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updated: 10/26/2020 5:32 PM

Tentative settlement reached in lawsuit over development of Woodman’s in Lakemoor

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  • A tentative settlement has been reached in a lawsuit challenging the village of Lakemoor's designation of property south of Route 120 as a tax increment financing district, a key incentive in brining a Woodman's grocery store to town.

    A tentative settlement has been reached in a lawsuit challenging the village of Lakemoor's designation of property south of Route 120 as a tax increment financing district, a key incentive in brining a Woodman's grocery store to town.
    Mick Zawislak | Staff Photographer

  • An improved road is ready to serve development near the Woodman's grocery store south of Route 120 in Lakemoor. A tentative settlement in a case challenging the designation by the village of the area as a tax increment financing district has been reached.

    An improved road is ready to serve development near the Woodman's grocery store south of Route 120 in Lakemoor. A tentative settlement in a case challenging the designation by the village of the area as a tax increment financing district has been reached.
    Mick Zawislak | Staff Photographer

 
 

A long-running lawsuit disputing the designation of a special financing district that brought the Woodman's grocery chain to Lakemoor has tentatively been settled.

Once official, taxing bodies in the designated area south and west of routes 12 and 120 will receive 50% of new property taxes generated as the land develops, rather than having the value for taxing purposes frozen for 23 years.

The lawsuit was filed in February 2015 by Wauconda Township, Wauconda Area Library District and Wauconda Unit School District 118 the day after Lakemoor officials designated 74 acres of agricultural land south and west of routes 120 and 12 as a tax increment financing district.

The property had been undeveloped for years and Lakemoor officials contended that some type of public assistance was needed to change that, due to the cost of improving the busy intersection and approach roads, and extending sewers, water and other utilities.

The village opted to pursue a TIF district, an economic incentive that freezes property taxes paid for local governments for 23 years. Any additional property tax revenue generated through development is placed in a special fund to pay for improvements within the district.

But the taxing bodies said the farm field did not meet state requirements for a TIF district. They also contended that because of the location and visibility, the property would have developed without the TIF designation.

The village early on offered a cut of the annual sales tax and eventually property taxes generated by the development as a potential settlement. But the sides could not reach an agreement and the suit continued even as Woodman's built and opened a 24-hour, 240,000-square-foot store in September 2019.

The boards of the three taxing bodies over the past two weeks approved a settlement. Terms of the agreement call for Lakemoor to disburse 50% of the increased tax revenue annually, to be divided among all taxing bodies, not just the three that contested the TIF designation.

There is no monetary value outlined because TIF increments vary by year. However, during the proceedings, the total increment over the life of the TIF district was estimated at $12 million to $18 million, according to Dean Krone, a lawyer who represented the three taxing districts.

"Our perspective is the parties had a very different perception of the merits of the TIF district and whether it qualified," he said. "There was a lot of money at stake so it took a lot of effort."

Village Administrator David Alarcon said the settlement is not yet official.

"Even though we've come to an agreement, it won't really be valid until there is a court order," he said.

The matter is scheduled for a settlement conference Dec. 30 in Lake County circuit court.

Since the Woodman's was only occupied a year ago, the property hasn't been fully assessed and any increment wouldn't be available until next year, Alarcon said.