McHenry County Blog

My nose for news was OK last night on my way home from the American Community Bank NFIB meeting between Congressman Don Manzullo and small business folks, but I didn't stop to take a picture.

At the stop sign at the top of the hill on East Crystal Lake Avenue, a small van had its lights blinking.

There was a policeman who walked around to the drivers' side.

As I was driving around the vehicle, a woman got out of it.

There was street work being done. The City of Crystal Lake is spending oodles of Tax Increment Financing property tax money taken from our schools, park district, county, county college, etc., to bury the electric and other lines along East Crystal Lake Avenue.

(For those who do not understand the TIF process, local tax districts like schools just raise their tax rates enough to make up for the revenue lost in TIF districts. If you are in a tax district in which the TIF lies—like McHenry County--your real estate taxes go up to make up for the revenue lost to the TIF district, which the city officials spend to subsidize developers in the TIF or make marginal improvements like burying utility lines.)

The money was just burning a hole in the city council member's pockets.

For some reason the song, “Girls Just Gotta Have Fun,” comes to mind, but it's the theme of the song, not the gender in the title that brings it to my frontal lobes. Three of the four “Yes” votes came from men, Mayor Aaron Shepley, who lives in the neighborhood, included.

Ralph Dawson joined Jeff Thorsen in voting against the expenditures. Cathy Ferguson wasn't present at the meeting.

But, back to the story.

It was pretty obvious the woman drover had some serious problem.

Today I went Downtown for a haircut after dropping my son off for his first half day of school and decided to walk down and see what I could find.

As you can see from the picture, there was a hole, which, almost certainly, was covered with a steel plate.

I talked to the supervisor, who told me he had never seen anything like it.

He speculated that someone had come up to the stop sign and put on the brakes, skidding on the steel plate and pulling it away from the hole.

Now that I think about it, it could just have easily been my old Cadillac whose wheel plunged into the uncovered hole as dusk was turning into night.

= = = = =

The top and bottom picture is of the hole being contemplated by city contractors yesterday morning.

You can see the old flower shop in the background from which we ran my 1996 primary campaign for state representative after McHenry County Republican County Chairman Al Jourdan put Cary county board member John Brehmer up to challenge me.

The middle photo shows East Crystal Lake Avenue between Williams Street and Walkup Avenue after utility wires have been buried. Beautiful isn't it? But the power lines in the foreground detract from the view. Maybe they will be next to be buried.

My last legislative office in 1980-81, in a room not being used by my father's Barley and Malt Institute, is the corner building at the intersection of South Williams and E. Crystal Lake Avenue...for you trivia buffs.

Labels: Downtown TIF, East Crystal Lake Avenue, Tax Increment Financing District, TIF

A good example of how governmental officials seem to think they are forced to spend every dime available was reported by Jim Butts in the Northwest Herald Thursday.

He wrote about where the last of the $4.3 million raised through the Downtown Crystal Lake Tax Increment Financing district would be spent.

$846,000 in this 23rd year and mercifully last year of the TIF district.

Such high priority projects the city council approved.

The Crystal Lake City Council agreed to put electric, telephone and cable lines underground on East Crystal Lake Avenue.

Boy, that would rank right up there with changing all the street signs in Crystal Lake.

Here's the sentence in Butts' story which epitomizes the “must spend” attitude:

“The majority of the council felt since the money was generated specifically by the TIF from downtown tax dollars, the cost for the improvements was justified.”

Spending the money from the TIF district will just force all the other tax districts to raise their collective levies by that amount.

Hey. It doesn't matter.

It's free money.

More of it is going to trash cans and benches, replacing streetlights and tree gates. (In case they want to escape?)

Ralph Dawson joined Jeff Thorsen in voting against the expenditures. Cathy Ferguson wasn't present at the meeting.

Labels: Crystal Lake, Jeff Thorsen, Ralph Dawson, Tax Increment Financing District, TIF

Yet.

Because of a compromise I made in the 1970's in Springfield, real estate assessments are not based on current market value.

Or even last year's market value.

Representatives from the Illinois Agriculture Association in the first floor committee meeting room next to the main stairway argued that using just one year would be unfair to farmers who sold their land to a developer. A recreational development in Jo Daviess County was the example, I think.

The Farm Bureau lobbyist suggested using a three-year average.

Against my better judgment, I agreed.

The result is the three-year average to determine the value of properties...except farms

The farm lobby got exempted from the market value standard, getting legislation enacted that valued agriculture property according to productivity.

That means, of course, that farm land is assessed much, much lower than homes and businesses. It's the reason that developers grow corn on their empty land.

Lower, much lower taxes than if based on what the developer paid for the land.

But, back to the topic at hand.

The Illinois Association of Realtors, now headed by Crystal Lake Realtor Kay Wirth, who is with Re/Max Unlimited Northwest, compiles home sales data.

The latest month's information shows the median price dropped 4.3% in McHenry County compared to a year ago.

