Annual Review Shows One TIF District 'Marginal', the Other Promising

Village administrators powwowed Tuesday morning to put their financial stethoscopes to the pulse of Morton Grove's tax incremental financing districts. The bill of health wasn't exactly perfect.

The Waukegan Road district "a marginal TIF right now," according to Morton Grove Finance Director Ryan Horne.

“Financially, it is challenging because we do need one or two more projects in the Waukegan Road TIF for it to be considered a financially healthy TIF,” Horne said at a meeting held yesterday to review both the Waukegan Road and Lehigh-Ferris TIF districts.

Two different financial pictures

TIF districts function by redistributing property taxes to a designated area for the purpose of redevelopment, while freezing other taxing bodies’ shares.

The Waukegan Road TIF’s fund balance was at a deficit of about $1 million at the end of 2010. The district, established in 1995, collected $691,414 in revenue last year, but spent $795,096—most of it on debt payment. The tax district is set to expire in 2018, as TIFs in Illinois typically have a 23-year lifetime.

Boasting better fiscal health, the Lehigh-Ferris TIF had a year-end fund balance of $12.5 million. The district, designated in 2000, collected about $2.9 million in property taxes and brought in revenue just over $3 million last year. The district actually spent about $1.8 million more than it profited in 2010, but not without reason: Most of those expenditures were for capitol projects tied to economic development efforts.

The Lehigh-Ferris TIF, scheduled to expire in 2023, has a couple of big projects slated, such as the construction of an 81-unit senior housing development, and the arrival of Pequod's Pizza. The village also opened a 112-unit parking lot near the Metra station earlier this year.

Lehigh-Ferris has the benefit of more space and more parcels to offer businesses than Waukegan Road. It also reaps more from property taxes, as it encompasses a bigger area.

Officials say that there are not many vacant retail spaces available on Waukegan Road, and that most of the available parcels are somewhat small, which makes it difficult to attract businesses. 

“Lehigh-Ferris—there are acres there available. In Waukegan, there’s square footage,” said Village Trustee Bill Grear.

Waukegan Road TIF not just a moneymaker

John Said, community and economic development director, insisted that the two TIFs should be viewed in different contexts.

He emphasized that Waukegan Road was "not just intended to be a moneymaker"; it was established in 1995 to “change the character of the area,” and has been extremely successful in that regard, he said.

“The Waukegan Road District, from its inception, was created for a different reason, and that was to redevelop some very challenging, difficult areas that used to exist here," he said.

He was referring to a time, prior to the district's growth, when several motels in the area presented the community with crime concerns.

The goal of the district was to get rid of all of that and replace it with “more productive, positive commercial uses," Horne said.

The village is still attempting to bring more business to the corridor, as shown by the recent opening of a Crazy Jaws restaurant.

Said explained that one goal for the next year could be commercial development in the district in the areas close to Dempster Street. 

“If we can get some projects underway there, that would be a good thing,” he said, noting that while the village is exploring some options, nothing is set in stone as of right now. 

TIF promotion

One resident at the meeting emphasized that the village needed to do more to promote the TIF districts and invite private investment and business.

Asked about promotional efforts after the meeting adjourned, Grear said: “We are promoting every day. I don’t know what else you can say. We have a lot in the oven."