Tax Incremental Financing Ordinances Pass at 5/9/2022 Board Meeting
Examining ways to redevelop and revitalize the Grand Avenue corridor was identified as a priority by the Village Board and staff through the Village’s strategic planning process. Whether formally or informally, the condition of certain structures along the corridor and perceived lack of vibrancy is one of the most frequent complaints the Village fields on a regular basis. The Village began evaluating options to achieve this goal for well over a year. This work culminated on May 9, 2022 where the Village considered a series of three ordinances which will establish a section of Grand Avenue as a redevelopment project area and institute tax increment financing as a means to reinvest in and revitalize the corridor.
The Village selected Teska Associates to conduct a tax increment finance (TIF) study for Grand Avenue in September of 2020. The purpose of the study was to determine if the required, statutorily-defined standards for utilizing TIF were present along the corridor. The findings of that study would then be presented at a later date. After an update provided by Teska on December 14, 2020, the Village Board provided consensus regarding the general boundaries of the TIF district which provided direction to staff of the precise area to analyze as part of the eligibility study. This Project Area or “Project” is defined as the 126.6 acre area between Deep Lake Road and Village Hall along Grand Avenue. The Project Area contains 110 parcels and 78 buildings in total.
A major milestone was reached when the eligibility study was provided by Teska about two months later on February 22nd. An eligibility study is determining if defined characteristics indicating why the proposed area may not be meeting its full development potential exist. Such characteristics include factors like obsolete platting of vacant land, tax delinquency, deterioration of structures, diminishing Equalized Assessed Value (EAV), excessive vacancies, building obsolescence, code violations, lack of community planning, and/or environmental remediation. The report from Teska indicated that the Grand Avenue corridor is eligible for TIF designation by meeting the State’s definition of a conservation area. A “conservation area” must not only exhibit three of the characteristics such as those mentioned earlier, but more than 50% of the proposed area’s structures must be thirty-five (35) years or older. First, Teska’s study determined that 78% of the structures within the proposed Project Area were greater than 35 years old. The study also identified the presence and prevalence of following characteristics along Grand Avenue: dilapidation, deterioration, excessive vacancy, obsolescence, and decline in EAV. While the report provides photos and explanations of the condition of many structures within the Grand Avenue corridor, the most telling of the eligibility factors is the decline in the project area’s EAV. To meet eligibility standards, the project area’s EAV must decline or have “minimal marginal increase.” Usually the latter is defined as an EAV for the project area that increases at a slower rate than the rest of the community or the Consumer Price Index over a five year period. However in our case, the project area’s EAV has declined by 1.8% between tax year 2016 and 2021, while the remainder of the Village’s EAV has increased by about 15% in the same time period.
At that same Village Board meeting on February 22nd, the Village Board accepted the eligibility report and authorized the completion of the redevelopment plan, the next milestone in establishing a tax increment finance district. The approval of the eligibility study catapulted staff to launch an informational page on the website about TIF broadly and our project in March 2021. This page included the eligibility study, links to the state TIF statute, FAQs about TIF districts, and a suggestion area, to name a few features. The Village also included information about the TIF in its Village newsletters of November/December 2020, January/February 2021, and March/April 2021.
While the Village Board took a strategic pause in the spring/summer of 2021 to determine the direction for aesthetic improvements and future land uses along the corridor, work was being conducted on the redevelopment plan. In July 2021, the Village Board in consultation with Teska and the Plan Commission developed a set of broad, aspirational improvements to help bring vitality to the corridor. This included landscaping improvements, redevelopment of Slove Park, possibilities for development, and the addition of non-vehicular amenities.
On December 2nd, 2021, the Village sent mailers out to all property owners within the proposed TIF district regarding a town hall meeting to occur at Village Hall. In that meeting, the Village would present information about the Grand Avenue Corridor TIF and answer any questions. This meeting occurred prior to a Village Board meeting on December 13th. Interested parties were able to participate virtually or in-person. That same evening, at the regular Village Board meeting, the trustees implemented the TIF interested parties registry – the persons or companies who wished to receive specific notices regarding the TIF meetings.
Some milestones which occurred in the TIF approval process include:
The Village Board set the public hearing for the TIF at the January 24th regular meeting for March 21st. This “started the statutory clock” on getting the Grand Avenue TIF approved.
Notice to taxing bodies for the Joint Review Board meeting went out on February 4th.
Notice to residents regarding the public hearing and other TIF information went out to residents within 750 feet of the district on February 18th.
The Joint Review Board meeting occurred which included representatives of all overlapping taxing bodies on March 1, 2022. The Joint Review Board voted 8-0 to recommend implementation of a TIF along Grand Avenue to the Village Board. The representative of Grayslake CHSD #127 abstained.
Notices of the public hearing for the TIF appeared in the Daily Herald twice – one on February 28, 2022 and the second on March 7, 2022.
