PAXTON — City officials are expected to take a major step toward implementing Paxton’s first tax increment financing (TIF) district Thursday night, when they plan to publicize a lengthy document outlining how the economic tool would be used to spur growth downtown and near the Interstate 57 interchange.

The Paxton City Council is expected to vote to publish the redevelopment plan during its adjourned meeting at 7 p.m. Thursday at City Hall. The publishing of the plan is among the first steps in a process that could be over by mid-April to implement the TIF district, according to Springfield attorney Dan Schuering, a TIF consultant hired by the city.

Schuering said the redevelopment plan will outline some of the general goals for economic development within the area encompassing the TIF district during its 23-year life cycle. It also outlines an “implementation strategy” for redevelopment and discusses the existing “blighted” conditions in the area that make it eligible for a TIF district, Schuering said.

Once the redevelopment plan is published, it would set in motion a 30-day deadline for a “joint review board” involving representatives of all of the affected taxing bodies to get organized, meet and make a recommendation for the city council to either accept, alter or reject the plan.

A public hearing on the redevelopment plan is expected to be scheduled for March 14, Schuering said. The council would then take action on a series of ordinances to implement the TIF district this spring, likely in April, he said.

Mayor Bill Ingold said the TIF district — first proposed in August 2007 — has been a “long time coming, just because of the size of it and other issues we’ve had.” But Ingold said he is glad the city is finally moving forward on the TIF district, adding that he hopes the city will be able to “have it wrapped up by April or May.”

The earliest date the city expects to adopt ordinances to implement the TIF district is April 9. The latest is June 23, according to a time line provided by Ingold and Schuering.

TIF district to include interstate area, downtown
City officials said the TIF district — a tool intended to spur development in economically depressed areas — will include the downtown, as well as an area around the Interstate 57 interchange, where Rantoul developer Joe Warner is planning a 250-home residential subdivision, a 100-home retirement community, an assisted-living center, and new stores and restaurants.

The TIF district would run along West Ottawa Road, from west of the city-owned airport to Market Street, before heading north into the downtown.

The TIF district would be used by the city to encourage development and improvements to properties within it, Schuering said. Basically, it would create a special “tax allocation fund” that would raise revenue for the city to help reimburse developers and property owners for improving their properties, Schuering said.

The tax allocation fund would be controlled by the city and could also be used by the city for its own eligible projects, he said. Agreements might also be worked out with other taxing bodies so that they, too, could tap into some of those funds.

Schuering explained that the tax allocation fund would generate revenue as property improvements are made and properties are reassessed. The fund would receive all of the property tax revenue collected on a property that is beyond the amount of taxes collected for the property when the TIF district was implemented, Schuering said.

“The idea is to get the special tax allocation fund to grow over time so that you are able to do more and better, larger projects,” Schuering said.

Owners of businesses and homes located on property within the TIF district would be able to apply for grants or loans through the special tax allocation fund by making a proposal to the city council. The council would appoint aldermen to serve on a “TIF Committee” that would be responsible for reviewing proposed projects and advising the full council on which projects to grant funds, Schuering said.

There are some restrictions placed on what projects the funds can be used for, as required by state statute, Schuering said. Among them, the project must be completed on property within the TIF district and be used for a project that helps improve the “blighted” conditions there.

According to Schuering, some examples of permissible uses include the reconstruction of sidewalks and curbs or utility infrastructure improvements; helping pay for a business to acquire land to relocate into the community; helping pay for a store owner to rehabilitate and renovate his or her store; or providing funds for homeowners to renovate their homes.

“All of these things (are eligible), because they all contribute to the viability and the growth of the area,” Schuering said.

PBL schools’ concerns to be addressed
Schuering stressed that taxing bodies in Paxton would not see any reduction in the tax revenue they are receiving today from the parcels of land involved in the TIF district. The only difference, Schuering said, is the taxing bodies — like property owners and developers — may be able to receive some of the money generated by the tax allocation fund.

But some taxing bodies — in particular the Paxton-Buckley-Loda school district — have expressed concerns about the TIF district. Specifically, PBL officials are concerned about being adequately compensated for the number of new students the district might see as a result of the TIF district, according to school board member and spokesman Mike Short.

The PBL district is expecting Warner’s residential development to bring 1.4 students per new household to PBL’s four schools, which have little room to expand to accommodate such growth. The district also may face more costs of hiring teachers, staff and purchasing supplies and materials as a result.

City and school district officials and their attorneys met last week to discuss PBL’s concerns and how to address them through some sort  of agreement.. The mayor called it a “good preliminary meeting,” and Short said PBL officials are “hopeful” an agreement will be reached.

