Friday, November 04, 2005
Crystal Lake School Districts File Report in Opposition to Vulcan Lakes/Route 14 Tax Increment Financing Project
“After a complete and thorough discussion of the Vulcan Lakes TIF plan,” the report stated, “the JRB passed a motion to recommend disapproval of the plan because it failed to meet one or more of the stated plan goals and objectives.
“Specifically, the study states that one goal and objective of the Vulcan Lakes TIF is to:
“Encourage a diversity of housing types throughout the City which satisfy a wide-range of needs for all persons, regardless of age, race, religion, gender, national origin, physical ability, and economic level.”
”During the JRB’s discussion relative to the size, type, and estimated sales price range of the housing development planned around the Vulcan Lakes area of the TIF, Mr. (Lee) Brown (of Teska & Associates) acknowledged that the housing units would be exclusive in nature due to their close proximity to the lakes.
"Upon further questioning, Mr. Brown estimated that two-bedroom condominium units would be a minimum of $500,000. The remaining housing types to be constructed, including townhouses and single-family homes, would be in excess of that number, depending upon their exact location relative to the lakes.
“Clearly, the proposed development of exclusive lakefront or lakeview properties, costing $500,000 at a minimum, does not meet the plan’s stated objective to encourage a diversity of housing types regardless of economic level,” the report notes. “It is therefore the finding of the JRB that this stated objective of the plan has not been met.
“Further, relative to the findings of need for tax increment financing…, the JRB disagrees with the conclusion that:
“The City finds that the Project Area on the whole has not been subject to growth and redevelopment through investment by private enterprise, based on the physical condition and the lag in growth in property values as follows:
“The total Equalized Assessed Value (EAV) of the Project Area lagged that of the balance of the City of Crystal Lake in 2000, 2001, 2002, 2003, and 2004. Relative to the immediate surroundings, the Project Area has not experienced appropriate growth in the tax base or shown evidence of private investment which increases the value of properties. Further, this is a significant trend that has persisted over a majority of the time period under analysis.
“Therefore, the City of Crystal Lake finds that the Project Area is not subject to appropriate growth and development, and is not reasonably anticipated to be developed without adoption of this Redevelopment Plan.”
In rebuttal, the report states, “The basis for this conclusion relies upon the argument that the eligibility criteria necessary to qualify the area as ‘blighted’ under the TIF Act has been met. Specifically, the EAV for the proposed TIF, as a whole, has not increased as quickly as the EAV for the rest of the City of Crystal Lake for the last three of five years.
“Based upon a superficial comparison only,” the report states, “this eligibility criteria seems to have been satisfied. Although, the most recent EAV growth in the TIF area is almost identical (7.45% vs. 7.51%) to the rest of Crystal Lake.
“We don’t believe that a superficial comparison serves the intent of the TIF Act and, in this case, leads to a flawed evaluation. The recent documented $7 million sale of the Conlon-Collins Ford property, a property included in the TIF area, reflects the true value of commercial properties along the Rt. 14 corridor. Apparently, present assessment values do not necessarily reflect the true value of the commercial properties in the actual market place.
“The recent rapid development of the commercial property on Rt. 14, directly across from the commercial properties to be in the TIF, also documents that this is a highly desirable area. Real estate transaction records would provide further valuable insight into actual land values in the immediate Rt. 14 commercial corridor.
"Also, on Page 9 of the Teska report the consultant stresses the advantage that these properties have because of their proximity to the future lakes. 'Rather than attempt to modify the area for typical commercial development, the Redevelopment Plan intends to focus on the strength of these parcels; proximity to the lake.'
“Therefore, it is the JRB’s conclusion that the Teska report does not accurately reflect the true value of the commercial properties proposed to be included in the TIF area, and results in a flawed conclusion relative to this eligibility criteria. We do not believe this eligibility criteria has been satisfied.
“Finally, the Teska study concludes that there is virtually no impact created by the proposed TIF on School Districts #47 and #155, as well as the Crystal Lake Park District.
