The Woodstock City Council voted Tuesday to establish a controversial tax increment financing district in the city.
The downtown TIF No. 2 will cover parts of the downtown and Route 47 areas. Woodstock has an existing TIF district that is set to expire next year. TIF districts are economic development tools that allow a municipality to offer financial incentives to potential developers.
When a TIF district is created, the property tax base is frozen at its current equalized assessed value for that area. The life of a TIF district typically is
23 years. Any property tax dollars generated on properties in the district above the set EAV over the course of that period are put into a separate account to be used for development projects in the TIF area.
The new TIF district will have a base EAV of $26 million, which represents the 2017 value of the 536 parcels in the proposed area. The figure is 5.7 percent of Woodstock’s total EAV, according to city documents.
The existing TIF was established in 1997, and its fund has a deficit of more than $300,000. City Manager Roscoe Stelford said the fiscal 2019 budget has a surplus to its TIF fund to address the deficit.
“We have an idea of how much increment the TIF will generate in a given year, mostly taking into account how mature this TIF is, with only a couple of years left,” Stelford said. “If we spend less than the increment, we create surplus to address deficits in fund balance.”
The Woodstock School District 200 and McHenry County College boards have been critical of the plan. School leaders have said they are concerned that the TIF district will attract housing developments, which in turn will bring new students to the area without bringing any new tax dollars.
City Council member Gordon Tebo, a retired District 200 educator, said a good school district needs a strong municipal base.
“I truly don’t believe the schools will be hurt by this TIF,” he said. “I have heard some sound arguments and things that do concern me, but the majority [of residents I have talked to] are well aware of what the TIF could do, and support it.”
A handful of people spoke in opposition of the TIF plan during a contentious public comment period Tuesday night, which at times led to back-and-forth verbal spars between council members and TIF district opponents.
Woodstock resident Michael Rein, a former McHenry County Board member, said he would like to see the vote tabled and a question put to voters in a referendum. He also questioned the timing of the vote, as three City Council members – Dan Hart, Maureen Larson and Mark Saladin – will be vacating their seats after the consolidated election in April.
City Council members unanimously voted in favor of establishing the TIF district. Hart recused himself from the two-hour discussion and vote.
“I think this is an opportunity for the city,” Saladin said. “If we think development will just happen, we are being naive. We need to be able to compete with the state of Wisconsin and neighboring communities.”
Council member Mike Turner has supported the plan from the start, saying he has a “pro-growth” and “pro-economic development” bias.
“TIF is one of those issues that generates tremendous intensity and difference of opinion,” he said. “It is one of the more difficult things to understand. There are complexities that create uncertainty. But … I believe this investment and approach is absolutely worth considering.”
Council member Jim Prindiville said he thinks the district offers another economic development tool in the city.
“Overall, this program we are entering into is in the best interest of the community,” he said.
Larson said there still are “uphill battles” to development ahead, even with the district in place.
“As we have looked at the TIF, I have concluded that more will get done, and it will get done better,” she said. “There is a cost to what doesn’t get done. There is a cost to being a stagnant community. ... I believe this tool is necessary for us to lift up [the area].”
The City Council already has told the developers of seven projects that TIF money could be available for, some of which included housing in the downtown area.
City leaders have said Woodstock doesn’t intend to take on debt with any projects associated with the TIF, as it did more than a decade ago.
Woodstock issued about $2.5 million in bonds to help clean up the old Die Cast site, now known as Woodstock Station, and still is paying it off. Debt payments will conclude in December 2021, Stelford said.
The site, on McHenry Avenue north of the Square and railroad station, formerly housed a manufacturing facility and was contaminated.
Several developers have expressed interest in building housing units on the property since its rehabilitation, but the projects never were fully realized.
A new developer recently came forward and requested reimbursement for a housing complex on the site if the new TIF district was approved.