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Public hearing for downtown Elmhurst TIF sees mixed reactions

Elmhurst resident Claude Pagacz remarks on the proposed TIF for downtown Elmhurst during public comment at the March 5 Elmhurst City Council meeting.
Elmhurst resident Claude Pagacz remarks on the proposed TIF for downtown Elmhurst during public comment at the March 5 Elmhurst City Council meeting.

ELMHURST – The city of Elmhurst held a public hearing March 5 regarding the proposed downtown tax increment financing district.

The current downtown TIF, which was created in 1986, is set to expire in 2021. The plan is to end the current TIF early and put in a TIF with fewer properties but including some publicly owned properties, such as the Elmhurst Public Library and Wilder Park, so they can partner with the city on redevelopment and improvements to their properties, City Manager Jim Grabowski said at the Dec. 18, 2017, Elmhurst City Council meeting.

Robert Rychlicki, executive vice president at financial services firm Kane, McKenna and Associates, which specializes in municipal economic development, presented on the plans and context for the TIF at the March 5 meeting.

Revenues from the TIF, which is essentially a financing plan, are directly associated with increases in the equalized assessed valuation over the base amount set by the DuPage County Clerk's Office, Rychlicki said.

The downtown Elmhurst area that would be included in the TIF is deemed to be a "conservation area" because more than 85 percent of the buildings are at least 35 years old. After passing the conservation area threshold, the city needed to prove at least five of 13 factors were present. The five qualification factors identified are obsolescence, deterioration, inadequate utilities, deleterious layout and lagging/declining equalized assessed valuation.

Obsolescence has to do with the age of the buildings in the area, and about 40 percent of the parcels in the area were found to be deteriorated. City staff also found water and sanitary systems and sewers were old and needed improvements.

Deleterious layout primarily relates to area accessibility and parking, partly determined by traffic studies and the city's downtown plan. Equalized assessed valuation also was an issue.

Upon completion of the private development of the proposed new TIF area over a 23-year period, the city estimates the equalized assessed value of the property within the area will be within a range of $75 million to $95 million, according to a report prepared by Kane, McKenna and Associates.

The public hearing brought out some mixed reactions among residents and stakeholders.

Elmhurst resident Chris LaBounty, a member of the Elmhurst Economic Development Commission and a principal of May Real Estate LLC in Oak Brook, said the commission unanimously endorsed the downtown TIF plan at its Feb. 23 meeting.

He said the primary reasons for that endorsement are that TIF 1, the current TIF, has helped make businesses there successful, businesses' success helps sustain a needed "vibrant" downtown area, success in downtown Elmhurst helps economic development throughout the city and TIFs in Elmhurst have been administered "very successfully."

Elmhurst resident Claude Pagacz spoke against the TIF, expressing concerns over potential redevelopments and renovations to buildings, as well as his belief there would be expenses for residents.

City Manager Jim Grabowski said in a phone interview March 8 there will be "no negative effect" on residents. There will be no additional taxes or fees on businessess or residents, he said.

"It's solely an incentive-based program for the city to use for economic development," he said.

He added a few developers are aware of the TIF plan for downtown Elmhurst.

"The sooner we can put it in place, the sooner we can move forward with these developments," he said.

The city of Elmhurst now has 14 to 90 days after the public hearing to introduce and consider TIF ordinances, according to state law. The City Council could take action as soon as its next meeting March 19, Grabowski said.

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