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Trustees Hear Potential New Downtown TIF Plans

Consultants propose ideas for renewed development strategy by reporting on financial and market conditions, current planning and zoning, and bond structure in tax increment financing district.

At the start of 2011, the after former developer Equity Services Group was unable to come up with financing for the project.

Since that time, the village hired three consultants to work in concert to form a new strategy to breathe life back into the downtown tax increment-financing district. 

On Monday night, a first draft review of their findings was presented to the Village Board.

Representatives of Teska Associates Inc., Business Districts Inc., and Kane, McKenna & Associates Inc., pointed out weaknesses in the previous plan, and offered suggestions on how the village can move a future project forward.  

“The current market conditions wouldn’t allow the (previously proposed) project to work today,” said Lee Brown, president of Teska Associates. “The development as planned would be unlikely.”

Issues with the plan included the amount of parking set aside for a potential new development.

Brown said the parking requirements in the previous development plan would reduce the amount of usable building space that could be built, which would in turn decrease the amount of tax increment generated in the TIF district.  

“Based on the parking standard set, you would need below-grade parking and that would raise the price to the point that people wouldn’t pay for it,” Brown said.

He added that more households would be needed in the village to support the amount of retail space that previously had been proposed for the waterfront.

“The waterfront is most attractive for a residential use, not retail as proposed in the former plan,” Brown said. “The retail should be focused at a main intersection where it can be supported.”

Mary Thompson, senior vice president at Kane, McKenna and Associates, said, "There is a growing market for luxury rentals and such units would bring in the equity needed to support the TIF district."

Thompson said the entire plan should take more of a "project orientation" than a block plan.

The plan proposed by ESG segmented the redevelopment area into a number of different "blocks," wherein each was to be developed according to where they were located within the TIF district.

Thompson suggested the village be realistic about specialty dining and boutique businesses by limiting how many would be permitted within the redevelopment area.

“If you allow too many, other businesses in the village will close,” Thompson said.

Thompson said the village should encourage property owners in the TIF district to reinvest in their homes, which ultimately could be utilized for entrepreneurs in the future as vintage business dwellings.  

Consultants also addressed the , which has been a looming discussion.

Bob Rychlicki, executive vice president of Kane, McKenna and Associates, suggested a number of moves to restructure TIF debt to ensure payments could be made without putting an additional property tax burden on residents.

In a worst-case scenario, a homeowner with a home valued at $350,000 could see an increase of $60 per year on his or her tax bill, but proposed steps could avoid that altogether, said Finance Director Al Zochowski.

Among Rychlicki’s suggestions is to negotiate with the school district to decrease student payments by 50 percent for the per capita tuition costs.

“TIFs do allow for school districts to waive or modify payments,” said Rychlicki.

Village Administrator Bob Vitas said negotiations already have begun with school district administration regarding a temporary decrease in payments until the TIF district is on more solid ground.

Other moves that could be made included placing properties with a negative TIF increment equalized assessed valuation into a separate tax code.

Talks have begun between the village and the Lake County Clerk’s Office to see if that can happen, Vitas said.

Extending the life of the TIF district by 12 years — the maximum allowed by state statute —also was discussed.

“It would be an act of the state legislature to extend the TIF; you would have to gain the support of all of the taxing districts and get sponsors in the Illinois House and Senate,” Brown said. “It could take between three and 12 months.”

The affected taxing districts include Lake County, the Lake County Forest Preserve District, College of Lake County, , , and the .

Though a number of positive and potential steps were proposed, the road ahead is still a long one.

“It will take 18 months from when a developer comes in to get through the review process and another year before revenues come into the TIF,” said Bridget Wade of Business Districts Inc. “There is a bleak, short-term outlook because revenue isn’t going to flow until at least 2014.”

“With trustee input, we will consider reshaping regulatory requirements; we already have started meetings to bring about some of the recommendations,” Vitas said.

Vitas added that meetings are planned with a potential developer for a luxury rental project, in addition to a commercial development, all located in the TIF district.

In the meantime, a study session with the consultants to delve further into their recommendations also will be planned.

“We are looking at your current situation and going forward to set the village in the position to take a downtown plan to fruition,” Brown said.

The Joint TIF Review Board is set to meet at 3 p.m. Nov. 9 at Village Hall.

Say it isn't so November 08, 2011 at 01:14 PM
I dont know where to start!! If the school cave in THEY will have bigger problems.... All these consultants have one thing in common, their principles are probably ex muni officials that lost their jobs. So if the tax payers are going to pay they let them opine. Once again, Business will not come here because of the anti business enviroment of Lake Zurich, from the police to Village Hall---- cut your permit fees, streamline your building codes, reduce your tap on fees and just plain make it easier......
Resident Observer November 08, 2011 at 04:52 PM
People should review the "Scenarios" very carefully. The taxpayers already pay almost $500k a year on those Refunding Bonds just to kick the can down the road and that scheme will grow to almost $900k by 2021. Now the consultants are proposing another $450k onto the taxpayers starting in 2012 and eventually tapering off to $75k by 2020. This is all in addition to the School Board deal that may or may not happen. Maybe we should ask ourselves the question: "Ten years ago, whose idea was it for the Village, with no real expertise or experience, to go into the real estate market gobbling up and then trying to sell distressed properties? What were they thinking!" At least last night it looked like a couple of Board members actually read the consultant materials in their packets and asked important questions about how all this impacts us taxpayers. And then there are others......
Janice November 08, 2011 at 08:51 PM
I have lived in the downtown area for 15 years, and have been promised a thriving downtown since the day I moved in. We have never had a Village board with any vision towards what a successful downtown includes. Destinations like Lake Geneva, Arlington Heights, Crystal Lake, and Long Grove all have wonderful downtowns. It's not to hard to imagine what would work. Local businesses like Egg Shells, DJ Bistro, and JJ Twiggs are a few thatcome to mind in a downtown setting. Eyesores that currently exist need to be leveled and new buildings need to go up. We can not rehab by putting lipstick on a pig. The three story townhouse disaster represents what won't work......high priced residential housing. The newest developer, Lee Brown from Teska, is ready to make the same mistake yet again. The lake is private. No more boats are allowed. People will not pay a premium for a lake location when they CAN NOT gain lake access!!! Why is this a newsflash to every potential LZ developer? People want coffee shops, cupcake shops, icecream, great eating, not expensive housing.
Honest Voter November 08, 2011 at 09:16 PM
Before you cast your stones I suggest you you do the research and get all of the information. Based upon what you are calling a success Lake Geneva, Arlington Heights Crystal Lake and Long Grove you do not get it either? So simple?
Say it isn't so November 08, 2011 at 09:34 PM
I was at at Village Board meeting in Lombard about six months ago and Arlington Heights was used as an example of what not to do...... Their condo's have $10,000 tax bills and their maintance fees are in excess of $400 PER MONTH - The only good example I can think of is Naperville.......
TheJET November 08, 2011 at 11:44 PM
Unfortunately, the meeting was not broadcast over the net. It was a meeting that every resident should see. The presentation and the supporting documents were informative, if only to lay out facts & prove out everyone's worst fears. Many "successful" TIF's are really money pits. This has been the $60-70 per year on your tax bills for three years and it will get worse before it gets better. Yet we have nothing but debt. The consultants are the best spent money to date only because they are telling us the truth - that which nobody wants to hear. Whether that continues is another issue. A separate issue is if anyone can deal with the truth.

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