East Dundee touts TIF funding as business attractor
By Erin Sauder For Sun-Times Media December 9, 2013 12:18PM
East Dundee officials say tax increment finance districts like the one for the downtown are proving to be a boon for attracting new businesses to the village. | Sun-Times Media file photo
Updated: January 11, 2014 6:10AM
EAST DUNDEE — The village’s tax increment finance districts are proving to be a boon for attracting new businesses to East Dundee, according to its economic development consultant.
“I think that’s probably one of the advantages East Dundee has over surrounding areas,” said consultant Doug Bergren. “We’ve got the wherewithal to help businesses come into town and become established.”
Under tax increment financing, the amount of property tax dollars distributed to the various local taxing bodies from TIF district property owners is frozen. Money collected in property taxes above that amount is used to revitalize the TIF area with infrastructure and other improvements.
Bergren met recently with some individuals who are considering opening up a restaurant in one of the downtown’s vacant storefronts.
“They’re very interested in how the village can help them with the use of TIF and Business Development District funding,” he said.
Because it is still early in the process, Bergren declined to give the name of the restaurant but did say the group has “lots of experience with restaurants on the East Coast.”
Village Administrator Bob Skurla noted that the several TIF districts in the village are located next to each other.
“They all touch; and consequently because they all touch, we can pull from one pool of money,” he said.
This year, Skurla said, the TIF districts are projected to bring in $1.829 million in taxes for district improvements.
Much of that has been committed to previously approved projects such as the upgrades to GAT Guns, a redevelopment agreement to install a water line along Christina Drive running through the Terra Business Park, and renovations to Al Piemonte’s Dundee Chevrolet, among others.
“By and large, our approach to committing to a TIF redevelopment agreement is we like to see the project pay for the amount we’re putting in in a five- to 10-year period,” Skurla said. “If a project (using TIF funds) is going to produce property tax and sales tax, that’s significantly preferable. And even once we get past the break-even period, it’s all found money for the village. We get aggressive with TIF.”
Skurla said sales tax revenues go directly to the general fund.
“We cannot pay for salaries with TIF money, or for moving equipment such as a police car, or for electric and gas bills,” he said. “But with sales tax, we can spend it on anything legally within our budget.”
Recently, East Dundee trustees voted in favor of giving Otto President Tom Roeser more than $400,000 in tax increment finance funds in order to help pay for the renovations to the Anvil Club restaurant, of which he has taken the helm.
The issue was not without some controversy.
The Fox Valley Libertarian Party staged some protests in October, urging residents who disagree with allowing TIF funding for the renovations to call their trustees and let them know.
Skurla said publicity surrounding redevelopment agreements tends to spark interest.
“We get phone calls off of those reports in the paper with people who say, ‘Hey, would you invest in my company?’ and we say, ‘Well, come in and see us to talk about it.’ It generates more people having an interest in the downtown, period,” he said. “Every time we get a redevelopment agreement, the phone rings.”