Lakewood Kills TIF District

Lakewood killed its Tax Increment Financing District Tuesday night by a 5-1 vote.

The only opposition came from the longest-service Trustee, Carl Davis.

(If anyone can remember any TIF district being abolished after this short a time, please let readers know in the comment section.)

Voting against continuation of the TIF District were newly-elected Trustees Amy Fues Odom, Richard Ritchie, Phil Stephan and newly-appointed Trustee Patrick Rexroat.

Trustee Jason McMahon, appointed by outgoing Village President Erin Smith to replace Ken Santowski, who resigned, would have voted against abolition, if statements sent to McHenry County Blog were predictive.

Public comment was focused on the subject.

The Lakewood Village Board meeting room was full.

Pete Olson, an opponent of continuing the TIF District, led off getting answers to questions that previous Boards would not have given.

Santowski, who ran an unsuccessful write-in campaign against Paul Serwatka for Village President, tried to pin Serwatka with having said that he would reduce property tax bills 10%.

Serwatka referred him to written positions on his campaign web site, in which he said he said that he was talking about cutting only the village tax levy.

Sharon Lockwood of the Georgetown Subdivision, said she was “delighted that you are addressing the TIF.”

She pointed out the failed Huntley Outlet Store and McHenry Riverwalk TIFs.

The area in Lakewood’s Tax Increment Financing District.

John Craig, one of the owners of Crystal Woods Golf Club complained of not having received notice of the meeting, even though his property was in the TIF District and that Serwatka had not returned eight phone calls.

He contended that when approached to annex to Lakewood that there was a verbal commitment that the intersection would be commercially developed

“As it turns out, it hasn’t worked out very well for us,” he said.

Serwatka opined that the “direction in which Lakewood was being steered is the very reson Illinois is the worst (or second worst) in the nation.

“Economic development is a euphemism for corporate welfare.”

I pointed out that every TIF district in McHenry County had raised taxes for me and every other property owner outside the TIF district.

George Mueller, a member of Lakewood’s economic development committee pointed out that some TIF districts, like the one in Downtown Crystal Lake, work, while others don’t.

He stressed that it took a long time to bring a TIF district into being.

Lakewood’s “first meeting was when Bill Clinton was President,” he said.

Howard Frank said a TIF might make sense for a larger community, but “this TIF is a total waste of our money.”

Walt Kolumba said the people in the crowded room were attending the wrong meeting, that they should be at Crystal Lake High School District 155’s to “see where our money is going.”

Matt Norton, attorney for Craig Woods and Crystal Woods Golf Courses, urged the Board not to “throw the baby out with the bath water.”

He said there were ways to “limit the debt to ‘pay as you go’ notes on the backs of the developer.”

He also said his clients’ zoning indicated that they would access to sewer and water.

Al Stenstrom, a leader in the fight against the McHenry County SportsPlex, the development that seems to have spurred creation of the TIF district, said that more TIFs have failed than succeeded.”

He contended the people who would benefit “have put very little into the pot.”

Joe Tirio, who fought TIFs in Woodstock prior to being elected McHenry County Recorder of Deeds stated that TIFs “take our money and give it to developers.

“Developers have no requirement to provide anything.

“If the market needed a SportsPlex, [one would be built].”

“I applaud your resolve.

“Release the money back to the taxpayers.”

And that was just the Public Comment part of the meeting.

In the debate on TIF repeal, Stephan explained, “We know the consensus of the residents.”

He mentioned opposition to the $1 million (of $66 million) allocated for “residential development.”

Stephan contended that “all the risk is on the taxpayers,” that village taxpayers can’t service a debt of $7 million to run sewer and water to Route 47.

He also debunked Jason McHahon’s contention that village taxes would increase 12%, if the TIF district were abolished, noting that the money had already been paid by taxpayers.

Ritchie observed that “maybe in five years, ten years, twenty-five years” the location at Routes 47 and 176 “may be a hot bed.”

He wasn’t willing to bet on the come.

Davis, the only one remaining of the Board who approved the TIF district, argued that the details previously passed could be modified.

“If we dissolve the TIF today, we’ll be giving that $200,000 to other tax districts.

“Its $200,000 that could be paid back to Lakewood taxpayers and [if we dissolve it]…it won’t.”

Paul Serwatka

“It’s robbing Peter to pay Paul,” Serwatka interjected, “and both live in Lakewood.”

“I agree with you that $66 million is scary,” Davis continued.