Strangely, Kane County prices went up 1.1%; Lake County's increased 3.4%.

Because of the three-year average definition used in assessing property, that does not mean your assessment will be cut an average of 4.3%.

The average March McHenry County home's prices for the last three years follow:

2008 - $242,392
2007- $250,180
2006 - $258,437
2005 - $243,595
2004 - $230,294

By next year's tax bills (not next month's, but next year's) you might think that assessments should fall.

Averaging out 2004, 2005 and 2006 prices shows an average price of $244,000.

For 2005, 2006 and 2007 the average is $250,000

The average is also $250,000 for 2006, 2007 and 2008.

So, the average for next year's bills seems to be higher than the average for last year's tax bill, but the same as for this year's bill.

I wouldn't be expecting a cut in assessed value next year.

BUT, even if the average were lower, that would not mean your tax bill would decrease anymore than increasing assessments mean it will rise.

I know that is counterintuitive, but the property tax cap, which has been in effect since the early 1990's, has resulted in tax districts being forced to lower their tax rates.

The tax cap legislation limits the growth of a tax district's revenues to the increase in the cost of living (CPI), plus taxes on new construction.

With assessments increasing more than the Consumer Price Index for a long, long time, that meant tax rates had to decrease.

The result is that probably every tax district with a tax rate limit now is below that limit.

So, with a lower assessment tax base, the districts will just raise their tax rates enough to be able to capture whatever the increase the CPI shows.

Added to that will be whatever tax increment financing (TIF) districts pull out of the tax base. Same reasoning as to what will happen to the tax rates.

= = = = =
The map is from the April 23, 2008, Chicago Tribune.

Labels: Farm Bureau, Illinois Agriculture Association, Illinois Association of Realtors, Kay Wirth, Re/Max Unlimited Northwest, Tax Cap, Tax Increment Financing District, TIF

The following resolution was passed 6-0 by the Cary Grade School District 26 Board of Education Monday night. My thanks to board member Chris Jenner for sending it to me.

Hard to imagine, but these local educators don't want the Illinois General Assembly to hike income taxes 67% and send the “free money” back to them to spend.

Jenner says that Palatine School District 15 passed pretty much the same resolution on April 9.

Here is the resolution, which other emboldened school board members might present to their colleagues for approval:

A RESOLUTION ADVOCATING AGAINST SB2288 and HB750

A RESOLUTION to send a letter to the Illinois state elected officials listed below, advocating against Illinois Senate Bill 2288 and Illinois House Bill 750.

WHEREAS, the Cary Community Consolidated School District 26 Board of Education is responsible for advocating to the Illinois state elected officials representing the District 26 attendance area in matters related to education and impacting District 26; and

WHEREAS, HB750 and SB2288 propose raising the personal income tax rate from 3% to 5%, a 67% increase, and propose raising the corporate income tax rate from 4.8% to 8%; and

WHEREAS, the proposed property tax relief (if enacted) provides only a 20% reduction on the education portion of the property tax payers’ bill, and there are no restrictions preventing an increase in local property tax rates or redirection of the property tax abatement fund; and

WHEREAS, with a slowing economy and increasing prices, an increase in taxes will adversely affect the District 26 community, families and businesses and adversely affect the tax base that supports education in District 26; and

WHEREAS, of the $8 billion estimated to be raised by SB2288 and HB750, only 7.5% will go to education, 36% will go to property tax relief, and the remaining 56.5% will go to fund state debt, road construction, state employee pensions and unpaid Medicaid bills, which do not benefit education; and

WHEREAS, the proposed increases in state funding for education under HB750 and SB2288 will only provide a small increase in the state funding that District 26 actually receives; and

WHEREAS, shifting substantial portions of District 26 revenues from a steady property tax base under local control, to a less reliable income tax base under State control, undermines the idea of local control of education; and

WHEREAS, we believe that under HB750 and SB2288 the District 26 attendance area will send more tax revenue to the state than it will receive from the state, providing less tax base to support education in District 26;

NOW, THEREFORE, BE IT RESOLVED BY CARY COMMUNITY CONSOLIDATED SCHOOL DISTRICT 26 BOARD OF EDUCATION THAT:

We urge the Illinois state elected officials representing the District 26 attendance area to oppose SB 2288 and HB 750, as we believe it will adversely affect local control of education, provides a less reliable form of education funding for District 26 and will reduce the tax base available to support education in District 26 by increasing the State tax burden on District 26 families and businesses.

Approved this ___ day of April 2008


CRAIG LOEW
President, Board of Education, Cary Community Consolidated School District 26

Missing was school board member Steve Bush. He recently had rotator cuff surgery and is still under medication, Jenner advises.

= = = = =
Cary Elementary School District 26 Board member Chris Jenner is seen fighting the Village of Cary's Route 14 Tax Increment Financing district.

