Komarek School is going to get a substantial cash influx next year because the tax increment financing district (TIF) for the Broadview Village Square Mall on Cermak Road is finally coming to an end.
The end of the TIF will result in somewhere between $500,000 and $700,000 in additional revenue for the district.
It’s also the primary reason why Komarek School District 94 is asking for a nearly 21-percent increase in its annual tax levy, which will be voted on after a public hearing at the Dec. 12 meeting of the district’s board of education.
“The biggest reason for that increase is that the Broadview Village Square TIF has ended and we need to capture this growth,” said Kathy Gibson the business coordinator for Komarek School District 94. “We don’t want to miss out on anything after waiting 23 years.”
For tax year 2016, Komarek levied $4,723,754. This year, it is asking for nearly a million dollars more, $5,714,852, although Komarek officials know that they will not get all that they ask for.
In the arcane world of school and municipal property tax system, school boards and village boards routinely approve levies that they know will ultimately be reduced.
Under property tax cap laws increases to the property tax extension are limited to the consumer price index, which was 2.1 percent last year, or 5 percent whichever is less, plus the value of new property added to the tax rolls.
The value of new property will not be finally determined until next spring, so taxing bodies routinely ask for the more than they will ultimately receive, because if they ask for less than they are entitled to they cannot go back and add that value to their tax rolls.
Gibson estimated that the district’s property tax base will increase by about $17.1 million. In addition to the entire value of the Broadview Village Square Mall coming on to the tax rolls, Pure Foods has built a new warehouse and the Aldi store on Cermak Road has expanded, as has the Replogle Globes Inc.
“We have a lot of new growth we want to capture,” Gibson said. “We’re not saying we’re going to get 20 percent. We do not want to leave any money laying on the table.”
Gibson estimated that, when all is said and done, the district’s tax extension will increase by about 14 to 15 percent.
That does not mean that homeowners will see that sort of the tax increase. Most of the increase in tax revenue will come from fully taxing the Broadview Square Mall, which includes a Target and Home Depot, and taxing other new or expanded commercial and industrial property.
“The residents themselves are not going to see a 15 percent increase overall,” Gibson said.
Gibson estimated that the owner of a home worth $200,000 might see a $70 to $75 annual tax increase.
Property taxes are frozen during the 23-year life of a TIF district, so money that would otherwise have gone to schools or municipalities may be used for development related purposes, such as improving infrastructure, assembling land or providing incentives for development.
The Broadview Village Square TIF was established in 1993 on the site where an International Harvester plant once stood. The mall itself opened in 1994.
The value of the property of the Village Square Mall has increased from about $6 million when the TIF was created when the land was vacant to about $33.5, Gibson said. About 67 percent of the mall falls within in the Komarek School District.
Komarek officials, who have been scraping by without meaningful cash reserves for years, say that they are happy that the TIF has finally come to an end.
“This is something that we’ve been waiting for, for 23 years,” Gibson said.
Komarek Superintendent Brian Ganan said the additional revenue from the mall will come in handy after years of raiding the working cash fund to cover basic expenses. He said that the revenue will allow the district to rebuild its cash reserves.
“We won’t have to transfer money like we’ve had to before to make sure all of our salaries were covered,” Ganan said. “This money will hopefully allow us to build up some reserves.”