“We can eliminate the residential housing portion.

“Why don’t we make this a tool, rather than just throw it out?”

Having seen number run using various assumptions, Serwatka concluded, “[It] just got riskier and riskier.

“There wasn’t a single scenario where Lakewood came out in the black.”

As the discussion ended, Davis moved to table the motion.

No one seconded that.

Davis complained that he was not included in the financial projection discussions.

“I feel left out.”

= = = = =
After the meeting three people in the back complained to me about not being able to hear the discussion, that a sound system was needed.


Lakewood Kills TIF District — 19 Comments

  1. That must have been some meeting, Walt Kolumba speaking up that the people there should be at the High School for their meeting !

    Well Well Walt were you on the Board when the Trustees voted to buy the Golf Course?

    Some one had better check to see what and where that TIF money is.

    The Law Firm should pay back all the fees they charged to do this.

  2. And so Lakewood under the leadership of it’s new President begins the long awaited process of restoring good stewardship of the peoples purse.

    How very interesting that speaking on the interest of the peoples purse was none other than Joe Tirio, the only member of our County Government committed to eliminating the very office he holds.

    A new day is dawning in Mchenry County and it’s about time.

  3. Heartfelt thanks to the new leadership of Lakewood for doing what it takes to get the right thing done.

    Not just tonight’s vote, but all that went into it from coming to the meetings, enduring the trials of running for election and then capping it off tonight.

    Good job!

  4. This was a joke from the start.

    Common sense finally prevailed.


  5. I stated that the Virginia Street tif was started during there Clinton days, not the one in Lakewood.

  6. Thanks for telling me of my error in reporting what you said.

  7. Worth noting,

    TIFs were initiated in the state of California.

    The state of California has since banned TIFS?

    That should tell you something about TIFs!!!

    Serwatka was exactly on point when he stated that the direction in which Lakewood was being steered is the very reason Illinois is the worst (or second worst) in the nation.”

    A debt of gratitude is owed to Paul Serwatka, Phil Stephan, Ric Ritchie, Amy Odom and Patrick Rexroat, not just from the residents of Lakewood, but from all residents of McHenry County and Illinois!

  8. At last night’s meeting, President Serwatka spoke about many aspects of TIF.

    It was clear his decision to back a resolution dissolving the Lakewood TIF was transparent, well researched, and by no means hasty.

    Every public speaker was heard, and Lakewood Village Board answered their questions (unusual in any public Board meeting).

    One dissenter Trustee stated words to the effect that while TIF is imperfect, it is the only game in town and developers will demand it.

    Not anymore.

    Lakewood has just led by example, a model for McHenry County to declare that public money will not be channeled to private interest on the whim of County/Township/Village officials here.

    Not anymore.

    Development now can be undertaken here without the fear of being disadvantaged by way of artificial political considerations given to competitors.

    We taxpayers who are serious about lowering our property tax rates have a chance now to vote with our pocketbooks (rather than the past decade’s sick forlorn impression that our votes probably don’t matter).

    We can Reward shops and services located in NON-TIF areas by patronizing them.

    Let your City Council, State Rep, Village Board, School Board and County Board know that you want to follow Lakewood’s example and that if they insist on a TIF or TIF extension, you want to see the facts and research about what that will cost YOU as a taxpayer first.

    Thank you Lakewood for showing integrity, political will, and intelligence to fully research who wins and who loses in TIF.

  9. Ding Dong the wicked TIF is dead!!!

    Great job!

    There’s a very good reason TIFs are now illegal in CA.

    Very telling that even the liberal fruitcakes in CA banned them!

  10. It boggles the mind how there can be so many uninformed and ignorant people.

    For the idiot who asked where the TIF money went…..there was no TIF money!

    It takes a project to create a higher value than the empty land that is there now.

    Once the project (whatever it is) is built, the old value remains and the new value creates an increment between the 2 amounts.

    That amount is paid by the project or the businesses that occupy it, not the taxpayers.

    Mr Wilson gave bad advice to Serwatka (man incapable of returning a call) that TIF’s were evil and that they were a hidden tax hike.

    What Mr Wilson failed to mention is that many TIF’s are done as Pay-as-you-go which means that the developer gets ALL the financing on their own.

    Then they are repaid from a list of eligible infrastructure expenses that is state mandated.

    The developer actually puts the money up and pays for work in advance…then has to pay interest on it as well.

    That is not corporate welfare.