Labels: Cary Elementary School District 26, Cary Grade School Board, Chris Jenner, Criag Lowe, Steve Bush, Tax Increment Financing District, TIF

You may remember I was not at the October 10, 2006, Crystal Lake city council meeting when Mayor Aaron Shepley and his city council colleagues picked Bill Cellini's consortium to take on the over $100 million Vulcan Lakes Tax Increment Financing project in October 2006. (The project could be worth only $30 million, if you believe the council only planned to borrow that amount, as this story indicates.)

I would have recognized Cellini, because I worked for him in the 1971 Springfield mayor campaign of Denny Kelley. Kelley lost by about 2-1 to Sangamon County Coroner William Telford.

Mayor Shepley's and the city council's selection of Cellini was made just days before Cellini was implicated in the Tony Rezko corruption case.

There must have been some very worried city hall folks when they saw the news stories the end of the second week of October in 2006.

By October 31st, Cellini had announced his withdrawal from the Vulcan Lakes TIF project.

The consortium is of continuing interest to columnist John Kass.

So, since the only YouTube display of Cellini's persuasive abilities was posted by McHenry County Blog from the video recording of his city council exchange with Mayor Shepley right before being awarded the huge contract, I thought you might like another chance to watch it.

Actually, there are two versions.

A short one, which is below.



And one that puts the short one into context, which follows.



Astoundingly, this interchange about the possibility of condemning the old Cub Foods-Walmart Shopping Center, into which J.C. Penney's has announced it will move, was after the condemnation suits against Vulcan had already begun.

The Cellini TIF meeting was held in October, 2006, but Crystal Lake's suits were filed in August, 2006.

In the story about Cellini's role in the TIF project, Shepley told Northwest Herald reporter Karen Long,

“Our mission, our goal was to make sure that no matter who we ended up picking in this whole affair, we want to make sure the process with respect to Mr. Cellini was absolutely transparent.”

So, how did Cellini learn of the Crystal Lake TIF project?

How did his consortium manage to win approval of Mayor Shepley and the city council?

Keely Cat's whiskers positively twitch in curiosity wondering what the answers to those questions are, plus why Mayor Shepley decided to raise the Crystal Lake city sales tax by 75%, using developing Vulcan Lakes as one of the excuses.

So what brings me to write this story?

Sun-Time columnist Mark Brown wrote a column Thursday headlined,


And, at the bottom,


The column points out,

"Cellini is still only an unindicted co-conspirator though the reason he remains unindicted is even more of a mystery after listening to the tapes."

Here's where you can read what Cellini and Levine said in their May 7, 2004, phone conversation.

And, here's the May 8, 2004, follow-up phone call.

Nothing about Crystal Lake, of course.

And, of course, neither Cellini nor Shepley have been charged with any crime.

Labels: Aaron Shepley, Bill Cellini, Denny Kelley, Tax Increment Financing District, TIF, Vulcan Lakes, William Telford

If you want to see the future of Crystal Lake Tax Increment Financing Districts, you need look no farther than McHenry.

In a new blog run by the Northwest Herald, McHenry Blog, Jillian Duchnowski reports condo developer Curtis Commercial wants

“$200,000 more in incentives to build a complex with 27 condo and 12 retail spaces downtown.”

The developer of property, right across the creek from the movie theater, has “discovered” that the cost of building a parking deck is a couple of hundred thousand dollars more than the firm expected.

So, where does the developer think the extra money should come from?

That honey pot called the Tax Increment Financing fund.

The City of McHenry has already committed itself to shelling out $2 million in incentives “to boost a project that otherwise wouldn't be profitable.”

The article continues:

”The value of those incentives is similar to what the city offered Cunat Inc. for a similar project proposed across the street.”

Am I the only one who has a problem with this concept?

The same thing has happened in Elgin, by the way.

How long before the Crystal Lake City Council follows suit?

Oh, I forgot.

Crystal Lake is going to use its 75% hike in sales tax, plus TIF money to bail out developers of choice.

Labels: Cunat, Curtis Commercial, McHenry, McHenry Blog, Tax Increment Financing District, TIF

With a mere one week's notice to the public, the Crystal Lake City Council voted 6-1 to raise the city's sales tax from 1% to 1.75%--a 75% increase.

Only Councilman Jeff Thorsen voted, “No.”

Arguing that having a lower sales tax than Algonquin had not kept shoppers in Crystal Lake, the council majority followed Mayor Aaron Shepley's lead.

“If you keep doing what you did, you'll keep getting what you got,” Shepley asserted in his summation right before the vote. "The only truly bad decision would be to take no action.”

Shepley denigrated Governor Rod Blagojevich as being “absolutely ridiculous,” pointing out that the Democrats had one-party control in Springfield “and they still can't figure it out.”

I couldn't figure out what this had to do with the discussion at hand. Maybe you can.

Expecting heat, as did the other five who voted, “Yes,” Shepley pointed out that unlike the Springfield politicians with their salaries and their pensions, members of the city council “barely” get paid an amount that “covers the cost of elections.”

