Proposed residential TIF district         

To the editor:

As a long-term developer of property in many areas of Illinois and with a personal interest in seeing the city of Lincoln grow and prosper, I would like to offer the citizens of Lincoln and their elected representatives my personal opinion of the proposed residential TIF district. [See article.]

First I am aware of the developer's work elsewhere and believe they are very capable of developing this proposed subdivision. However, their representative did say at the council work session that without the TIF they would have no interest in pursuing the development.

That said, my personal belief about a residential TIF is as follows:

A community should never pledge future taxes to "incent" residential development.

Some of the reasons:

1. The residential development brings with it the potential for tremendous social support requirements.

2. If all the incremental tax revenue is committed for the next 23 years, there will be no funds available to pay for what will be needed. (The amount to be "pledged" back to the developer is still to be determined.)

1. School needs (130 lots will ultimately generate 1.x kids per house, which will, not could, overwhelm the existing K-8 school, not to mention the impact on the high school). Even though the developer representative talked about "capital impact" tax payments to the school out of the TIF revenue, it will in all likelihood be woefully inadequate to fund the potential expansion requirements. As a result, all taxpayers will have to pay for an expansion of the K-8 school.
2. Police patrols will have to be expanded.
3. Fire protection services will increase. It would be naive to think 130 households will not require additional emergency medical and fire runs.
4. Streets: Snowplowing and normal repairs and maintenance. What about the additional burden upon Fifth Street Road or Forest Hills? At some future time there may be money for its improvement, but currently we are lucky to see the money to "study the issue."

1. Sewer repairs and maintenance will increase. What is the current sewer capacity, and what additional burden would 130 households create?
2. Social services needed. The development will mirror the community as a whole and certainly will bring some additional needs.

2. A residential developer may ask for reimbursement from the TIF for land, infrastructure, legal, financing and carrying costs, etc. We have seen nothing specific about this proposal.

3. Specifics we have seen:

1. From the initial presentation, the city has only seen a "rendering" of the proposed subdivision. That is by no means a final commitment. I believe they show 70-foot lots now. What if the city approves the TIF and the developer decides to reduce the size of the lots and have more of them, similar to what was proposed along Connolley Road several years ago by a developer I recall as "Bluebill"?
2. There were no cost estimates provided of what the developer believes will be the reimbursement demands made upon the TIF funds. Will it take the entire 23 years of funds?
3. Is the developer allowed to make a profit on the infrastructure installation, and if so, how much?
4. When asked about local contractor participation, the response was that all construction would be done by the developer's own personnel.
5. Even though there were no specifics about the project presented, if memory serves me right, the representative did present the TIF documents to the city attorney and "mused" that they would like to get approval and break ground in a few weeks.

I believe the most important point:

The city leaders should take notice of the fact that neither Bloomington nor Normal will establish any TIF districts or provide any incentive for residential development. They only establish enterprise zones for commercial development. In fact, both communities have significant "impact fees" that they charge to developers of residential property, including but not limited to contribution land for schools, land for parks and "cash" fees.

4. The representative raised the question of including the proposed commercial property next to Sysco in the TIF.

1. If the undeveloped "commercial" property was included in the TIF and someone came along wanting to develop the commercial property, there would be nothing left to develop the infrastructure for the commercial property because all "incremental taxes" would be pledged to the residential development first.

This is a 23-year commitment. Please take the appropriate time to evaluate the risk and rewards to the city.

Thanks for listening.

David Golwitzer

(Posted March 2, 2006)

---