West Dundee to exclude future residential developments from proposed TIF

To alleviate concerns from other taxing bodies, West Dundee has agreed to exclude any future residential developments from the provisions of a proposed special taxing district.

The village is in the process of establishing a tax increment financing district that officials hope will spur economic activity and serve as a funding mechanism for infrastructure projects. It would cover a large part of the downtown area, properties along Route 31 south of Route 72, and land off Route 31 owned by the Haeger family.

So as not to overburden the local school district and other agencies, any new housing projects constructed within those boundaries will be removed from the TIF, according to an agreement between the village and Community Unit District 300. That means incremental revenue generated by new residences will be distributed to all applicable taxing bodies, rather than recaptured and used for economic development or public improvements, Village Manager Joe Cavallaro said.

In a TIF district, the property tax revenues that go to taxing bodies are frozen at a certain level, which is set on a base assessed property value, for 23 years. Any taxes generated above that level can go back into redevelopment.

The concept is often controversial among local governments, especially when the TIF district includes the potential for new houses or apartments.

The redevelopment of the Haeger property, for example, has a "large likelihood" of including a residential component, Cavallaro said. If that development were to remain in the TIF, agencies such as the schools, library and the park district would increase the number of residents they serve, but wouldn't get additional tax revenue to accommodate them.

"That's the primary concern of all taxing bodies is that's where they generate the most need for services and demands," Cavallaro said. "What we've tried to craft is the utilization of a TIF as an economic incentive tool that provides for a benefit to the village ... but doesn't negatively affect our adjoining taxing bodies."

Excluded in the agreement is Springs at Canterfield, a new gated community being constructed along Route 31, for which economic incentives have already been pledged. Instead, the village will reimburse District 300 based on the number of students who live in that subdivision.

Both the school board and West Dundee trustees unanimously approved the agreement, which also applies to the other local government agencies. District 300 administrators were unavailable for comment Wednesday.

The village is holding a public hearing March 19 before trustees vote on the TIF plan in April.