He predicted that the tax hike would “make half of the people angry.”

Explaining that people think “government should be run like a business,” he pointed out that “there not too many businesses out there” that haven't raised “their prices to keep up with inflation.”

What Shepley did not point out is that as the price of food and other items purchased at retail stores increase, so does the sales tax take. Same with property taxes increasing with home value, of course, although several officials stressed the city's lack of a corporate fund (which doesn't seem to me to be the same as having no city property tax at all).

Shepley pointed to other cities that have had to go to referendum to raise taxes.

Of course, home rule cities like Crystal Lake, don't have to go to the voters to raise taxes, as was proven last night.

“So, there's no waste.”

That is a bold assertion for the only unit of local government that still replies to my Freedom of Information requests with high cost certified letters.

I consider that pure waste. (And I think the postage you can see above, if you click on the image, was before postal rates went up.)

The most discussion was over a piddly extra $100,000 for economic development. Chamber of Commerce Executive Gary Reece and the head of the city EDC made a big deal about it, as did some city council members.

That's 2% of the $4.7 million that the 75% sales tax hike is expected to raise in the first twelve months.

If the city fathers and mothers want to squeeze $100,000 out of the current budget, they ought to be able to do it. (If they want to hire this ex-U.S. Bureau of the Budget budget examiner and holder of a master's degree in public administration from the University of Michigan to do it, I'm available.)

Shepley and others made pitches for the poor shape city streets are in and how part of the sales tax increase would go for repaving. Several pointed out the increased cost of motor fuel increased the cost of asphalt, too. (They did not point out that the higher prices at the pump increased the city's sales tax take, however.)

Arguments were made for hiring four more city policemen because the city is slightly under the national average.

Relocating the railroad tracts to open up now landlocked potential retail space also drew support.

There was a lot of fancy footwork defending the development of Vulcan Lakes into a recreational area as a reason for the sales tax hike.

In terms of “need” versus “desire,” it seems to me that Vulcan Lakes is clearly a “desire.”

Shepley admitted as much:

In terms of pure necessity, the toughest call is Vulcan Lakes.”

After talking to the local chapter of AARP, Shepley brought this away,

“They'd be very interested in having Vulcan Lakes open.”

Banker Thorsen's take:

"I firmly believe that project can fund itself."

The mayor argued that at least a sales tax puts “people in the position of being able to choose.”

“You can choose (to shop) at Super Walmart and Menard's in Woodstock.”

Opposing the tax hike were two people.

The first was Joe Cramer of South Oak Street.

Retried, Cramer pointed out that he and others similarly situated were on fixed incomes.

Alluding to the recession, he cautioned that people would be facing the higher sales taxes while they might be under the treat of losing their jobs.

Finally, he pointed to the rising rate of inflation, shown by $3.35 cent per gallon gasoline and a threatened 2% hike in electric rates in June.

He also brought up what he called the “CTA sales tax.”

Combining that—which goes into effect April 1st—with the city tax hike, the total sales tax will inc increase 19% in Crystal Lake.

“It's pretty steep,” he said. “I think you gentlemen and ladies should put this on ice. It will lead to the disuse of the retail (sector) in Crystal Lake.”

I was the only other opponent.

I pointed out that the city's own TIF consultant had said

• that Vulcan Lakes would produce over $100 million in subsidies,


• that the railroad relocation costs should be borne by the two land owners who were going to benefit from direct access to Main Street,


• that the Main Street Tax Increment Financing district was created to finance part of the track relocation,


• that the McHenry County Conservation District could be subject to pressure from the Crystal Lake area (which has paid upwards of one-fourth of the MCCD taxes, but gotten as close to zilch as is imaginable) to develop Vulcan Lakes, if the city fathers and mothers would agree to allow use by those who not Crystal Lake residents,


• that I would be happy to help put pressure on the MCCD if the council decided to go that route (I handed out this article),


• that the one week between the announcement of the consideration of the tax hike and the vote did not allow adequate public input, and


• that the city council was reminding me of the McHenry County College board approved the baseball stadium without public input.

Chamber of Commerce exec Gary Reece noted that he was happy that Jeff Thorsen had beaten him by 24 votes when he ran for city council.

Reece said that there had not been time for the Chamber to take an official position, but, “Based on the feedback we received from some of our members,” he favored passage.

He waxed eloquent about the extra (he stated that he hoped it was extra) economic development money—the $100,000 referred to above.

Reece even hinted at a new TIF district to build a parking garage Downtown.

But, he concluded,

“Not all of our members are behind this proposal.”

The Carpet One store owner (I didn't catch his name) at 5186 Northwest Highway in Crystal Lake, who is head of the city's Economic Development Commission, argued for the tax hike.

“I got a positive response from 6 or 7 members,” he said. “I believe in this tax proposal. I think it should go through.”

Tomorrow, what the council members said.

= = = = =
The pictures of Crystal Lake Mayor Aaron Shepley on top were, from left to right, just before he voted to raise the Crystal Lake sales tax 75% and just afterwards.