The Village conducted the public hearing regarding the TIF at a special meeting on March 21, 2022.
The final step in the TIF adoption process was to consider three ordinances implementing the Grand Avenue TIF no less than 14 days, but no greater than 90 days after the public hearing. May 9, 2022 is almost squarely in the middle of those parameters.
Setting out exclusively to establish a TIF was not the Village’s overall approach. The Village discussed other options for redevelopment with Teska during this process, but it was determined that other redevelopment mechanisms would not provide the amount of funding impact required to make need and substantial change along the corridor. Nor did the Village ever want to stretch the bounds of eligibility when it came to a TIF. If we were going to commit to this as an organization we wanted all claims in doing so to be easily apparent and legitimate. And while TIF will not be a panacea to cure all the ills of the current conditions of the corridor, it does boost our ability to compete with other jurisdictions that may have other development advantages which Lindenhurst may be unable to replicate.
The ordinances presented 5/9/2022, and approved, handle three different aspects of establishing the Grand Avenue Tax Increment Financing District Redevelopment Project Area and must be considered in this order:
Item B: Ordinance 22-5-2233: Approving a Redevelopment Plan and Project for the Grand Avenue District Redevelopment Project Area – This ordinance adopts the Redevelopment Plan and Project as proposed by Teska Associates. This is the same redevelopment plan that was discussed at the March 21, 2022 public hearing.
Item C: Ordinance 22-5-2234: Designating the Grand Avenue District Redevelopment Project Area Pursuant to the Tax Increment Allocation Redevelopment Act – As the name suggests, this ordnance establishes the official boundaries of the TIF District.
Item D: Ordinance 22-5-2235: Adopting Tax Increment Allocation Financing for the Grand Avenue District Redevelopment Project Area – The final ordinance establishes that tax increment financing is the mechanism which will assist in the redevelopment of the previously defined area. This allows the incremental taxes which arise from the value of improvements within the corridor to be transferred to the Village for statutorily-defined uses within the corridor and in accordance with our redevelopment plan.
Tax Incremental Financing (TIF) - Additional Information
The Village strives to be responsive to its residents, and the Grand Avenue business district has long been a source of concern to residents, as well as the Village. After listening sessions with residents and community stakeholders, the Village Board prioritized the redevelopment of Grand Avenue as a goal of the Village’s Strategic Plan. To revitalize the Grand Avenue corridor, the Village of Lindenhurst took the necessary steps to designate much of this area as a Tax Incremental Financing (TIF) district. The Village believes that without this redevelopment tool, opportunity and vitality much needed in this particular area may not occur. With the TIF, we endeavor to redevelop the Grand Avenue business corridor into a modern, more appealing commercial district.
Tax Incremental Financing (TIF) helps local governments attract private development and new businesses. New businesses mean more jobs, more customers, and, in turn, more private investment. TIF designation also helps retain existing businesses that might otherwise find more attractive options elsewhere. The jobs and additional investment --- private and public --- mean more money for the community. TIF also helps to overcome the extraordinary costs that often prevent development and private investment from occurring on environmentally contaminated and other properties, and it’s also used where infrastructure is inadequate or there is obsolete development. As a result, the TIF area itself improves and property values go up.
Since the Federal and State governments have greatly reduced their support for economic development, Tax Increment Financing permits municipalities to accept some of this responsibility without raising local property taxes.
Without TIF benefits, a deteriorating area will not improve. Businesses do not sink capital into decaying areas and most local governments cannot afford the needed costly improvements without raising taxes. But in a TIF district, dollars for improvements are generated by businesses --- new and old --- attracted by the TIF benefits. Specifically, money for infrastructure improvements and other incentives comes from the growth in property tax revenues --- the tax increment.
Click here to view the Proposed TIF Map, and the Grand Avenue TIF Redevelopment Plan and Eligibility Study can be found here. Please complete this form to leave your valuable Feedback.
Additionally, the Village Hall is compiling a TIF Interested Parties List. Any individual or organization wishing to receive notices related to the formation of the Grand Avenue TIF District, please sign-up at Village Hall, 2301 E Sand Lake Rd. The Village will require:
Individuals- must complete the form along with proof of residency – e.g., driver’s license, lease, utility bill, bank statement.
Organizations- form completion, and just have to provide a description of activities in the community.
Typical TIF Projects
TIF funds may be used for costs associated with the development or redevelopment of property within the TIF, allowing blighted, declining and underperforming areas to again become viable, and allowing these areas to compete with vacant land at the edge of urban areas. Typical projects include:
Redevelopment of substandard, obsolete, or vacant buildings
Financing general public infrastructure improvements, including streets, sewer, water, and the like, in declining areas
Cleaning up polluted areas
Improving the viability of downtown business districts
Providing infrastructure needed to develop a site for new industrial or commercial use