The Riverside village board took a step closer to forming a TIF (tax increment financing) district in downtown Riverside when trustees on Feb. 6 voted 4-1 to authorize hiring a financial consultant to complete a preliminary report that would determine whether such a district is feasible.
Trustee Cindy Gustafson was the lone dissenting vote. Trustee Thomas Shields was absent, though Village President Harold J. Wiaduck Jr. said it was his understanding that Shields supported the idea of financing a preliminary report.
The financial firm of Kane, McKenna and Associates will be paid a total of $37,500 plus out-of-pocket expenses to complete a two-phase study that is expected to take six months.
“We’re kind of neophytes at this,” Wiaduck said. “We want to know if this isn’t going to work, too. Kane McKenna was the only [financial firm interviewed] who said, ‘We’ll tell you if we think it’s not going to work.'”
The village issued a request for proposals for TIF consulting last fall, receiving six responses. Village Manager Kathleen Rush and Wiaduck interviewed three of those firms, which included Kane McKenna, Camiros Ltd. and S.B. Friedman & Co.
In September of 2005, at a meeting concerning the ongoing Transit-Oriented Development Study for Riverside’s central business district, a majority of trustees appeared to be in favor of creating a TIF district there as a way to fund the implementation of the study.
A TIF district can help local governments revitalize areas by freezing property assessments within the district for up to 23 years for every taxing body except the village. As property values rise due to redevelopment, the village can capture that new tax revenue and use it to fund further improvements within the TIF district. All other taxing bodies, such as schools, libraries, etc., can only tax properties within the TIF on the assessment set when the TIF was formed.
“[Hiring Kane McKenna] doesn’t create the TIF; it creates the study,” Wiaduck said. “If we’re going to be serious about this, we’re going to have to … do it as quickly as possible so we can capture the increment to take care of the infrastructure in that district.”
The first phase of the study, which is expected to cost between $10,500 and $12,500, will seek to determine whether downtown Riverside qualifies for TIF district creation. That report, in addition to assessing feasibility, would recommend boundaries for a TIF district, state the purpose of the redevelopment plan, meet with other taxing bodies in the village and identify any other financing programs (such as Special Service Areas) that could either complement or replace a TIF district.
While TIF districts are often used as a redevelopment tool for blighted areas, TIFs can also be used for redevelopment of a “conservation area” in which 50 percent or more of the buildings within the district are at least 35 years old.
According to Philip McKenna, president of Kane McKenna, fewer qualifications are required for establishing a conservation area TIF. It’s probable that Riverside would apply for a downtown TIF as a conservation area.
In Phase II of the work, which was also authorized by the trustees’ vote on Feb. 6, Kane McKenna will complete a redevelopment plan that includes cost estimates for redevelopment projects within the proposed TIF area, and would include a variety of community meetings and public hearings. Phase II also includes ordinance preparation for the establishment of the TIF.
Gustafson, who voted against the study, said village officials had spent significant time contemplating the creation of a TIF district in the past and had determined it wasn’t right for Riverside.
“They looked at it pretty heavily and decided it was not something they wanted to do,” Gustafson said. “This is a lot of money to put into it.”
Wiaduck acknowledged the past work, but countered that things in Riverside had changed since that time.
“There have been a lot of changes in zoning and the first real strong indication of development that would feed this concept for us,” Wiaduck said. “We should evaluate the proposal in that light.”