The rest of the six-member coalition who supported the tax increase are seen below. On the first line are Dave Goss, Ellen Brady Mueller and Ralph Dawson. Below them are Brett Hopkins and Cathy Ferguson.

Images of one of the many certified letters that Crystal Lake continues to send me about my Freedom of Information requests and a drawing of what the Vulcan Lakes project might look like follow.

Below is Councilman Jeff Thorsen, the only negative vote.

Next is Joe Cramer, the Oak Street resident who spoke against the tax hike.

To the left of my comments is a picture of the Main Street Station Tax Increment Financing district project which will be one of the biggest beneficiaries of relocating the Main Street railroad spur.

Below is a picture of Crystal Lake Chamber of Commerce President Gary Reece.

In the photo credits is one of the slides used to try to justify the 75% sales tax hike.

All images can be enlarged by clicking on them.

Labels: Aaron Shepley, Crystal Lake, Crystal Lake Chamber of Commerce, Gary Reece, Jeff Thorsen, Main Street Station, MCCD, Sales Tax, Tax Increment Financing District, TIF

There is an alternative to the recreational development of Vulcan Lakes.

And this isn't the first time I have pointed it out. I suggested it October 30, 2005.

I don't think I can improve upon that over two year old advice, so I'll just reprint it:

Sunday, October 30, 2005
Another Way to Finance Vulcan Lakes Improvements:
Let the McHenry County
Conservation District Do It

There is one clear method through which improvements to Vulcan Lakes could be financed.

The City Council could just ask the McHenry County Conservation District to take over the property.

It could be rented out on a long-term lease, with whatever development and use goals the City would want to write into the contract.

The MCCD has cost Crystal Lake area taxpayers dearly since its inception. Millions of dollars have been taken out of the pockets of local taxpayers, but precious little has been spent in the area.

That’s because the Crystal Lake Park District is the grand-daddy of McHenry County Park Districts and has provided ample park land for the public to enjoy. As a result, the MCCD has bought land elsewhere…far away from the population center of McHenry County.

Thousands of acres have been purchased in other parts of McHenry County, but precious few in the Crystal Lake area.

Crystal Lake’s most prominent MCCD element is probably the bike trail along Main Street. Recently a couple hundred acres has been bought west of West School, but is not open for public use. There is a large facility with a Crystal Lake address way east off of Route 176 near Burton’s Bridge and the Lake-in-the-Hills Fen, but nothing really big in or with direct access to Crystal Lake.

Improving and administering the Vulcan Lakes property would allow the Conservation District to repay a small part of the millions that have been taken from local wallets.

But, the Crystal Lake City Council would then have to allow residents from throughout McHenry County to use the lakes.

And, sharing this resource that has cost so many of us to lose car windows and dinged paint from stones thrown from gravel trucks and extra travel time on Route 14 because of the abandonment of Three Oaks Road is not part of the plan.

I have pointed out elsewhere that I have been told that the traffic on Route 14 increased 10% the day after Three Oaks Road was closed. That would argue for a sharing of the benefits resulting from that closure, along with a sharing of the pain of the increased road congestion.

The $23 million proceeds (over 20 years) from the waste transfer station could also have been earmarked to develop Vulcan Lakes.

citizens who don't want the city council to raise the city sales tax 75% should email each of them.

• Ralph Dawson,
• Cathy Ferguson,
• Dave Goss,
• Brett Hopkins,
• Ellen Brady Mueller,
• Aaron Shepley, and
• Jeff Thorsen

at comments@crystallake.org.

Put the council member's name in the subject line of each email or put all of their names on the subject line, as some people are doing.

= = = = =
All of the images can be enlarged. Except for the Route 14 traffic shot near Walgrens, the pictures are of the Vulcan Lakes property. The top one was taken from Rakow Road; the other two from Pingree Road. The sunset was taken from across where the outdoor movie theater used to be. The other one across from G.K. Welding at 915 S. Pingree. I took the latter while waiting for the chair I am sitting on to be welded back together. There's a picture of the process which human eyes cannot see without a shieldhere. The map is of the current McHenry County Conservation District sites. It's pretty obvious that the Crystal Lake area has been left out, isn't it?

Labels: Crystal Lake, MCCD, McHenry County Conservation District, Sales Tax, Tax Increment Financing District, TIF, Vulcan Lakes

To its credit, the Northwest Herald has covered the one week between the announcement by Crystal Lake Mayor Aaron Shepley and his city council majority of a major tax hike and the announced final vote with more than one story.

And, there are so many more stories to be written on this pending permanent plundering of Crystal Lake shoppers.

Remember the Vulcan Lakes Tax Increment Financing district.

That has a special meaning to me, because it is what pushed me over the edge to launch McHenry County Blog.

It's not bad enough that the Crystal Lake City Council guaranteed that our (and “our” refers to every property owner in McHenry County) real estate taxes will be higher than they otherwise would have been with the passage of each TIF district, now they plan to add insult to injury by raising the city's one percent sales tax to one and three-quarters percent.

