Three redevelopment agreements approved by Paxton aldermen

PAXTON — During a 45-minute meeting last Tuesday, members of the Paxton City Council’s economic development committee heard details of three redevelopment agreements for properties in the city’s tax-increment financing (TIF) district.

The committee also discussed ongoing frustrations over the existing equalized assessed values of properties both inside and outside the TIF district.

The committee’s chairman, Alderman Susan Satterlee, called on the city’s TIF consultant, Dan Schuering of Springfield, to explain the terms of the three agreements, which were approved later that night by the full council.

Shields Automart agreement
Schuering said negotiations with Shields Automart began in 2014. He said that “without going into all the twists and turns of negotiation,” the final agreement ended up being the same as the first offer the city had made to the dealership’s owners.

The agreement calls for the city to reimburse TIF-eligible expenditures for improvements made to the dealership’s exterior at Interstate 57 and Illinois 9. The amount available for reimbursement would be 50 percent of any increase in property taxes generated by any increase in assessed value to properties in the TIF district during the remaining 18-year lifespan of the TIF district.

Schuering said the reimbursement amount would not equal the expenses for improvements, reported to be $600,000. He emphasized that the agreement does not put the city “on the hook” to pay a set amount, because the agreement involves “strictly a percentage” of any tax increase realized.

Schuering praised the agreement as a smart use of TIF money to sustain a business that brings in “a lot of sales tax” and to encourage long-term growth in the area.

Agreement for NexStep building
Schuering said “there has been some difficulty” in figuring out an exact dollar amount of  improvements put into the NexStep Commercial Products building located on Illinois 9 near the city’s west edge. He is confident, however, that a local bank “has put approximately $3 million into the property.”

However, Schuering said the redevelopment agreement with the building’s owner, Duane Shields, is capped at $600,000 for reimbursement. The agreement also calls for reimbursements to be made by using 50 percent of any tax increase generated by properties in the TIF district over the remaining life of the TIF district.

Schuering pointed out that the building’s remodeling was necessitated by business growth, meaning more jobs and commerce for the city.

Paxton Packaging agreement
The third agreement for consideration is what Schuering termed an “interim agreement” with Paxton Packing LLC, a beef-jerky manufacturer. The agreement calls for the city to reimburse the company a set amount of $25,000 for improvements to its building at the northeast corner of State and Taft streets.

Funding for the $25,000 reimbursement will come from 50 percent of any property tax increases generated by improvements to the building. Payments would be made on an annual basis.

At the council’s Dec. 12 meeting, the business’ co-owner, Glen Kirby, told council members of the owners’ vision to bring the building, widely considered to be an eyesore, to what it would have looked like 100 years ago. Kirby said exterior improvements will include repainting, tuckpointing and replacing windows.

Kirby also previously said that the owners had already put $40,000 to $50,000 into interior improvements to reach food-safety certification requirements for packaging beef jerky.

Alderman Rob Pacey questioned some wording in the agreement, noting the company is licensed to do business in North Carolina. Schuering said there is wording requiring the company to be licensed in Illinois within the agreement.

Assessment concerns
Satterlee asked Schuering if he had talked yet with Ford County’s supervisor of assessments, Patricia Langland, about the council’s concerns over what it believes are low assessments assigned to properties in the TIF district.

Schuering said he was taking a different approach by getting facts from other sources, including assessments of buildings in other communities.

Schuering said he expects some assessments will have to be contested at the Ford County Board of Review’s next meeting in February. Schuering added that he believes “one property is grossly undervalued by a factor of three — and (correcting) just that one would make a tremendous difference.”

Schuering went on to say that “undervalued property is probably not isolated just to the TIF.” He explained that undervaluing properties not only hurts monies available for TIF reimbursements but also puts an added tax burden on other properties that are not undervalued.

Because a taxing body’s tax levy is divided by its total equalized assessed valuation (EAV) to determine the tax rate, Schuering said a significant enough increase in EAV can “drive the whole tax bill down.”

Alderman Eric Evans asked if council members should ask to speak with Ford County Board members about the issues, adding that the city doesn’t seem to be the only one with complaints about assessments.

Alderman Rob Pacey replied that his personal opinion would be that the county has few options, since it has a five-year employment contract with Langland.

Schuering said a fair share of the tax burden cannot be figured for each property “if someone has their thumb on the scale.”

TIF progress
Schuering said a review of the status of the city’s TIF district is on track to be presented to the council in March. He said his current prediction is that by 2020, the council will see “some real money available” for redevelopment agreements.

Marketing efforts are currently directed at businesses that would be compatible with the Cobblestone Hotel & Suites east of I-57, such as food and fuel. Schuering said his group is currently doing a fuel-demand study.

Schuering said that recent discussions with the Glazik family — owners of undeveloped property on the TIF district’s west side — indicated they are not interested in a truckstop-type use of their property. He said that use would be unlikely anyway, due to Paxton’s location between two nearby, well-established truck stops at Gilman to the north and North Market Street in Champaign to the south.

Schuering reminded council members that the Cobblestone Hotel project developed “crazy fast,” and they should not expect that to be repeated.

“We have to pan a lot of dirt to get a few nuggets of gold,” Schuering said.

However, Schuering said the project could be considered ahead of schedule since it already had received a call back. Mayor Bill Ingold said discussions are kept quiet “not to be cute or coy” but to protect a prospect’s identity in the early stages because “too much out there too soon, and they will drop us.”

Pacey asked if there would be any benefit in talking with the Warner family about the sale of their property, located on the east side of I-57.

“If there is any change in their position, their attorney would reach out to us,” Schuering said.

Schuering feels the city has made a reasonable offer based on the land’s value, but an estate is involved now and problems with Warner developments near I-57 near Rantoul are also “complicating things.”

Downtown redevelopment
Schuering said he is still anxious to have conversations with civic organizations to get the downtown facade grant program coordinated with the TIF program to get more improvements to downtown businesses. He said he believes that a “me too” feeling will spur more improvement, as business owners will want their property to be as nice as their neighbors’.

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