"There is little or no information provided by the Teska study to substantiate these conclusions. When asked to explain the financial impact on the schools and park district, or to provide the information in written form, Mr. Brown was unable to do so. We can only conclude that a thorough analysis relative to any impact on the school districts and park district has not been prepared as part of this study.
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“Specifically, the study states that one goal and objective of the Vulcan Lakes TIF is to:
“Encourage a diversity of housing types throughout the City which satisfy a wide-range of needs for all persons, regardless of age, race, religion, gender, national origin, physical ability, and economic level.”
”During the JRB’s discussion relative to the size, type, and estimated sales price range of the housing development planned around the Vulcan Lakes area of the TIF, Mr. (Lee) Brown (of Teska & Associates) acknowledged that the housing units would be exclusive in nature due to their close proximity to the lakes.
"Upon further questioning, Mr. Brown estimated that two-bedroom condominium units would be a minimum of $500,000. The remaining housing types to be constructed, including townhouses and single-family homes, would be in excess of that number, depending upon their exact location relative to the lakes.
“Clearly, the proposed development of exclusive lakefront or lakeview properties, costing $500,000 at a minimum, does not meet the plan’s stated objective to encourage a diversity of housing types regardless of economic level,” the report notes. “It is therefore the finding of the JRB that this stated objective of the plan has not been met.
“Further, relative to the findings of need for tax increment financing…, the JRB disagrees with the conclusion that:
“The City finds that the Project Area on the whole has not been subject to growth and redevelopment through investment by private enterprise, based on the physical condition and the lag in growth in property values as follows:
“The total Equalized Assessed Value (EAV) of the Project Area lagged that of the balance of the City of Crystal Lake in 2000, 2001, 2002, 2003, and 2004. Relative to the immediate surroundings, the Project Area has not experienced appropriate growth in the tax base or shown evidence of private investment which increases the value of properties. Further, this is a significant trend that has persisted over a majority of the time period under analysis.
“Therefore, the City of Crystal Lake finds that the Project Area is not subject to appropriate growth and development, and is not reasonably anticipated to be developed without adoption of this Redevelopment Plan.”
In rebuttal, the report states, “The basis for this conclusion relies upon the argument that the eligibility criteria necessary to qualify the area as ‘blighted’ under the TIF Act has been met. Specifically, the EAV for the proposed TIF, as a whole, has not increased as quickly as the EAV for the rest of the City of Crystal Lake for the last three of five years.
“Based upon a superficial comparison only,” the report states, “this eligibility criteria seems to have been satisfied. Although, the most recent EAV growth in the TIF area is almost identical (7.45% vs. 7.51%) to the rest of Crystal Lake.
“We don’t believe that a superficial comparison serves the intent of the TIF Act and, in this case, leads to a flawed evaluation. The recent documented $7 million sale of the Conlon-Collins Ford property, a property included in the TIF area, reflects the true value of commercial properties along the Rt. 14 corridor. Apparently, present assessment values do not necessarily reflect the true value of the commercial properties in the actual market place.
“The recent rapid development of the commercial property on Rt. 14, directly across from the commercial properties to be in the TIF, also documents that this is a highly desirable area. Real estate transaction records would provide further valuable insight into actual land values in the immediate Rt. 14 commercial corridor.
"Also, on Page 9 of the Teska report the consultant stresses the advantage that these properties have because of their proximity to the future lakes. 'Rather than attempt to modify the area for typical commercial development, the Redevelopment Plan intends to focus on the strength of these parcels; proximity to the lake.'
“Therefore, it is the JRB’s conclusion that the Teska report does not accurately reflect the true value of the commercial properties proposed to be included in the TIF area, and results in a flawed conclusion relative to this eligibility criteria. We do not believe this eligibility criteria has been satisfied.
“Finally, the Teska study concludes that there is virtually no impact created by the proposed TIF on School Districts #47 and #155, as well as the Crystal Lake Park District.
"There is little or no information provided by the Teska study to substantiate these conclusions. When asked to explain the financial impact on the schools and park district, or to provide the information in written form, Mr. Brown was unable to do so. We can only conclude that a thorough analysis relative to any impact on the school districts and park district has not been prepared as part of this study.
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# posted by Cal Skinner : 10:40 AM
