevelopment opportunities, limiting employment and contributing to a lack of future investment in the area. To address these conditions, the city seeks to adopt the Pheasant Run TIF in order to enhance future opportunities for viable redevelopment.”

Susan Sarkauskas of the Daily Herald Media Group contributed to this report.