Lake County Gazette

The Mundelein Board of Trustees approved a redevelopment plan and a third tax increment financing (TIF) district last week and at least one trustee emeritus thinks TIFs are being overused.

“The problem with TIF districts is that Mundelein keeps putting money out but we don't ever recoup any of it,” said Dawn Abernathy, a former Republican trustee. “We haven't made a payment in a TIF disbursement to ourselves since 2013.”

The new TIF along Townline Road reportedly will improve properties on state Route 83 including Garden Fresh Shopping Center, Patriot’s Plaza, and the Oak Creek Plaza shopping center, according to media reports. The existing TIFs are downtown.

“One of the school districts wouldn't give the approval to extend the first TIF so that's why we had to create a second TIF district,” Abernathy told the Lake County Gazette. “All taxing bodies have to agree to extend the TIF. If they don't all agree then, obviously, you can’t extend an existing TIF but you can create a new TIF without their permission.”

Abernathy further laments about not receiving enough of a return on investment because the accounts connected to the two existing Mundelein TIFs are currently at a negative. In a TIF district, revenues generated from a property whose value has risen are deposited into an account for land purchases and improvements. 

“What's been happening is the village buys land and then gives it to a developer for a dollar and doesn't get the money for the cost of that property back, and this has been happening for years,” she said.  

Abernathy, who voted against creating yet another TIF district before her term ended, prefers the alternative in which a developer pays outright for and develops property.

“When the value of the property goes up, that money goes into a TIF account and it does increase the value of that property," she said. "But when a developer directly purchases the land and develops it, the value of the property also increases so a TIF is a way for the developer to get money back. It's just a way to incentivize developers. That's what TIFs are used for.”

TIFs are typically employed in blighted areas to finance redevelopment projects with the anticipation that the new development will lead to future tax revenue while taxation is frozen in real time for up to 23 years.

Glen Garamoni, owner of G&G Motors in Mundelein, has a vacant storefront on Maple Avenue that is in the old industrial area of downtown Mundelein, which is currently part of a 10-year-old TIF.

“TIF districts reward developers rather than the residents at large,” Garamoni told the Lake County Gazette. “TIF districts of Mundelein have been a failure as far as I can see. Why they want another one? I don't know."

The Chicago Tribune reported that the new TIF district’s value has been assessed at about $16 million. In 23 years it could reach $98.5 million.

“At least now we have a policy in place for TIFs,” Abernathy said in an interview. “We never had a policy in place for them before. The policy provides guidelines for TIF reimbursable costs."