“Both the mayor and Dan Schuering know what the school board’s concerns are,” Short said. “We are just waiting to hear back from them.”

Schuering said the school board’s concerns will not be overlooked.

“The mayor recognizes that this will have an effect on the school district — and on all of the taxing bodies, for that matter,” Schuering said. “There will be continuing discussions about what needs to be done or can be done to help minimize that effect.”

Joint review board to be created
Each taxing body affected by the TIF district will be invited to have representation on a “joint review board” that will be responsible for issuing an “advisory opinion” for the council to consider regarding the redevelopment plan.

Taxing bodies are expected to be sent notices later this week. One member of each of the following taxing bodies, plus a member of the public, will be asked to serve on the joint review board: the PBL school board, the Ford County Board, the Paxton Fire Protection District board, the Paxton Carnegie Library board, the Parkland College board and the Patton Township board. The mayor will be representing the city council on the board.

The joint review board is expected to start meeting by Feb. 24. The board must hold its first meeting no later than 28 days after the redevelopment plan is published, and then will have 30 days to issue an opinion, Schuering said.

Schuering said he expects “some very spirited discussions about these plans and how and why they should be adopted” at the joint review board’s meetings.

“All of the taxing bodies are affected by a TIF,” Schuering noted, “due to having to provide more services for residents who move in.”

For example, Schuering said, the fire district might have to add a firetruck due to address an influx of residents in a new subdivision or due to the construction of a new factory. Likewise, the schools might need to expand due to more residents.

“So it is important that the city council be sensitive to that ... and ensure that even though there’s an impact, that no harm come to the taxing bodies,” Schuering said.

Schuering said the joint review board’s opinion is advisory, but “is something the city council should, and I’m quite certain the city council will, listen to.”

Meanwhile, Schuering said the joint review board will not be “negotiating” the amount of funds each taxing body might receive from the special tax allocation fund. “If there are individual agreements that are entered into with different taxing bodies, that’s a separate matter that will be taken up between the city and the individual taxing bodies,” he said.

Annexation agreements
Besides holding a public hearing for the redevelopment plan, other steps to be taken to implement the TIF district include holding public hearings for “annexation agreements” and adopting ordinances approving the annexation agreements.

The annexation agreements would be negotiated with Warner, the developer whose property is not currently within the corporate limits of the city, Schuering said. Warner has said his proposed commercial development would be included in 80 acres of land he purchased southwest of the Interstate 57 southbound on-ramp, while the residential development would be located on about 120 acres of farmland southeast of the interstate’s northbound offramp.

“The agreement sets forth the ‘terms,’ if you will, of a property owner bringing their property into the city,” Schuering said. “It’s an important step because law requires that all parcels within the redevelopment project area be within the city limits at the time the TIF is implemented.”

City officials continue to negotiate the agreement.

“We’ll get to an agreement with (Warner),” Schuering added. “There’s different approaches to getting this done. We’ve got some issues that we need to address, and he’s got some issues he wants addressed, and we’ll work through them one at a time and we’ll get to an agreement with him.”

A draft of the annexation agreement will be published in the redevelopment plan, Schuering said.

‘TIF implementing ordinances’
On the same day the annexation agreements are expected to be approved — April 9 — the final step to implementing the TIF district will be taken. That will involve the passage of three ordinances that, according to Schuering, “really does one thing: To implement TIF in the community.”

The first ordinance defines the area to include the TIF district; the second ordinance approves the redevelopment plan; and the third ordinance implements the TIF.

TIF committee to advise council on projects
Once the TIF district is implemented, the mayor is expected to appoint aldermen to the TIF Committee that will advise the council on whether to approve requests for projects using special tax allocation funds.

Ingold said he may also at that time set up a workshop for businesses in Paxton that might be interested in taking advantage of TIF funds. At the workshop, business owners could learn what projects are eligible and how to apply.

Already, Ingold has some ideas on how businesses in some of the older buildings downtown might use the funds. Qualified projects might include installing new heating and cooling systems or replacing a roof.

“The TIF Act provides a great deal of flexibility to the city in how it crafts its own programs to create development,” Schuering noted. “The mayor and I have talked at some length about different types of programs for different businesses, that the city wants to encourage to grow their existing facilities or build new facilities here in Paxton.”

There is no limit for the amount of money the city can grant or loan to a business for a project through the special tax allocation fund, Schuering said.

“It’s left to the good judgment of the city council,” he said. “Obviously the mayor and city council are gong to be more aggressive and more generous with those types of facilities  and businesses that they perceive are the most needed in the community.”