That's a 75% tax hike to those of that passed junior high math.

The Northwest Herald's Thursday article by Jim Butts informs us that a big part of the money will go to jump start the Vulcan Lakes TIF district.



It doesn't tell us that the reason for the 75% sales tax hike is to subsidize what the hand-picked developers of the Vulcan Lakes TIF district were supposed to do. The city's consultant predicted that $115 million would be available over 23 years for Vulcan Lakes..

But, that's apparently not enough.

Butts reports City Manager Gary Mayerhofer said (in an indirect quote):

”If the tax increase is approved, the city would borrow $10 million and use the estimated $4.6 million generated annually by the tax increase to pay down the debt.”

Of course, the subsidizing of developers is what a TIF district is all about.

And, there's this business downturn, don't you know.

But we can't let a recession stand in the way of the political calendar, can we?

City council elections come every odd-numbered year.

That's about a year from nows.

Funneling $10 million into Vulcan Lakes between now and then probably won't convince people that it is a good investment, but by three years from now, when Mayor Shepley is up for re-election, there might be something to show for the money.

And, he will surely hope that people will have forgotten his staring role in the 75% city sales tax hike.

By then, the city will have put in motion two sources of tax subsidy money for its favored developers. This may be a first in Illinois municipal history.

A first I would rather not have to have happening in my home town. (No, I wasn't born here. My family moved here in 1958. I was sixteen. We built the junior class Homecoming float where we lived at 100 W. Crystal Lake Avenue, before moving to 800 Broadway in Lakewood.)

“We now have a lot more flexibility to do precisely what we want,”

Shepley told Butts.

Using other people's money.

That's the way to go.

Labels: Aaron Shepley, Gary Mayerhofer, Sales Tax, Tax Increment Financing District, TIF, Vulcan Lakes

Despite promising not use its condemnation powers to obtain land from the Vulcan Lake/Route 14 Tax Increment Financing district, the Crystal Lake City Council voted Tuesday night to pay Vulcan Materials $120,000 an acre to settle such a suit.

$1.8 million in total.

When the TIF district was first being discussed, yours truly asked the council how they were going to develop the property without having road access to it. McHenry County Blog even had a story on the problem.

The council sat mute.

While the city owned part of the road where the old train engine used to be at the entrance on Route 14, the farther back toward the gate that one went, the less of the road the city owned. At the gate between Harris Bank and Crystal Lake Tire, if my memory serves me correctly, city ownership was restricted to less than two feet of the road.

Vulcan traded the pit for permission to mine under Three Oaks Road, something that the Algonquin Township Road Commissioner Del Miller had refused to do as long as that road was under his jurisdiction.

The day after the road was closed, I have been told the traffic on Route 14 went up 10%.

By not including key parcels in the deal it cut with the city back some twenty years go, Vulcan stockholders will be $1.8 million richer as a result of Tuesday's city council decision.

I had not looked at the council agenda when I linked Monday to all of my articles on Mayor Aaron Shepley's repeatedly promising that the city would not use its eminent domain power against Vulcan Lakes TIF property owners.

Let's look at the denials that condemnation suits would be filed.

The first time I heard Crystal Lake Mayor Aaron Shepley said no condemnation was November 2, 2005. That was the night of the TIF hearings for the Main Street and Vulcan Lakes projects. Here’s what he said:

"I can say this. At no time has this city council considered…using our condemnation authority in any TIF we have contemplated. If property owners have that concern, they are false."

Thanks to the DVD of the October 10, 2006, City Council workshop meeting, I can provide you with Shepley's words and, for five bucks, you can see him speak them:

"We already promised we would not use condemnation in this project."

The then two-term lawyer-politician couldn’t have gotten much clearer than that, could he?

But it gets better.

January 8, 2006, the Northwest Herald quoted Shepley:

"I stand by what I said before.

"The answer then, and is now, no…. People on Route 14 should not be concerned. It was not our plan in creating the [tax increment financing] district necessarily to go on some sort of condemnation binge. Nothing about that has changed."

The cut line under Shepley's picture in the NW Herald said,

"Aaron Shepley, Crystal Lake Mayor said the city would not condemn private property."

October 10, 2006 Shepley had this conversation with Springfield-based developer Bill Cellini, who, according to his hometown paper is mentioned in the Tony Rezko indictment.

Here's what was said:

Cellini - "I don’t believe that we can right out of the box say that’s something that could be acquired by our group, unless, of course, the city is interested in, in, in acquiring it."

Shepley - "No, we already promised we would not use condemnation authority for this project, (chuckle) so, ah"

Cellini - "I don’t think you would have to use condemnation to probably (chuckle) buy it,"

Shepley - "Right."

Here's the long version:



But, it gets better.

January 2, 2007, Daily Herald reporter Chuck Keeshan discovered three condemnation suites against Vulcan Lands, Inc., at the McHenry County courthouse?

