Oswego SD308 to see substantial increase in tax revenue from proposed Montgomery development

The Oswego SD308 School District is expected to see a substantial increase in tax revenues from the proposed development of 204 acres near Orchard Road and Caterpillar Drive in Montgomery.

The project was discussed at the June 5 Oswego School Board meeting. As the district’s Assistant Superintendent of Operations John Petzke told School Board members, the developer wants to lease half the land to a firm that manufacturers polymers, chemicals and building materials and use the development for a regional headquarters facility, a distribution center, a manufacturing building, a rail yard and a conference center.

The remaining 100 acres of land would be marketed as a build-to-suit area for warehousing, distribution and cold storage, Petzke said. The district currently receives about $6,444 a year in taxes from the four parcels proposed to be developed, Petzke said. Over a 10-year period, the district would receive $64,440.

That would increase to about $20 million, or an average of about $2 million a year, once the land is developed, according to estimates provided by Montgomery officials, Petzke said.

To spur the development of the land, the Montgomery Village Board has voted to negotiate an incentive agreement for a 10 year property tax abatement at 75% for the first five years and 50% for the second five years.

“So at a proposed 10-year abatement, five years at 75% and 5 years at 50%, the district would collect that $20 million and we would give back $12 million,” Petzke said. “That would be the abatement to the developer and the district would realize $7.9 million in improved revenue to the district over 10 years.”

The district’s administration is in favor of the proposed abatement agreement as long as there are adequate protections, Petzke said, including “limitations on tax challenges, which will require additional discussions regarding minimum assessed values.”

“The administration recommends these protections even if the Board of Education expresses support for different abatement durations or percentages,” he said.

Board members also said they were generally in favor of the project and the proposed abatement agreement.