District 207, Des Plaines sign deal on proposed TIF district

Maine Township High School District 207 and the city of Des Plaines have signed an agreement that would allow the school district to get a portion of the revenue from proposed new tax increment financing district near the border of Des Plaines and Rosemont.

Under the agreement, the school district would get a portion of any revenue the new TIF district would generate 10 years after its creation. The agreement was designed to ensure the school district wouldn’t oppose the creation of a new TIF district by sharing the revenue that the schools would otherwise lose completely.

The TIF district hasn’t been created yet. The Des Plaines City Council is expected to hold a public hearing on its creation on Sept. 15, and can vote on whether to actually create it within 60 days of the public hearing.

The new TIF district, known as TIF District 6, would be carved out of larger existing TIF District 6, which is a triangle-shaped district bound by Mannheim Road, Greco Avenue and Higgins Road that was created in 2001. But that TIF failed to spur redevelopment, leaving Des Plaines with an estimated $6.8 million deficit.

As the result, the city wants to cut off the southern section of the TIF, creating a separate, new TIF district. The city has argued that part of the problem with the section was that the lack of the development brought down property values. The city hopes that dividing the area would make it easier for both TIFs to attract development. And since property values within proposed TIF District 7 would start off low, it would be much easier for it to make a profit.

TIF District 7 would be bordered by Touhy Avenue on the north, Mannheim Road on the west, Higgins Road on the south and Metra North Central Service Line tracks in the east. The remaining section of former TIF District 6 located roughly between Mannheim Road, Higgins Road, Willow Creek and Orchard Place would no longer be part of either TIF, returning to the tax rolls.

When a TIF district is created, any taxable increases in property value that would otherwise go to public taxing bodies would go into the TIF. This means that school districts like District 207 would normally find themselves with less tax revenue every time a TIF district is created. That’s what happened when the original TIF District 6 was created.

Under the agreement approved by the District 207 Board of Education, if TIF District 7 is created, the school district would get certain percentage of the tax revenue that goes into a TIF fund. During the first 10 years, the percentage would be zero. From the 11th through 15th years, the schools would get 15 percent. In the 16th through the 20th years, the district would get 25 percent. During the final three years of TIF’s existence, the schools would get 35 percent.

That’s assuming, though, that District 7 would generate revenue. If it remains unprofitable for the entirety of its existence, the schools would get nothing.

If the TIF is created, Des Plaines has agreed not to extend it beyond 23 years. The city also agreed to meet with the school district at least once a year to discuss the projects that take place within the TIF district, how the TIF funds are spent and the general status of the area.

In return, District 207 agreed not to raise any legal objection to TIF District 7’s creation.

In the past, District 207 has made similar agreements with Des Plaines over TIF District 4 and with Park Ridge over the Uptown TIF district.

The District 207 Board of Education unanimously approved the agreement during the Aug. 4 meeting. The Des Plaines City Council approved the agreement the same day.

In the run-up to the vote, Board of Education President Margaret McGrath emphasized that the agreement won’t come into effect unless Des Plaines approves the TIF.

“This actually has to go to [Des Plaines] for approval,” she said. “They’re going to have public hearing in September. Without approval, there is no [agreement].”

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