Three condemnation suits against Vulcan Lands, Inc. on, catch this, August 8, 2006.

Before what I think was the last time Shepley promised there would be no condemnation suits.

Shepley told reporter Keeshan that the land needed to gain access to the Vulcan Lakes project was “pencil-thin.”

As I mentioned above no one can say Crystal Lake officials did not know about the Vulcan Lakes access problem before the Tax Increment Financing district was contemplated.

But why did Shepley repeatedly insist there would be no condemnation?

Labels: Aaron Shepley, Algonquin Township Road Commissioner, Del Miller, Tax Increment Financing District, TIF, Vulcan Lakes

Contrary to what some children think, money doesn’t grow on trees.

If you want to build something, people have to come up with the money.

This headline in Tuesday’s Chicago Sun-Times caught my attention.

It puts Tax Increment Financing Districts into perspective.

%75 mil. Windfall for Rush?

Where do you think that “windfall” will come from?

It will come from taxpayers all over Chicago and Cook County.

That’s because area tax districts will raise their tax rates in order to make up for the income they are losing to Rush.

Similar income transfers from current taxpayers to TIF district beneficiaries is occurring in McHenry County.

Labels: Rush University Medical Center, Tax Increment Financing District, TIF

In the


category is state officials considering that state taxpayers might buy Wrigley Field.

That’s what immediately came to mind when I saw the teaser on the top left of the front page of Thursday’s Chicago Tribune.

Is this some trade-off in which the Tribune would agree to support Governor Rod Blagojevich for a third term, if he rushed to the rescue of the Tribune?

I heard on the radio, but didn’t listen to carefully, that for the deal to sell the Tribune to go through, the company has to get rid of the Cubs operation by the first of the year.

Some of you know that I’m not a sports fan.

I figure politics has pretty much the same elements as sports, but could cost me money. Only rarely does sports cost me money.

I can think of state government’s building the new White Sox stadium. I can think of McHenry County College’s trying to put us taxpayers at risk by building a minor league baseball stadium for investors unknown.

So, I didn’t toss the Sports section on the floor for re-cycling today. I’m actually reading a story in it. Maybe it belongs in the business section of the paper.

“It is unclear how the state and ISFA (Illinois Sports Facilities Authority) would raise funds for such a purchase, which would fetch hundreds of millions if sold,” Jim Kirk's article says.

But it’s not just state taxpayers who would be at risk, the Tribune Company is talking to Mayor Richard Daley, too.

I can hear another big Tax Increment Financing district rolling through city council on this one.

Take the money from Chicago schools. Only the Chicago Reader will figure it out and they are laying off a higher percentage of reporters than the Tribune now that personals can be found on the internet.

And why would the Tribune want to sell the ballpark to the state?

To shift renovation costs from the Cubs prospective buyer. That would increase the price paid for the team.

There’s certainly something shifty here.

In my grad school public finance class at the University of Michigan, it was discussed in the class on incidence. It was about who really pays the cost of something.

With “public-private partnerships” all the rage, why wouldn’t the Tribune think the taxpayers would bail it out?

After all, when the Cubs finally do get to a World Series, wouldn’t all the (well, maybe, not the Cardinal fans) legislators want tickets?

I remember when the White Sox were almost in the World Series in the 1990’s, I had the opportunity to buy tickets for the play offs at face value.

That inducement would probably be enough to get state legislators to vote for such a deal.

= = = = =
The picture of Wrigley Field came from a State of Illinois taxpayer financed web site.

Labels: Cubs, Illinois Sports Facilities Authority, Rod Blagojevich, Tax Increment Financing District, TIF, White Sox, Wrigley Field

I never cease to marvel how municipalities seek to emulate the way Mayor Richard Daley has raped the tax base with Tax Increment Financing districts.

A TIF’s creation allows cities and villages to get all the benefit of growth for 23 years, although the General Assembly has increased that length in at least Peoria TIFs.

East Dundee residents who want to object may do so Tuesday night at the Village Hall Annex.

The TIF’s creation will raise the taxes of everyone in Carpentersville District 300, regardless of what village officials say.

The November 11th Rebecca O'Halloran article in Elgin’s Daily Courier News that inspired this post is here.

Labels: District 300, East Dundee, Tax Increment Financing District, TIF

The Northwest Herald is running an article about the Vulcan Lakes Tax Increment Financing district.

Although Mayor Aaron Shepley promised there would be no condemnation of property in the Vulcan Lakes TIF district, there was. And eminent domain court action was taken before he said this to developer Bill Cellini during the questioning of potential developers of the property.

Here are his November 2, 2005, words:

“I can say this. At no time has this city council considered…using our condemnation authority in any TIF we have contemplated. If property owners have that concern, they are false.”

You can Shepley in his own words on this YouTube video:


If you want a longer version to put it context, click here.

And you can a Shepley photo with this cut line found in the Northwest Herald on January 8, 2007.

