On Monday, November 12th, the elected officials of St. Charles will once again consider the application for the Lexington Club PUD development (a residential development proposed to be located on the site formerly occupied by Applied Composites, bounded roughly by 12th Street on the West, 5th Street on the East, the train tracks on the North, and Dean Street / State Street on the South. For more in-depth information, please see here ). A lynchpin of the proposal is the use of Tax Increment Financing (TIF) funds. TIF is simply a fancy way of saying that they will capture and repurpose property tax revenue from the homes in the development for up to 23 years, and apply those funds to purposes other than for what they are normally used. In the case of the proposed Lexington Club project, at least $3.47M of this future property tax money will flow, not to our cash-strapped local governmental entities, but to the developer, so he can pay off his construction loans.
If you think this proposal sounds like a good idea, then you have the easiest job to do: you should do nothing. Nothing is certainly the easiest thing to do about this proposal, as it is far easier to not speak up or write a letter than it is to take the time to do so. The developer certainly hopes that is what we will all do, because in the absence of any stiff opposition, the City Council may just go ahead and vote to approve this development and its associated TIF funding. If they do go ahead and vote for it, what will the cost to our town be? For starters, we will have moved one more step towards making irrelevant the guidance documents that the City takes time and money to produce (ask the folks upset about the proposed Corporate Reserve project about the importance of sticking to the vision set by those guidance documents), and, maybe most importantly to folks who live away from the impacted neighborhood, the use of the TIF funding mechanism likely means that either your services will go down or your property tax bill will go up, to help pay for this development that precious few people, save the developer, want to see built.
Yes, I will freely acknowledge that this is a better TIF structure than the one used on the previous TIF-funded projects across town. In those projects, the City issued bonds (borrowed money) to help pay for construction, and then hoped that the value of the project would rise enough to create enough property tax payments to pay the debt service on the bond issue. When that has not happened, the City has been forced to eat the cost of the shortfall (which will ultimately show up in all of our property tax bills). In this current scenario, the developer will take out private loans that will be backed by the anticipated future property tax receipts from his development (which he will receive, per the TIF structure). If the development fails to perform, either the developer or the bank will eat the loss, not the City. Whew. Why is that so bad? What do we have to lose? Good thing you asked. The kicker about using TIF funding for residential developments is that while 100% of the school-aged children who live in the development get to attend D303 schools, less than 50% of the money that would normally flow to D303 will do so; D303 will will be faced with new costs, but not enough new revenue to offset those costs. Extra children without sufficient extra funding seems to mean only one of two things: either D303 (the source of about 30% of our property values; one could buy a far nicer home other nearby communities for the same money, but one is then stuck with their schools) takes a hit and cuts services further, or, far more likely, D303 does nothing except make up a budget that reflects the additional costs of the additional children, and leaves it up to the tax people at Kane County to pass those additional costs on to all of us. Yes, that’s right. We will all be volunteered to help pay for a development that has few supporters, via our higher property tax bills. No, it will not be a huge amount of money, but it is the principle of it that matters to me the most.
If this proposal passes, and it is not the result that we wanted, we will all have an outlet to vent our frustration: the ballot box. I imagine that the springtime City Council races will all be made much more interesting when the challengers will have a chance to beat the incumbents over the head about their votes in support of (indirectly) raising our property taxes. That should make for some interesting local politics. However, it will be too late by then, as we will all be stuck footing the bill for the next 23 years.
As I said at the top, if all of this sounds like a good idea to you, then you get the easy job: you get to do nothing. However, if you think this is not the best proposal the City Council has considered, then you need to do something – and soon (like right now, before you get up and walk away from your computer). The cost of doing nothing could very well show up in your property tax bill for the next 23 years. Call your Aldermen. Write your Aldermen. Join the Facebook group “Citizens for Responsible Redevelopment of Applied Composites” to keep yourself in the loop with current developments. Better yet, show up at a public meeting and speak out on the subject (as of now, the next one will be at 7pm on Monday, Nov. 12th at the Municipal Building, 2 E. Main Street). Whatever you do, please do something. We cannot afford the high cost of doing nothing.