Brookfield will likely have its third tax increment financing (TIF) district sometime around May 2016, and it’ll be centered on the Eight Corners business district.
Last month, Kane McKenna & Associates, the consultant hired by the village to investigate the possibility of creating a TIF district in that area, delivered its TIF Eligibility Report — which determined that Eight Corners would make a strong TIF candidate.
“It’s a unique opportunity to jumpstart growth in a focused, targeted area,” said Nicholas Greifer, the village’s community and economic development director during a meeting of the village board’s Planning, Zoning and Economic Development Committee on Oct. 26.
“This area strongly qualifies [for designation],” he added.
A TIF district is a tool municipalities use to spur commercial redevelopment in areas that might otherwise continue to decline due to blighted conditions, obsolete properties and buildings and inadequate infrastructure, among other things.
Tax assessment levels within a TIF are frozen for 23 years for the purposes of what they contribute to the general property tax levy each year. But as property is developed and they are reassessed, any incremental tax revenue generated is held in a special fund that can only be used within the TIF for things like property acquisition, infrastructure improvements and incentives for additional development.
When the 23-year period is over, the taxes collected due to the increased assessments within the TIF district are disbursed to all of the taxing bodies where the TIF is located. In the case of Eight Corners, those taxing bodies would include Riverside-Brookfield High School, Brookfield-LaGrange Park School District 95, the village of Brookfield, Proviso Township, Triton College and Cook County.
Brookfield will need to have the support of those taxing bodies to create the TIF, since tax revenue to those agencies from the TIF area will be frozen at the baseline assessment level for 23 years.
Typically, taxing bodies agree to support the creation of TIFs, believing the long-term payoff will be greater than possible short-term revenue increases.
That was the thinking by other taxing bodies when Brookfield created its two TIF districts along Ogden Avenue in 2008 and 2011. Both were created as the national real estate market tanked and, as a result, have generated little in the way of incremental tax revenue within the TIF districts.
But that could be changing now that there have been two significant developments on Ogden Avenue in the past couple of years.
The boundaries of the Eight Corners TIF District include the entire 9100 block of Broadway Avenue, the entire north side of the 9200 block of Broadway Avenue and the south side commercial area east of S.E. Gross Middle School.
It also includes both sides of the 3400 block of Maple Avenue, excluding the Brookfield Bowl parking lot and the multi-unit building on the southwest corner of Maple and Monroe.
Also included is the large parcel of undeveloped property owned by the Methodist Church in the 3400 block of Grand Boulevard and sections of the 3500 blocks of Grand Boulevard and Maple Avenue, including a handful of residential properties.
The TIF Eligibility Report submitted by Kane McKenna argues that, “‘but for’ the use of the TIF,” Eight Corners “is in danger of declining toward blighted condition.”
Of the 13 possible criteria qualifying for TIF status (an area only needs to meet three of the criteria), the Eight Corners area met six factors.
Chief among those criteria was the steady decline in commercial property assessments during the past five years. The equalized assessed value (EAV) of properties in the proposed TIF area has fallen from about $11.5 million in 2009 to $7.8 million in 2014, a decline of 32 percent.
The TIF Eligibility Report also called out the obsolescence of properties, the lack of a comprehensive plan when the district was developed and subdivided, the age of the structures in the area, the physical decline of properties, problems with incompatible land uses within and immediately adjacent to the proposed TIF area and inadequate utilities such as sewers and water mains, which are 75 years old and “reaching the end of their useful life.”
Brookfield paid Kane McKenna about $10,000 to prepare the TIF Eligibility Report. In December or early January, the board is expected to name a date for a public hearing and vote to hire Kane McKenna to prepare a TIF plan and convene a Joint Review Board.
That will start the clock on the creation of the TIF, a process that will take about four months.
“It’ll probably be December or January to get the authority to move forward,” Greifer said. “The adoption of a new TIF ordinance would not take place until May at the earliest.”