Woodstock School District Looking at Suing Lakewood over TIF District

Lakewood’s Tax Increment Financing (TIF) District is on the agenda of the Woodstock School District Tuesday.

Here’s the posting:

Approval of Resolution Authorizing Lawsuit against the Village of Lakewood Seeking Dissolution of the Illinois Route 47 and Illinois Route 176 TIF District.

The TIF District, approved by the Lakewood Village Board to finance at least the extension of sewer and water to the potential commercial sites at both intersections of Routes 47 and 176, first surfaced when a SportsPlex was proposed.

That proposal seems to have gone by the wayside–before the April Village Board election–but the citizenry didn’t find out until afterward.

In play during that election was a write-in campaign by Paul Serwatka, which was spectacularly successful. He won almost 70% more votes than the highest winner on the ballot.

Paul Serwatka's sign hits property taxes, the Tax Increment Financing District and the SportsPlex. It went up the second week of March.

Paul Serwatka’s sign hits property taxes, the Tax Increment Financing District and the SportsPlex. It went up the second week of March.

You can tell by the yard sign the issues that were in play.

Also opposing the TIF district was Susan Handelsman, a resident  the Woodstock School District.

She has predicted that

  • Lakewood will allow lower cost housing to  be built west of Route 47 in the TIF District in order to meet state requirements and
  • children will go to Woodstock schools, but the taxes from such housing will go to Lakewood Village officials to spent on TIF District improvements, rather than help finance the students’ education.

Handelsman says,

“If it goes to trial, it will be a seminal case in Illinois. It’s a great opportunity to define ‘but-for’ and to determine municipal limitations on dumping tax liability onto neighboring communities.”

TIF Districts are not supposed to be created unless development would not result “but for” the creation of the TIF District.

The Woodstock School District did not object to the formation of the TIF District when it had the chance.

Where to find the Clay Professional Development Center.

Where to find the Clay Professional Development Center.

The School Board will consider the suit idea at a meeting starting at 7 PM on Tuesday, December 15th at Clay Professional Development Center, 112 Grove Street.  The proposal is far down on the agenda.


Woodstock School District Looking at Suing Lakewood over TIF District — 10 Comments

  1. I wonder if a greater percentage of the county could be declared a TIF, as opposed to not meeting TIF criteria.

  2. In other words could over 50% of the county be found to be TIF eligible.

  3. Absolutely.

    The eligibility language is so vague and liberal that any property can arguably qualify as blighted under some ‘expert”s interpretation.

    This goes to the heart of tif morality, if not legality:

    If EVERYBODY takes advantage of this nifty property tax-money re-direction tool, could our county (State, Country) survive?

  4. Another example of how screwed the State of Illinois has become.

    God I can’t wait to leave this state and return home.

  5. Having reviewed the TIF development study, I’m having a hard time making the numbers work on this project.

    The study identifies the costs ($66 million) for this project, but there are no details behind how much revenue is generated into the TIF Fund and, just as importantly, when.

    The following 2 sentences represent the only discussion regarding revenues in the Study:

    “By tax year 2037 (collection year 2038), the EAV for the RPA will be approximately $34,000,000. This estimate assumes substantial development of commercial, entertainment and other uses within the RPA.”

    Given that a large majority of the $66 million in costs are incurred up front (Land Acq/Infrastructure Improvements, Studies, Relo, etc.), that means that the Village has to issue debt upfront to pay for these costs, with future TIF revenue obligated to pay off the future debt service expense.

    Since this is a very large project, its going to take a long time to develop all 609 acres.

    Which means that the incremental TIF EAV growth which generates the revenue to make the future debt service payments is going to take many, many years to come online.

    The longer it takes to get to the expected EAV target of $34 million, the less TIF revenue that accumulates in the TIF Fund.

    And if there is not enough TIF revenue to pay the debt service, the Village is on the hook to make up the shortfall.

    After running through EAV growth numbers from YEAR 1 to 23, it becomes obvious that if this project isn’t fully online by Year 10 to 12, it will never generate enough TIF revenue over the years to offset $66 million in expense.

    What is really scary is when you put together a less optimistic scenario where the new growth only hits, lets say, $15 million. The TIF revenue falls abysmally short of what is needed to make the debt service payments.

    I’m wondering if there exists a schedule which shows by year, Years 1 to 23, (with Year 1 EAV=$0 and Year 23 EAV=$34 mil) what the TIF EAV is and the associated Revenue?

    Secondly, I’m wondering if the same Year 1 to 23 schedule exists for the $66 mil in Project Costs and the associated debt service payments?

  6. Mr. Coffey, your points are well taken.

    The statute says proof must be given that development would not occur absent a TIF district.

    The firm hired to give their opinion — the legal standard of “proof” — presented no evidence to support that conclusion.

    Worse, they have opined positively on 50 of 50 TIF districts for which they were hired to opine, and they have NEVER done a retroactive study of the districts on which they opined to determine if their opinions were accurate.

    We know from independent academic research that, using the legal standard, TIF districts in Illinois are rarely successful.

    Yet even if the success rate were 50%, the probability that this particular firm would have gotten 50 out of 50 winners in a row is 0.5 to the 50th power, or less than one in a THOUSAND TRILLION!

    The Supreme Court accepted a much lower standard of statistical proof in opining that there was a pattern of racial prejudice in jury selection in the South back in the 1960s.

    In short, the evidence is overwhelming that the “study” was made as instructed.

    And that means the likelihood is great that the taxpayers would take it in the shorts.

  7. The Lakewood State Route 47 & 176 $66 Million 609 Acre Taxpayer Funded Project TIF.

    Maybe that would grab the attention of more people.

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