The suggestion of a TIF district was first introduced to the council
at the March 13 meeting by Lisa Kramer of Prairie Engineers and John
Myers, an attorney with Rabin & Myers in Springfield.
considerable experience in representing municipalities in forming
TIF districts and led most of the discussion on the topic. He
explained the advantages of the district in that it assists with
economic development and, in the case of Lincoln, in rehabilitation
of the downtown area.
Myers also answered several questions from aldermen, most of
which dealt with what aspects of the proposed TIF might be upsetting
to area schools and local citizens.
In the case of the type of program Myers and Kramer were
discussing with the city, Myers said the rehabilitation TIFs seldom
cause a problem for schools because they don't produce increased
He also noted a misconception of many citizens that establishing
a TIF district would mean an increased levy on property tax. It does
However, what it does mean is that taxes collected are
redistributed, with a portion going to a specific fund, which finances the daily operations of
This week, Mayor Keith Snyder asked aldermen if they had received
any feedback from the public on the establishment of a TIF district.
Alderwoman Melody Anderson said she had talked to a few people,
and her impression was that they were not overly concerned about it,
perhaps not even really all that interested.
The consensus seemed to be that because constituents understood
this was not a program that would increase their property tax bills,
they were not voicing opinions on it one way or the other.
Snyder said he hadn't gotten any comments on it, and he had
spoken with District 27 Superintendent Mary Ahillen as well as
Lincoln High School Superintendent Robert Bagby about the idea.
Snyder said what he needed to know next was the thoughts of the
council: Should the city move forward in the process?
In order to establish a TIF district, there would first need to
be a study of the downtown area to see that it qualifies
specifically for what would be a rehabilitation or revitalization
To qualify, the city would be divided into parcels and each
parcel examined by Myers and Kramer. The criteria would include the
age of the business buildings and the need for revitalization.
Within the parcel, any residential buildings would be excluded.
Snyder said this first study would cost $25,000. If a TIF
district can be established, then there would be an additional
estimated $10,000 for the writing of ordinances and the development
of a specific plan.
The first problem is: Where will the money come from for the
initial study? The city is cash-strapped in its budget, as it has
been for the last several years. Therefore drafting a check out of
the general operating fund is not an option.
Snyder recounted what Myers had said last week that the city
could front the money, then pay itself back from tax earnings once
the TIF program was up and running.
He said there was also a possibility that a professional
developer would want to pay the initial $25,000; then that party
would be paid back through the tax revenues.
Then, there is a third option, to collapse the revolving loan
program and use that money to pay for the study.
The revolving loan program is an old program that was implemented
years ago by the Illinois Department of Commerce and Economic
Opportunity. It began with a specific grant amount that cities could
lend out to local businesses specifically for economic development.
The cities were allowed to charge a discounted interest rate and
make money from the loan program, which in turn was supposed to be
invested in new loans or other economic development projects.
Snyder said the city currently has $250,000 in the revolving loan
fund. The catch is they cannot take just the $25,000 out. If they
are going to use it, they have to designate all the funds for
economic development projects.
Snyder said the city would have to find purposes for the entire
amount. He offered a couple of suggestions, such as spending a
portion of the money to underwrite a study on redevelopment of the
former Lincoln Developmental Center campus.
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He said he had also talked to Mike Maniscalco of the Lincoln &
Logan County Development Partnership about this. Maniscalco has told
Snyder of a program he would like to start in Logan County for young
entrepreneurs. The development partnership would solicit proposals
from young entrepreneurs, take those to local businesses in Logan
County and see if they would underwrite some of the costs.
Snyder said in that program, "a great idea might be underwriting
the city Internet for a year for a company or helping with rent for
a year or something like that."
Snyder said the downside is once the money is used, it's gone. He
explained that it was originally intended to be loaned out, but
there was a stipulation that one new job had to be created for every
$15,000 loaned out. He said it was pretty hard to pay a new employee
with $15,000, which may be why the loan program hasn't gotten any
interest in quite some time.
Alderman David Wilmert asked if there was a specific time frame
when decisions had to be made. Snyder said there was not, but the
sooner the city gets started, the sooner they'll have a program in
Chuck Conzo, city treasurer, commented on the revolving loan
money, saying there were circumstances when the money, which must be
for economic improvement, could be used for infrastructure
Tracy Jackson of the street and alley department then wondered if
one thing the loan money could be used for was to pay for the
redevelopment of the parking along Sangamon Avenue.
Conzo said it could, and that had been discussed earlier. The
problem had been the amount of paperwork the owners of the Blue Dog
Inn would have to do to get the funds released.
However, it was noted this is now a different situation. If the
city collapses the fund and earmarks a portion of it for development
of the parking area, that would no longer have any connection with
the Blue Dog.
Alderman Tom O'Donohue asked what was involved in collapsing the
fund. Conzo said it would involve a lot of paperwork that would have
to be prepared according to DCEO guidelines. Then the plans for the
money would have to be submitted to DCEO, which would have to
approve all of it and then give permission for the city to take the
money and close the revolving loan program.
Alderman Jeff Hoinacki asked what would happen if the city
created a TIF district and no one used it. Would there be costs
involved in maintaining the TIF that would end up being city expense
because there was no TIF revenue?
City attorney Bill Bates said there would be ongoing costs
involved in administering the program. He said there would be record
maintenance and a TIF administrator.
Snyder said those would be expenses that came out of TIF
revenues. But Hoinacki said that was his point: if there is TIF
money. If not, the city would still have to foot those bills.
Hoinacki also summarized what he saw as the next step: "It sounds
like we need to make out a wish list."
The list he was referring to would be one that expends the full
$250,000 in the revolving loan program.
Also in attendance at the Tuesday night meeting was local
business owner David Lanterman. From the gallery he offered a
suggestion for the wish list.
As the city works with the revitalization money they have
received, they will develop plans for downtown enhancement grants.
Those grants come with a local match requirement. Lanterman
suggested they earmark a portion of the $250,000 as match for
Snyder said that was a good idea. There is a grant application
opportunity coming up where the local match is 20 percent. He said
the city could earmark $100,000 for match money, and that would
cover a $500,000 grant.
At the end of the discussion, it was agreed that aldermen would
give thought to what economic development projects the city could
spend the revolving loan money on, and the topic would be discussed
again in the future.
[By NILA SMITH]
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