Four years into the Ogden Avenue TIF District, for an everyday citizen of Brookfield it’s not easy to judge its success.
On the one hand, the Ogden TIF District has captured an increment of $521,042 during its history, which has allowed the village to purchase property within the TIF and is about to help fund a radio ad campaign and developer event officials hope is the first step in spurring commercial development on Ogden and elsewhere.
On the other hand, for tax year 2012, the Ogden Avenue TIF produced no increment at all, and the neighboring Congress Park TIF created in 2011 has never produced any increment.
For Keith Sbiral, Brookfield’s assistant village manager and one of the architects of Brookfield’s TIF districts, people shouldn’t judge the success of the TIFs on what has happened in the past four years.
The life of a TIF district is 23 years, and Brookfield’s are in their infancy, a period marked by a national financial meltdown whose effects were felt on Main Street as well as Wall Street.
“I think if you’re looking for an answer on whether the TIF’s been successful, you have 20 more years to conclude that,” said Sbiral, who added he’s confident that things will turn around.
“This is a little unique in that 2008 saw a significant downturn with respect to real estate,” he said. “It’s natural we’re seeing what we’re seeing.”
Most of the increment captured by the Ogden Avenue TIF was realized in 2008, its first year, when it resulted in nearly $323,000 in TIF revenue. Since then, the increment has fallen each year. In tax year 2011, the Ogden TIF produced just $13,174.
The “increment” a TIF produces results from the equalized assessed value (EAV) of property within the TIF district. During the life of the TIF, increased EAV within the boundaries of the district means revenue for the TIF fund.
That money can be used for such things as buying and assembling property, making public infrastructure improvements or even providing incentives for developers. Prior to 2009, TIF districts in communities around Brookfield boomed and developers swooped in and converted underused or vacant property into commercial developments that increased EAV dramatically.
But by 2009, after the national real estate crash, development ground to a halt and properties languished. EAV began to drop as properties were reassessed.
Village-wide, according to the Cook County Clerk, Brookfield’s EAV fell 21.2 percent from 2010 to 2012, from a high-water mark of $485.3 million to $382.2 million. That 2012 level is just barely greater than the EAV of Brookfield in 2006.
Between 2006 and 2010, EAV in Brookfield grew by 28.2 percent. The real estate crash wiped out almost all of that increase in the span of two years.
And while residents of Brookfield may look at that as a particular failure, the village isn’t alone in its TIF woes.
In his annual Chicago and suburban Cook County TIF report released on July 11, Cook County Clerk David Orr noted that TIF revenue was down 3 percent in the suburbs and just barely increased in the city of Chicago during tax year 2012. That was the fourth straight revenue decrease for suburban TIFs countywide, a trend that began in 2009, when suburban TIF revenue dropped by 16 percent.
In the 2012 TIF report, Orr stated that of the 281 suburban TIF districts, 127 had revenue declines. Brookfield had two of the 76 suburban TIF districts reporting no revenue at all in 2012.
Even in better economic times, TIFs tend to start slowly and reap benefits later on.
“It took Downers Grove a decade to buy all that property,” said Sbiral, “and it took LaGrange a long time.”
In Brookfield, things are beginning to turn around, said Sbiral.
Not reflected in the 2012 TIF report are three Ogden Avenue parcels that have been improved and will be reassessed at a higher level in the future —Dunkin Donuts, D.J.’s Scuba Locker and the Marathon gas station.
“When Dunkin Donuts comes online, we’ll have an increment; there’s about a year delay,” said Sbiral. “The same with the scuba shop and Marathon reopening. At the same time moderate growth will come, which will have a pretty big impact on [producing an increment].”
The TIF also has not been a money-loser, because of the way Brookfield chose to approach it. Instead of issuing bonds and pledging future TIF revenues to pay the debt service, Brookfield picked a pay-as-you-go model, where revenues that came in would guide what could be done.
Had Brookfield chosen to issue bonds early on, the debt service payments would be coming out of general operating revenues, because the TIF fund would not have collected enough to make the payments.
“I think we’re starting to see things happen slowly but surely,” said Sbiral. “It’s definitely better this year than last year.”