    Most towns like Lakewood are required to bring sewer and water to a site and other utilities.

    It is common.

    Wherever all of you live in Lakewood, the Village had to bring out the sewer and water to service you as well.

    You all are cheering that you (not the previous administration) all blew $200k. Why did you repeal it?

    I guess it is because you could not trust yourselves?

    It dissolves itself in 7 years anyway if unused and it was only 4 years away.

    What if a car dealer wants to build over by swanson?

    The amount of sales tax would be astonishing, yet you all are afraid.

    Today I was in City Hall building at CL and I overheard people betting on when Lakewood becomes part of CL.

    I then went to the court building and some lawyer friends were actually giving an over/under on when Lakewood would become part of CL.

    The betting money is over 5 years and less than 10.

    All of your taxes will go up and up.

    If you reduce the levy and use the reserves you will ruin the village.

    A $400K house has taxes of roughly $12K, and only 10% goes to the Village.

    That is $1200 dollars, that is it and you all want to save 10% or $100 dollars.

    Am I talking to people that give the grandchildren a dollar for their birthday?

    The Village of Lakewood had a stellar reputation, a AAA bond rating and respect and influence around the state despite its size.

    I just have to wonder as a Republican man if our new Prez and his band of merry followers are sexist?

    You now have someone in your Prez seat that has no vision for Lakewood, only that he wants to cut taxes.

    Again, there is not much to cut from….if any of you had a brain….you would see that one car dealership could actually wipe out your RE taxes and pay for the sewer and water.

    Yet you will never know because you foolishly abolished something that did not need to be demolished.

    It was a tool just sitting in the box waiting for something to come along and it was already paid for.

    Mr Wilson believes that a TIF is bonded at the beginning and the developer gets the money to build and if it fails the Village is on the hook.

    That is a TIF bond.

    What he does not understand is that small towns rarely do them because they would be bankrupt if the project failed.

    No Municipal Advisor (a federal requirement for bonds since 2015) would sign off on a TIF bond for Lakewood.

    But a PAYGO or pay-as-you-go TIF puts the onus on the developer and they are responsible to create the increment, no matter what the Village is not on the hook.

    For those of you who say “what if the project failed”.

    I can point you to Turnberry where there are about 30 bank owned homes paying taxes currently and it would be no different here.

    The bank would be responsible until the development was resold.

    To susan: This is not PUBLIC MONEY.

    This is real estate taxes created by whatever is built.

    So if they built a waterpark hotel for $50 million, the developer finances the $50 million on his own, they cannot use pay as you go as a promise, other than it can be captured by the bond company.

    The taxes on that property are roughly $1.5 million and the waterpark hotel has to pay those taxes.

    Then the developer gets back small shares of it for things he had to do regarding infrastructure.

    It is state mandated and reimburses developers because it is a area in need and Village did not do it all in advance.

    You were so wrong on every level and Serwatka is just learning this stuff.

    Yet he acted anyway?


    The Prez had zero financial proposals, NONE.

    Good luck Lakewood….you will need it.

  11. Citizen x I don’t know which is worse, your multiple brazen factual misrepresentations or your very obtuse, very dangerous presumptions.

    In any case, One can only pray you do not hold any public office.

  12. Pritchard….tell me one misrepresentation?

    Prove it.

    Everything I said was 100% true and I would love to meet and show you actual documents about how these things work.

    You have so much to learn.

  13. CitizenX is probably the moron that gave Crystal Lake those $16,000 phallic symbols on route 14 that we all will be paying for for the next thirty years.

    That is the kind of nitwit that thinks others are stupid when they fight this claptrap.

    Kudos to the village, the good people, and their leaders that defeated this abomination.

    Drain that swamp!

  14. Cindy, your words show your intellect. Tell me where I am wrong. I would be happy to sit down with you and bring a team of experts along to educate you on many government truths.

  15. Cindy, the village employees are normal people like you, accept they live in reality.

    It takes people to run your town, the board does not.

    You have 3 open spots now and where is the transparency on how they will fill those jobs.

    Of course you want to offer them low salaries and make Lakewood a place no one wants to work.

    Your Village manager quit because you nickel and dimed her and now she is making more as a dean of a collage.

    The new board will lead to a brain drain from your Village and a higher bond rate that will lead to higher taxes and you all joining crystal lake. S

    hipley is drooling about getting Lakewood into the fold.

