The DeKalb City Council approved the formation of a TIF district on South Fourth Street in a 6-1 vote.
A TIF district pools tax money for economic development projects in a designated area by diverting tax dollars from taxing bodies such as the school and park districts.
The newly designated TIF district falls under the Fourth and Fifth wards.
Fourth Ward Alderman Greg Perkins said he’s been a huge advocate for the designation.
“We need some type of a tool to spur development on that side of town,” he said. “We've used the tool effectively at other areas in town. I think using those and the processes that were in place to support those TIFs, I think are an indicator, hopefully, of future success with it.”
Examples of TIF-funded projects include nearly four million dollars for luxury apartments near downtown –City Hall Suites LLC and Agora Tower, and $468,282 dollars to Sun Dog IT, an IT services company owned by Mayor Cohen Barnes, according to annual tax increment finance reporting from fiscal year 2022 and 2023.
The newly formed TIF District runs on South Fourth Street from Taylor Street and buffers I-88.
A map included in the Dec. 9 city council meeting agenda packet includes the street names and the list of tax payers whose properties encompass the newly formed TIF district.
These are details not provided in previous iterations of the TIF district, even as WNIJ requested in November city staff to provide a better map, which would identify street names.
Tax concerns
During public comment, resident Dwayne Brown, who spoke in opposition to the proposal said, “The real problem with TIF districts are they are subject to local politics and political favoritism. Another complaint is they may cause a tax increase to neighboring properties in the district or outside the district,” he said.
Alderman John Walker was the sole “no” vote on the TIF ordinances.
“When you do a TIF, money that the taxing bodies would normally generate will not be given to them,” he said. “So, in order for their establishments to run smoothly they have to, I would think, raise their levies,” he said, “because they're not getting that money that otherwise would be generated to them.”
The DeKalb School District 428 and the DeKalb Park District boards are among the local tax bodies that support the creation of the TIF district.
Regarding whether the school board may raise taxes in the future, DeKalb School District’s attorney Gino Galluzzo said the school district last year did not raise taxes to the maximum allowed by state statue.
“It left those tax dollars in residences pockets by not taxing them what it could have,” Galluzzo said.
The South Fourth Street TIF goes into effect in tax year 2024 and expires tax year 2047. It's expected to generate over $20 million dollars. Under the city’s agreement with the taxing bodies impacted by the newly formed district, 46% percent of the total raised will return to the taxing bodies, also known as TIF surplus distribution.
