City required to pay $750,000 back to downtown developers
WHEATON – The construction of a large downtown office and retail complex, already involving millions of dollars in incentives, got a little pricier after it was determined the city would return $750,000 in property taxes to the developers.
The complex in question, at 120 E. Liberty Drive, houses First Trust Portfolios and has long been the center of tax payment controversy. The developer, Wheaton Property Partners, has been appealing the building's $25 million appraisal and associated property taxes every year since the space opened in 2008.
However, the firm said that much of the building's value was lost when the recession began and argued for an $11 million valuation. The city countered with $18 million before finally settling on $15 million. Although the developer dropped the 2008 appeal, the firm eventually pushed the case to the State Board of of Review, where the board ruled in its favor in February of this year.
That translates to roughly $750,000 – $250,000 a year for 2009 through 2011 – to be paid back in the form of a reduction on the County Treasurer's yearly distribution. The city had previously paid $8.4 million in incentives for the development.
"We were giving incentives to get a class A office building on the property after purchasing the property for $1 million," said Wheaton City Manager Don Rose.
These incentives included $6 million of the $6.2 million needed to build a parking deck south of the building and an additional $1.4 million to purchase another pair of land parcels for the project, according to Rose.
The city incentivized development in the area because it was an unused TIF district, meaning that the property had to be put into use before the city received additional TIF funds.
"The difficulty for us on a larger scale is that we were projecting 'x' amount of money coming from that project," said Rose. "Over the remaining life of the TIF until 2021, it means about $2 million less in total revenue."