Geneva mulls extending East Side TIF to complete Route 38 improvements

GENEVA – Geneva officials want to extend the East State Street Tax Increment Finance District by 12 years because the Illinois Department of Transportation’s updated construction schedule for East State Street improvements goes past the TIF’s 23-year lifespan.

A tax increment financing district – known as a TIF – is a development tool local governments use to encourage development or redevelopment in blighted areas that would be too expensive to improve with private dollars alone.

Speaking at the Aug. 21 City Council meeting, Economic Development Director Cathleen Tymoszenko said the TIF 2 district was created in 2000 and by law expires after 23 years – this year.

IDOT confirmed a bid-letting date at the end of 2024, with construction to begin in spring 2025. Construction would continue for 24 months, Tymoszenko said.

“This schedule brings the project timeline past the life of TIF 2 and past the spending range of the TIF 2 funds,” Tymoszenko said. “Without the TIF extension, the East State Street project is severely at risk.”

The city has worked with IDOT since 2003 for roadway, utility and streetscape enhancements for East State Street, extending from the Fox River to Kirk Road, Tymoszenko said.

“Approximately 40% of the linear roadway is within TIF 2,” Tymoszenko said. “IDOT has delayed the start of the project a few times.”

TIF extension by state law

State law allows a TIF district to be extended 12 years past its expiration for a total of 35 years, she said.

However, for a municipality to get General Assembly approval, it requires support letters from overlapping tax districts within the TIF, Tymoszenko said.

State Sen. Don DeWitte, R-St. Charles, will support the TIF extension in the fall veto session, Tymoszenko said, if taxing districts send letters of support.

The tax increment for the 12-year extended period is about $2.9 million, she said.

The value of property in an established TIF becomes the base amount. It continues to go to local taxing bodies, but the increase in the property’s value from redevelopment is what generates the tax increment, going to the TIF fund for improvements, according to the Illinois TIF Association and the Illinois Department of Commerce and Economic Opportunity.

Taxing bodies that were notified are Geneva School District 304, the Geneva Public Library District, Geneva Township, Geneva Township Highway District, Waubonsee Community College, Kane County Forest Preserve District and Kane County, officials said.

Initial discussion of the TIF is included in the school district’s agenda for its Monday meeting.

In a memo to the board, Superintendent Andy Barrett recommended they continue the discussion at the Sept. 11 meeting and make a final decision at the Sept. 25 meeting to meet the city’s request to provide a formal response by Sept. 29.

TIF 2‘s successful public-private partnerships include CVS Pharmacy, Valley Animal Hospital, Munchie P’s commercial building, Dairy Queen, Aldi, Country Village Meats, 501 E. State Street Retrofit, Riganato’s Old World Grille and Isaac’s Upholstery, Tymoszenko said.

The $2.9 million that would come from the extended TIF, combined with existing funds, would complete the reconstruction of East State Street, Tymoszenko said.

“We believe it will greatly enhance the east corridor of the city, which, in turn, will benefit all of the property owners within the city and the other taxing districts that we share the jurisdiction with,” Tymoszenko said.

‘A perpetual TIF’

Fifth Ward Alderperson Robert Swanson said he feared TIF 2 would become “a perpetual TIF,” depriving local taxing bodies of their full measure of property tax revenue.

“It seems like it just never ends,” Swanson said. “We’ve been there for 23 years. Now we’re looking at 35 years. … That’s two generations of Genevans living through this TIF, so I would think that we could end this TIF as soon as possible once the East State Street construction is completed and move on. It’s been a successful TIF. There have been a lot of successful developments and I’d like to see an end to it.”

Fourth Ward Alderperson Amy Mayer disagreed.

“From my perspective, having grown up on the east side and seeing the corridor that we’re talking about, I don’t feel like we’re done. I do not feel like this blight is done and everything is peachy,” Mayer said. “I think it’s wonderful that Isaac’s is putting in their sidewalk and their parking lot. I just drove by and I was like, ‘This is great.’ Like, a business that’s been open since 1970 finally gets a decent parking lot. This is a great thing. I’m in favor of extending this. I think that 35 years is just fine by me until it gets done.”

Mayer was referring to an almost $70,000 TIF project the council approved last year for Isaac’s Upholstery and Furniture, 830 E. State St. The funds were allocated to restore the Simpson Street parkway and reimburse the company for 60% of its cost to upgrade the parking lot.

First Ward Alderperson Anias Bowring added her support, saying she agreed with Mayer that, “There’s more that can be done over there.”

“I think it’s a win-win-win for businesses, for the community, for the city and so I’d like to see that work go forward,” Bowring said.

Third Ward Alderperson Dean Kilburg said he has witnessed the impact of the TIF district and “this has been a successful undertaking.”

“Not only these businesses, but the services that they provide for the east side of our community,” Kilburg said. “CVS and Aldi’s have been great contributors to the quality of life for residents living on the east side of our community. They’re generating an asset for the community. I think it is an example of what a TIF can do in revitalizing a neighborhood.”