Panel considers expanding TIF district to east

August 12, 2008

Edward Husar

Quincy officials are exploring the possibility of expanding the city’s tax increment financing district by adding another 14 blocks to the east.

The City Council’s Finance Committee voted 2-1 Monday to recommend the city hire Teska and Associates of Evanston for $29,000 to conduct an eligibility study and redevelopment plan for the targeted area.

The proposed new TIF district would be situated roughly from Fifth Street to Eighth Street and from York to Broadway. It would encompass 129 private parcels of property.

Properties in this area had a total equalized assessed valuation of about $6.5 million in the 2006 tax year. If that area is declared a TIF district, any increases in the neighborhood’s current tax base over the next 23 years would be placed in a special city account to use for various public infrastructure improvements in the TIF zone.

Chuck Bevelheimer, Quincy’s director of planning and development, said a major need in the targeted area is for improvements to four city-owned parking lots, which have deteriorated over the years. He said various streetscape improvements also would be undertaken with the additional funding.

Bevelheimer said the city currently has no mechanism to improve the parking lots. Creating a TIF, he said, “is the easiest way to finance those improvements.”

Mayor John Spring agreed, saying he feels an expanded TIF district “is the appropriate way to go” to help finance the parking lot improvements.

“I really think this is a great opportunity for us,” Spring said.

Members of the Finance Committee were a little hesitant about the proposal. Bob Klingele, D-3, who served as acting chairman of Monday’s meeting in the absence of Finance Committee Chairman Steve Duesterhaus, said he would “probably” support the proposal, but he’d like to see local businesses pitch in on the parking lot repairs in some manner because the parking lots benefit downtown businesses.

“They should be a partner in this,” Klingele said. “I would like to see them step up to the plate.”

Ken Cantrell, director of administrative services, said many downtown businesses probably couldn’t afford to help pay for the parking lot improvements. “They’re all struggling to keep their doors open,” he said.

Alderman Raymond “Skip” Vahlkamp, D-6, voted against sending the proposal to the full City Council. Vahlkamp said he doesn’t like the idea of using money from the city’s General Fund to finance parking lot improvements, and all TIF revenue collected from property taxes gets deposited initially in the General Fund.

“All you’re doing here with the TIF District is taking it out of the General Fund and making sure it has to be spent in this area,” he said. “I’m not going to vote for it.”

Cantrell noted that the TIF has certain advantages because all of the property assessment increases generated by future development in that neighborhood will go into the city’s TIF fund for local improvements rather than being shared with other local taxing districts that would otherwise command a share of the tax revenue. “We capture it all,” he said.

The existing TIF district, created in 1999, covers about 42 blocks roughly from the river to Fifth Street and from Broadway to Delaware. Bevelheimer said that area currently generates

about $100,000 to $110,000 a year in revenue that’s been used for a wide variety of infrastructure improvements in that part of town.

He said the amount generated by the new TIF would depend on future growth in the targeted 14-block area.

To qualify for the expanded TIF district, the city must first prove to the state’s satisfaction that the area is eligible by meeting certain criteria with regard to the age, physical condition and current usage of each property along with the condition of the infrastructure.

Teska would conduct a detailed inventory of each property as part of an “eligibility field inventory.” The firm would also prepare a redevelopmentplan showing how TIF funds could be used, with parking lot and streetscape improvements expected to receive the bulk of the funding.

Bevelheimer said all property owners will have to be notified and a public hearing will be needed, so he expects to spend an additional $5,000 for mailings, advertising and publications on top of Teska’s $29,000 fee.

Before the TIF could be implemented, the council would have to take steps to remove the Enterprise Zone property tax abatement that’s currently in effect for the 14-block area. However, Bevelheimer said other Enterprise Zone benefits would continue to apply to properties in the TIF, such as a break on sales taxes for materials used to make improvements.