City Council moves forward with amending TIF III Redevelopment Plan

June 5, 2012 08:37 AM
TIFIII_Redevelopment
 
On Monday, June 4, the Galesburg City Council will consider an ordinance approving the Tax Increment Financing (TIF) District III Amended Redevelopment Plan. Development of the Villas at Carl Sandburg on the former Regency Hotel site, a project undertaken because of the city's valued relationship with Carl Sandburg College, necessitates this action. Providing quality student housing for students at Carl Sandburg College at a proximate location has been a goal of that institution for a number of years. Having that need met will allow Carl Sandburg College, one of our states finest community colleges and a great asset to the community, to continue to thrive in the future. The original TIF III Redevelopment Plan was adopted in 1999. A great deal has changed in this area since that time. The plan adopted in 1999 focused on the redevelopment of the Regency Hotel site and the removal of the former gas station building. This amendment is necessary to update the document so that it better reflects the current project status and project costs. While the hotel project ultimately failed, both the hotel site and gas station site have been cleared allowing for the Villas at Carl Sandburg. The current project is different than originally outlined, but still consistent with the objectives of TIF, which include 1) redeveloping areas, 2) expanding the tax base, and 3) leveraging private investment. While much has changed in this area, one thing has remained the same, and that is but for the assistance of TIF, this area would not be redeveloped. The total equalized assessed valuation for TIF III was $319,330 for the 1999 tax year and $72,390 for the 2012 tax year. Taxing bodies will receive immediate economic benefit from the increase in the EAV between the 2012 and 1999 amounts. It is estimated the EAV will increase following the completion of the Villas project by as much as $2 million. The construction of the Villas will have a larger positive impact on the community than the numbers related to expanding the tax base represent. 
 
A lot of discussion has occurred concerning the procedure followed for considering the amendment to the TIF III Redevelopment Plan. The state statutes provide the process used to approve amendments to a TIF plan. Amending a TIF plan can be a lengthy undertaking and the formal steps of the process can take a number of months to complete. The city has followed all of the steps required by law to amend the TIF III Redevelopment Plan. In this case, because of project financing and scheduling considerations, the City Council approved a redevelopment agreement prior to amending the TIF III Redevelopment Plan. The amendment is necessary to update the project scope and costs. The amendment will not change the duration of the TIF or expand its boundary. The Council approved this agreement after significant discussion and public debate. The staff report to the Council and the agreement itself addressed moving forward to amend the original TIF III Redevelopment Plan. 
 
The process to amend a TIF plan provides for a public hearing and a recommendation from the Joint Review Board. Representatives from the public and the other taxing bodies in the city make up the Joint Review Board. While the recommendation is advisory, the city takes this input and the impact of the use of TIF on other taxing bodies very seriously. The city wants to minimize any potential non-value added impact as much as possible. For instance, the amended TIF III Redevelopment Plan contemplates reimbursement to the school district for certain eligible increased costs resulting from new students (if any) residing in housing units created.  One of the outcomes recognized from this current project is that we need to improve communication with our partners throughout the process of considering and using TIF. We strongly believe that but for the use of TIF in certain instances, property such as this would not be redeveloped, and the community would not benefit, including the expansion of the tax base that will ultimately help all the taxing bodies. TIF, when used appropriately, can accomplish substantial gains for a community and we have experienced that with successful projects including the Kensington, downtown facade improvements and residential loft development, Discovery Depot, redevelopment in the East Main corridor, and numerous public infrastructure projects.
 
By Mayor Salvador Garza
Assisted by Todd Thompson, Roy Parkin and Sue Davidson
 

 

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