St. Charles wants to extend life of special taxing district

St. Charles wants to extend the life of its First Street tax increment financing district so revenue from the district can continue to be used to repay the city for money it borrowed to fund downtown redevelopment.

If the TIF district expires as scheduled at the end of 2025, the city will have to pay the entire cost of the outstanding $24 million debt.

However, state lawmakers would have to approve a proposed 12-year extension.

The St. Charles City Council’s government operations committee approved the plan to extend the life of the TIF district on Monday. The city council could vote on the proposal during its next meeting.

The TIF district was created in March 2002 for an area west of the Fox River south of Main Street.

The city borrowed $28.9 million to pay upfront for costs associated with redeveloping land in the district, according to city finance director Bill Hannah. It issued general obligation bonds backed by the city’s ability to levy property taxes.

Redevelopment of sites within the district was supposed to increase property values, thereby increasing property taxes on the land. The incremental increase in property taxes collected was supposed to repay the bonds.

After the first two phases of a five-phase redevelopment project, the Great Recession hit in 2008. There was no significant development in the district for roughly seven years, and the district lost value, Hannah told aldermen on Monday.

The council removed some of the land from the TIF district in 2015 and added it to a new TIF, the Central Downtown district, which expires in 2037. The Central Downtown TIF also includes sites east of the river.

The city has used revenue from its Central Downtown TIF to help pay the bond payments. According to 2023 TIF district reports filed with the state, the city made a $993,110 bond payment ‒ of which almost $518,000 came from the Central Downtown TIF.

All affected taxing bodies except Kane County have given support to the extension.

The Kane County board was supposed to vote on the request on Tuesday. But that part of its meeting was postponed due to not enough members attending the meeting.

Projects built in the First Street TIF district have included a public plaza, parking decks and mixed-use office and retail buildings.

https://www.dailyherald.com/20241009/news/st-charles-wants-to-extend-life-of-special-taxing-district/