Parcel blighting study on file
In preparation for scheduling a public hearing for the redevelopment plan, a “parcel blighting study” was filed for public inspection last week at City Hall. As is legally required, the study must be filed for 10 days before a public hearing can be scheduled for a redevelopment plan.

The study does not require city council approval, but will be part of the redevelopment plan that will need to be approved, Schuering said.

The study contains information and photos showing the conditions of every property in the proposed TIF district. Schuering said the proposed TIF district includes 296 property parcels.

In the study, the condition of each property was assigned a score using guidelines from the Illinois Department of Revenue’s TIF compliance manual from 1989, Schuering said. City officials did a “street survey” in which they looked at and photographed every property for the study, Schuering said.

“And we’ve looked at them more than once,” Schuering said, noting that “it’s really important that we get it right in the first instance.

The study also contains a year-by-year comparison of equalized assessed valuations for each property, Schuering said.

In addition to meeting legal requirements, the study was done, “in part, so that when Mayor Ingold 10 years from now wants to look at what has been the success of TIF in the community, he can go back and look at each and every one of these parcels of property and say, here’s the progress that we’ve made,” Schuering said.

Redevelopment plan
The redevelopment plan summarizes the existing conditions in the redevelopment area as a whole. The redevelopment plan also provides an economic outlook of the entire TIF district and “explains why a particular redevelopment project in the redevelopment project area does or does not qualify under (certain) statutory criteria” for TIF districts, Schuering said.

“In order for the redevelopment project area to be implemented, we have to show that there are five different characteristics that exist throughout the area, not on every parcel, but just throughout the area,” Schuering said.

The redevelopment agreement, in outlining the city’s goals for development, provides general ideas, but nothing too specific about what the city wants to develop on certain properties, Schuering said.

“Are we going to talk about, ‘On Lot A we want Business One built?’ No. We’re going to talk about ‘in the northwest quadrant of the interstate interchange we want to undertake activities which encourage the growth of retail commerce,’” Schuering said as an example.

“How we fill in those blanks (about specific companies or facilities) is an ongoing kind of evolving thing,” Schuering noted, “because, for example, the city does not want to corner itself into saying it wants a McDonald’s over there as opposed to a Wendy’s. It would be whoever shows up first and wants to work the best deal with the city.”

Schuering also pointed out that not all of the city’s ideas for development will be in the redevelopment plan.

“Some ideas will be in the redevelopment plan, and some will not. Some of them are sufficiently developed that we will be talking about some of those in the plan, but some of them are still in the early talking stages,” Schuering said.

Public will be notified
The general public will have plenty of opportunity to provide input and learn more about the TIF district in upcoming weeks, Schuering said.

In February, notices are expected to be sent to residents living within 750 feet of the TIF district’s boundaries, informing them of the public hearing that likely will be held in a special meeting of the city council on Wednesday, March 14.

“We’ve also extended an invitation or kind of an offer to some of the other taxing bodies, saying that we’re more than happy to come to speak to their governing boards to explain to them from their point of view what the effect of the TIF will be,” Schuering said.

“So there’s going to be lots of opportunities for the residents and taxpayers of the community to get additional information and give input.”

The March 14 hearing will be the public’s opportunity to “not only learn but also have their say,” Schuering said.

He encourages residents to attend.

“This is an important decision for the city of Paxton because it will affect the community for the next 23 years,” Schuering said, “and the citizens and taxpayers should be informed and they should express their opinion on what they would like to see happen in their community in the future.”

Misconceptions of TIF districts
City officials stressed that no one’s property taxes will increase as a result of the city implementing a tax increment financing (TIF) district.

“It will not raise anyone’s taxes,” attorney Dan Schuering said. “And it will not create a tax break for people in the TIF. No one should see any difference in their tax bill before or after the implementation of the TIF.”

Schuering also addressed other “common” misconceptions about TIF districts.

First, he explained that TIF districts, unlike what some people may have heard, do not adversely affect senior citizens’ property tax bills.

“It’s a popular misconception that I hear in a lot of places. I don’t totally understand it, but it has no effect (on taxes they pay),” Schuering said. “Senior citizens have the benefit of a number of exemptions (they can claim on their tax bills), and none of that changes. If because of their exemptions their current equalized assessed value is zero, it will be the same after the TIF’s implemented.”

Another common misconception about TIF districts is that people think their property can be somehow taken from their possession.

“We’re not going to take anybody’s property. That’s another popular misconception,” Schuering said. “People believe incorrectly that because within they’re within a TIF district that somehow we have some special power to take their property. That’s not true.”