  16. I don’t talk to people that do not know the differnce between accept and except. Your reality is askance.

  17. CX, it is understandable you have a strong opinion from the developer POV, but you have not identified many relevant details which fail to support your frustrated outrage at being denied risk amelioration at public expense.

    1. This particular TIF did not meet standards required to prove blight, and it crossed into a school district whereby all the incremental property taxrevenues would be shunted to Lakewood for 35 years, while all of the costs and obligations associated with providing education and all affiliated mandated expenses of serving TIF children or disabled adults up to age 21 would become the burden of Woodstock school district .

    Significantly , all ( non-TIF-annex) Lakewood children attend Crystal Lake schools, and pay all their property taxes to Crystal Lake Schools.

    Naturally, Woodstock school district prepared a lawsuit to challenge the legality of Lakewood TIF and it would have no been filed had Lakewood not offered IGA ‘make-whole agreement’ in return for Woodstock D200 dropping litigation.

    Win or lose that litigation would have cost Lakewood citizens tax dollars, and delayed the TIF for years.

    And it is absurd to think that you could have legally carved out a high-density low-income housing development which might generate property taxes a fraction of education costs from the tif to cleverly evade Lakewood’s IGA make-whole obligations– which were agreed to in return for halting well founded litigation.

    2. It is difficult to imagine circumstances ( for 35 years) wherein ANY taxpayers are better off for having agreed to TIF on golf courses and farmland.

    Taxpayers in Lakewood, let’s call them set L. Taxpayers in which ever school district was obligated with cost of education provision of the TIF children, let’s call them set A.

    Taxpayers who pay countywide taxes (county, mcc, mccd, etc.) will be called set C.

    There at two revenue streams from a TIF, municipality receives sales taxes, and municipality receives property tax increment.

    1. TIF revenues must be spent on TIF.
    L cannot offset municipal costs with these revenues.

    L would pay more for additional personnel and equipment to service the TIF: police, fire&rescue, with pension obligations and liability risk also falling to L.

    Municipal sewer and water: expanded facilities may require more personnel and pension liability, as well as future maintenance costs affiliated with expansion falling on L.

    2. 35 years of inflationary tax increment revenue would be lost by L, A, and C (taxpayers) who would be forced to fund the loss.

    Just in the past 3 years ( without any development) the Lakewood TIF has been collecting TIF property tax incremental revenue, just because the property assessments or the tax rate or both have risen with inflation.

    3. Lakewood municipal tax rate is about 1/3 that of Woodstock.

    Developers talk about Lakewood municipal tax bill as if it is the primary importance to property taxpayers.

    It is NOT.

    The municipal tax rate as a portion of Lakewood total property tax bill is around 12%.

    To any taxpayer in set L when L also includes set A, and is by definition also in set C,:

    At such point as 12% of your property tax bill ( the municipal portion) goes to Zero, if the remainder of your tax bill has risen 15% you are at a net loss.

    PTELL grants taxing bodies the ability to raise levies 5% per year.

    Assuming property assessment values do not FALL as a result of nominal higher taxes and higher tax rates, if taxing bodies raise levies to the max under the law ( due to inflation, or due to higher costs associated with providing services to TIF developments ), it is easy to calculate how rapidly the threshold will be reached whereby even Lakewood property taxpayers are paying more that they would have had the TIF not occurrred.

    TIFs pay zero incremental or inflationary property taxes to taxing bodies for 35 years nomatter how high a cost of social service provision the taxing bodies incur.

    That means that a cornfield, which requires no schools, no fire dept, no library, no conservation district,little police, and serves to absorb flash flood groundwater with nowhere else to go generated by nearby housing developments, would pay a whole bunch more property taxes, and cost a whole bunch less in property tax liability, , than any TIF development over the next 35 years.

    4. Taxpayers in A and C but not L will see only increased property tax bills, and no increased revenue, for 35 years.

    5. Taxpayers in A, C, and L, which is to say ALL taxpayers, lose when development does not occur naturally.

    When development occurs naturally, developers who stand to profit from BIG rewards TAKE THEIR OWN RISKS.

    When development occurs because of a TIF, it solidifies the argument that NO DEVELOPMENT should ever occur WITHOUT a TIF.

    6. If no future development in McHenry County is willing to occur without TIF (which shifts risk to local property taxpayers while rewards stay with developers), can you expatiate what property taxes rate ( already near highest in nation) will be as future development is forced upon beleaguered property taxpayers?

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