Geneva City Council gives nod to create 297-acre 4th TIF district

GENEVA – The Geneva City Council approved going forward to create a fourth tax increment finance district that includes the area of a 211.43-acre annexation petition from Midwest Industrial Funds.

The Planning and Zoning Commission recommended approval of the company’s petition to annex and rezone.

Midwest Industrial Funds, renamed MWI Property Group, proposed the acreage for annexation and development as an industrial site. It is located between Route 38 and Kautz Road, south of Fabyan Parkway.

The total area for annexation is 225 acres, with 211.43 acres for the industrial site. About 14 acres on the north end of the site, which are part of the Route 38 right-of-way, will not be developed.

At a special meeting April 8, the City Council approved moving forward to create a fourth TIF district with $185 million estimated for eligible redevelopment costs, documents show.

A TIF district is a development tool municipalities use that diverts the increased sales tax or property tax revenues to support improvements within the district. TIF districts can last up to 23 years.

After a two-hour public hearing April 11, the Planning and Zoning Commission voted to recommend approval. The proposal will go to the City Council for final action, but the date has not yet been scheduled.

The fourth TIF is proposed for 297 acres or 20 parcels, bounded by Route 38, Fabyan Parkway, the DuPage and Kane counties border and Kirk Road, documents show.

Of those, 224 acres are vacant, 38 acres are improved, about 13 acres are railroad and about 22 acres are right-of-way.

The Joint Review Board will meet at 10 a.m. April 30 at City Hall to consider the new proposed TIF.

The Joint Review Board is made up of representatives of the taxing bodies that would be affected by the creation of a new TIF district: Geneva Park District; Geneva School District 304; Geneva Township; Geneva Public Library District; Waubonsee Community College District 516; and Kane County.

At 7 p.m. June 3 at City Hall, the City Council will hold a public hearing on the TIF and then vote on it.

Reasons for creating TIF 4

An area can qualify to be a tax increment finance district if it is judged to be blighted, have issues like chronic flooding, lack of growth in equalized assessed valuation, primary structures older than 35 years and inadequate utilities – standards which this acreage meets, according to the city’s eligibility report.

The proposed TIF 4 lists a dozen eligible redevelopment costs, including administration and professional service, site marketing, financing, relocation, public works improvements, assembly and site preparation.

Economic Development Director Cathleen Tymoszenko said the Southeast Master Plan — initiated in 2010 and completed in 2012 — has been the guiding force for decision making when it comes to this project.

“The city has been planning for this expansion for over 50 years, and has taken a series of proactive steps,” Tymoszenko said.

These include boundary and annexation agreements, acquiring easements, designing utilities, and planning for the Kautz Road extension from Fabyan Parkway to Route 38 in cooperation with public jurisdictions and private property owners, she said.

“The strategic plan includes an economic development of securing a resilient local economy through new commercial and industrial opportunities to expand and diversify the city’s tax base,” Tymoszenko said.

Developing this area for industry and manufacturing would increase the city’s property tax base and reduce the portion paid by residential property owners.

Manufacturing is the largest industry in Illinois. In Kane County alone, manufacturing contributes $17.2 billion to the local economy, Tymoszenko said.

Even sales tax could be increased through expanding the industrial base, as one of the top 10 sales tax generators in Geneva is in the business park, she said.

Industrial users of the city’s electric and water utilities are among the top rate payers.

But the city has a significant amount of infrastructure that needs to be completed, she said.

“The level of improvements required – the private cannot do it alone. The public sector cannot do it alone,” Tymoszenko said.

The current equalized assessed valuation of the property is $650,647 and the total estimated taxable property at the conclusion of the 23rd year of the TIF is estimated at $116 million, Tymoszenko said.

“If it was not a TIF, where would that funding go,” Third Ward Alderperson Becky Hruby asked.

“If it wasn’t a TIF, you’re not going to see that type of investment,” Tymoszenko said. “You have such a heavy lift to pay for, you’re not going to get a developer that is going to be able to have any kind of return on investment, if they have to do all that.”

The city could do it – by raising taxes to pay for it, she said.

“It would be risky because it would be a, ‘Build it and they will come,’ situation,” Tymoszenko said.

By creating a TIF, the developer’s means would be verified through a third party, and the city would hope for support from the other taxing districts, acting as the Joint Review Board.

“We’re asking them to partner with us to get to the point where we can realize all the benefit. But for the TIF, it won’t get done,” she said.

The Joint Review Board can vote it down, but that does not kill the deal, it just makes the process more difficult. “They get their day to go through the facts, look at the information and make a decision based on their taxing bodies’ best interests,” Tymoszenko said..

The council voted 8-1 in favor of going forward. Fifth Ward Alderperson Robert Swanson voted no; First Ward Alderperson Michael Bruno and Fourth Ward Alderperson Martha Paschke were absent.