Central - Wednesday, July 23, 2008 12:41 - 0 Comments

Officials wonder if TIF is best decision

By Katie Backman

RRSTAR.COM

Weeds sprout from cracks in the parking lot of a vacant movie theater that sits a short distance from the trendy District at CherryVale, a modern lifestyle center at the mall.

That’s what Bunny Alexander sees of the CherryVale Mall from her home near South Bell School Road.

“It’s nothing great to look at,” she said.

Cherry Valley village officials say developers agree with Alexander. They don’t see the overgrown, empty lands and the dilapidated abandoned buildings around the 30-year-old mall as prime areas for development — so the developers need an incentive.

The village is studying whether to create a tax increment financing district that would include the undeveloped properties around the mall. A TIF district is a long-term financing tool a government uses to ignite development in blighted neighborhoods or places where development has taken too long to blossom.

Alexander wonders if that incentive would raise or lower her property taxes and the value of her home. Empty buildings and decaying property aren’t doing much good for the neighborhood. She would rather see some development and wants people to have more respect for the buildings they leave vacant.

“The movie theater has grass growing in the parking lot,” she said. “I would want development, but first I would want to know how it would affect my taxes.”

Before a TIF district can be approved, Village Board members have to go through several steps — a key one is getting the support of other taxing bodies.

The Rockford School District, Rockford Park District, Cherry Valley Library and the Winnebago County Forest Preserve District are just a few of the entities that would have to agree with Village Board members.

A TIF district could bring new businesses, jobs and retail to the area, but those benefits would come with a price for local taxing bodies. As development within a TIF district blooms and property values rise, the municipality, in this case Cherry Valley, would collect any increases in property tax revenue and spend the money on redevelopment projects. Until the TIF district expires after 23 years, other taxing bodies would continue to receive the same property tax revenue they did before the TIF was created.

Parks offer support
Tim Dimke, executive director of the Rockford Park District, said he understands that once a TIF district is in place, and if the assessed values increase, the Park District wouldn’t receive the additional funds. The tax increment is placed into an account Cherry Valley would create and manage.

However, Dimke said potentially more people could be around the mall, which is only a mile away from the Park District’s Magic Waters. Dimke said increased traffic would lead to improving and widening the roads that could include the routes to the water park.

Dimke said if Cherry Valley village officials think healthy expansion will sprout from the TIF district, then he will support their decision.

“It’s important to support the efforts to improve the areas that will bring more tax revenue in the long term,” Dimke said. “Our main goal is that Magic Waters continues to be self-supporting, and better developed area could help with that.”

Cherry Valley President Jim Claeyssen said the proposed TIF district could jump-start economic development that would create more businesses and new jobs. Other tax entities will not lose any of the tax revenue they receive today, Claeyssen said.

School Board uncertain
David Kelley, a School Board member, said he’s skeptical about Cherry Valley’s possible TIF district because the mall doesn’t appear to be an area that would need development assistance.

The District at CherryVale opened last November. The $11 million, 75,000-square-foot open-air shopping center features pedestrian walkways, trees, curbside parking and outdoor music and includes shops like Coldwater Creek and Chico’s.

In 2006, officials predicted that the new lifestyle center could generate at least $175,000 in retail sales tax revenue for Cherry Valley.

Kelley said that while TIF districts generally expire in 23 years, municipal officials are notorious for extending the TIF. Because TIFs don’t seem to get the job done within the two decades, Kelley said he’s not sure that the financing tool actually works.

“I can’t think of any part of Cherry Valley that is in a deteriorated condition that would qualify for a TIF,” Kelley said. “But a TIF is a case-by-case decision, so I don’t automatically oppose all.”

Nancy Kalchbrenner, School Board president, agreed. Before she could state an opinion, Kalchbrenner said she would need more research and discussion with her board and Cherry Valley officials.

“We support economic development, but we have to weigh that with our own financial issues,” she said.

The Village Board will continue discussion on the issue Tuesday at its planning and development meeting.

Staff writer Katie Backman can be reached at 815-987-1389 or kbackman@rrstar.com.

What is a TIF?
A tax increment finance district is a long-term municipal financing tool used to generate money for areas of a community that are blighted or have taken several years to develop. A TIF can revitalize older areas, stabilize property values and make vacant land or buildings functional again. It does not freeze property taxes or increase property taxes.

As development within the TIF district blooms and property values rise, the increased tax revenues are placed in a special municipal fund while other taxing entities continue to collect the existing or base property-tax receipts. Winnebago County has 29 TIF districts.

Source: Thomas Green, a Rockford attorney with Barrick, Switzer Long and Balsley law firm.

What’s next?
Cherry Valley Village Board members are searching for a consultant to survey CherryVale Mall and surrounding areas to see if it would qualify as a tax increment financing district. More on the topic will be discussed at a planning and development committee meeting at 6:45 p.m. Tuesday at Village Hall, 806 E. State St.