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Harrisburg targets TIFs for growth

</element><element id="paragraph-1" type="body"><![CDATA[The city&#39;s one and only TIF district has just one year to live, but it may be getting a new lease on life as well as two new neighbors.

Proposals for two new TIF districts would target growth along the new state Route 13 corridor and help rebuild parts of the community devastated by the Feb. 29 tornado.

Mayor Eric Gregg has long supported the redevelopment of the city through the use of tax increment financing districts. A TIF district permits tax money to remain within the boundaries of the district to promote infrastructure and development. The city has been talking about a possible TIF District II since last year. The idea for TIF III blossomed out of the disaster&#39;s rubble.

Bob Vancil, the city&#39;s TIF consultant, and two local proponents of the new districts, Lu Walker Maddox of Harrisburg and Fletcher Johnson of Eldorado, outlined some of the details Tuesday.

The city has until the end of next week to gather letters of support from area taxing bodies so local lawmakers can amend legislation to extend the life of TIF I by 12 years.

Normally TIF districts last 23 years although the state has extended the life of other districts around the state when new opportunities presented themselves.

The quick deadline is due to the General Assembly&#39;s calendar counting down to the end of the spring session next month.

TIF 1 covers the city&#39;s northeast quadrant running from state Route 34 east to U.S. Route 45. When created in 1990 the city used it to develop the infrastructure for the new Arrowhead Point Shopping Center and redevelopment of the Big Four railroad yards that became Veterans Drive.

Now TIF supporters want to use the additional life span to help kick-start TIF II along the bypass, now Bill Franks Way, as well as support the city&#39;s tornado recovery in what would be TIF III.

TIF II includes around 374 acres along the bypass west of Main Street, mostly out on the far end of Harrisburg where the land lays above the flood plain. It also includes an undetermined number of acres east of state Route 34, a tail running south to pick up the north side of downtown and east to the City Hall, as well as a portion of land now in TIF 1 that for the most part is still undeveloped, or hasn&#39;t been redeveloped since the city created its initial TIF district.

"It goes through the undeveloped heart of Harrisburg," Johnson described it.

"And under-developed too," Walker added.

The bypass follows the route of an early railroad. Rail and coal interests owned much of the land throughout most of the 20th Century.

"A lot of [that land] has been in corporate hands for a very long time," Johnson said adding that his tract had been owned from 1905 to 1997.

The preliminary redevelopment plan for TIF II calls for a focus of new private sector commercial investments of $1 million a year for the first 10 years.

Johnson hopes to see new retail establishments attracted to the region.

New retail brings new sales tax dollars to both the city and county, says Vancil, adding that with the new 1 percent sales tax for school construction, it also helps schools as well.

Between the new sales tax and the state&#39;s equalization school aid formula that in effects subsidizes schools with TIFs, there&#39;s very little negative impact to school districts.

"Because of this, TIFs virtually have no impact to the school district as it once did," explained Vancil who noted that he has already met with Harrisburg&#39;s superintendent about how TIF II and III could involve the school district.

No details though have been worked out yet.

Unlike TIF I which focused almost primarily on commercial office and retail space, Vancil sees TIF II including a residential component, especially one targeting senior citizens as a growth area for Harrisburg.

At least one developer has expressed interest in building a new retirement home or assisted living facility. Vancil projects three to be built within the first eight years.

The redevelopment plan also projects about six new single family homes a year for 10 years in the area. These too would likely focus on seniors based on discussions by interested developers.

The next step in developing this second TIF district would be for the city council to approve the TIF II feasibility study at an upcoming meeting. After that assuming all the paperwork is back from the assessor&#39;s office, the council can approve the final redevelopment plan as soon as 14 days later.

With a final redevelopment plan in place the public and other taxing bodies have the time to study the proposal. As part of the study period the city has to notify every land owner within the proposed TIF district as well as every land owner within 750 feet of the district.

After 45 days the city holds a public hearing on the plan. After another two weeks the city council would then vote on whether to create the new district.

Vancil had hoped to bring the TIF II feasibility study and an agreement to hire his firm to shepherd the development of TIF III before the city council Thursday, but with Mayor Gregg still recovering from his 19-day hospitalization, that&#39;s been postponed to likely the next council meeting scheduled for the second Thursday in May.

Currently the city is looking at late July or early August as the quickest TIF II could be enacted. Vancil said at best TIF III would follow about a month later.

Nothing has been set in stone for TIF III, especially the final boundaries which for now consist of a squiggly set of parallel lines on a map following the deadly twister&#39;s path.

Maddox stressed TIF III has never been formally proposed to the city but has just come up in discussions of how the city could use TIF for tornado recovery efforts after FEMA&#39;s rejection of a federal disaster declaration for Harrisburg.

"It's not the perfect solution, but together you could make inroads in dealing with the tragedy," Vancil said.

It couldn't replace the lives lost or the human suffering, he said, but it could significantly help with the rebuilding and getting the city back on its feet.

One of the projects possible under TIF III to help tornado victims could be "interest buy-downs," a form of direct aid to homeowners who have to rebuild. TIF moneys couldn't be used to pay principal, but could help pay the interest on loans where homeowners are having to finance rebuilding.

The ones that would most benefit, Vancil said, would be "those uninsured or under-insured."

The genesis for this idea came from the problem home owners would face from skyrocketing property taxes. TIFs couldn't pay the taxes, but could target some of the interest.

State Rep. Brandon Phelps, D-Harrisburg, has since introduced legislation to freeze assessments on owner-occupied homes rebuilt following a disaster. The bill passed the Illinois House of Representatives 110-0, and is now up in the Senate.

Neither idea would preclude the other. Both could work in tandem Vancil said.

In previous meetings city officials have brought up the issues of water lines in the wrong spots or water lines way too small to support adequate fire protection in parts of Gaskins City hit by the tornado. TIF III could provide the city ways to finance the redevelopment of that infrastructure as well.

Because the tornado never crossed the area covered by TIF I, Vancil wants TIF III to include a section that runs north to connect to it. Illinois law allows cities to use TIF moneys generated in one district to cover allowable expenses in an adjoining district.

If TIF I can be extended for 12 more years it would give the city and other taxing bodies a means to direct funds into TIF III for tornado recovery, he said.

With Mayor Gregg expected to be absent from Thursday&#39;s council meeting, no formal discussion of the TIFs are expected nor appear on the council&#39;s agenda.