The title to McHenry County Blog’s January 18, 2007, article pretty much tells it all:

“What Was He Thinking? Mayor Aaron Shepley Votes for Condemnation Before He Opposes It”

On January 30, 2007, Shepley was still repeating his “No-o-o-o Condemnation” mantra.

Now, reporter Liz Wolgemuth quotes Shepley thusly:

“The property we’ve condemned is pretty critical to access.”

Right.

I pointed that out to the council during the TIF considerations. Vulcan still owns part of the entrance road where the train engine used between Harris Bank and Crystal Lake Tire. By the time one gets to the gate, the city owns maybe a foot or two of the road.

I asked them council members if they knew that, but got no reply.

Labels: Aaron Shepley, condemnation, Crystal Lake, Route 14, Tax Increment Financing District, TIF, Vulcan Lakes

A Tax Increment Financing district proposed by West Dundee for the corner south of Spring Hill Mall is moving forward.

That's what Elgin's Courier News reporter Rebecca O'Halloran wrote about Tuesday.

As McHenry County Blog pointed out early in its existence, virtually any property can be qualified for TIF district subsidies.

Our home in Lakewood, complete with major 1998 addition, could be declared “blighted” for TIF district purposes.

Our home does not meet current building requirements. The headroom for the stairs to the second floor is not high enough. I guess people were shorter in the 1920's than they are now.

That’s just one of the many flaky criteria that could lead to a property being declared "blighted."

In any event, if Huntley’s Prime Outlet Mall could be put in a TIF district when it was an empty field, truly anything could be declared eligible.

The problem is that such TIF districts push up tax rates on everyone living outside the district.

Crystal Lake Grade School District 47 Superintendent Ron Miller pointed out that tax shift to Crystal Lake authorities.

He told the city council that his school district would not lose any money if Crystal Lake froze real estate assessments for his district and other local tax districts.

That’s because District 47 and my guess is all other tax districts are beneath their maximum tax rates.

That’s because assessments have increased faster than the Consumer Price Index virtually every year since the Property Tax Cap went into effect in the early 1990’s. When that occurs, a tax district’s tax rate is forced down.

In the case of West Dundee, School District 300 will not lose any money if West Dundee’s proposed tax district passes.

The losers will be all of District 300’s taxpayers located out of the tax district.

So, is District 300 fighting to keep its homeowners’ tax rates down?

Not like the Richmond Nippersink Grade School District put up when the Village of Richmond tried to put most of downtown, plus a lot of a golf course in one.

West Dundee’s presentation of its consultant’s study will occur on August 18th at Village Hall.

At that time representatives of all local tax districts are allowed to vote to disapprove the TIF district.

All such an action would do, however, is force the West Dundee Village Board to obtain an extraordinary majority to approve the TIF district.

On August 20th a public hearing will be held at Village Hall, starting at 7 PM.

Labels: District 300, Tax Increment Financing District, TIF, West Dundee

The village government of Cary is now officially in the real estate business.

It has paid $725,000 to purchase 132 feet of Route 14 and 127 feet on Second Street.

The three buildings, two of which are being demolished, bear East Main Street addresses.

The previous owner sold them last December to the Village of Cary.

They were purchased in 1996 for, west-to-east, for $140,000, $76,000, and $108,000 respectively.

A total of $324,000.

I don’t know how much real estate has apprecia

= = = = =
On top you can see the lots where two houses were demolished last last week, plus a close-up of the Langos Corp. banner. Langos is the demolition company. Below is the third house bought by the Village of Cary, which remains up because of a lease that has not run out, I'm told. Thanks to a friend of McHenry County Blog for the pictures.

Labels: Cary, Demolition, Langos Corp, TIF

The developer paid $17 million for the northwest corner of the intersection of Routes 31 and 72, but he needs a subsidy from District 300 taxpayers to make the “Fashion Corner” work.

By anyone's definition, this is a prime retail corner.

It appears from Rebecca O’Halloran’s Elgin Courier-News article that West Dundee’s elected officials agree. They have authorized a study to see if a Tax Increment Financing district could be former.

While the study is required by law, the law will allow even vacant farmland to be put in a TIF district (think Huntley’s mall), so that such a study will find that a TIF district could be formed is a foregone conclusion.

While it is obvious who the winner will be, it is less obvious who will be the losers.

City officials will probably echo Crystal Lake Mayor Aaron Shepley.

He insisted Crystal Lake’s TIF districts would not raise anyone’s taxes.

Persuasive arguments were made by Crystal Lake Grade School District Superintendent Ron Miller, however.

He pointed out that his school district would not lose any tax dollars, but only because its tax rates were below their maximums because of the effects of the Property Tax Cap.

That meant that the school board would get the maximum allowed under the Tax Cap by raising its tax rate on all other property owners in its district.

In the Crystal Lake City Council debate, some councilmen agreed that there would be a tax shift. If you read the linked article, you will see that District 47 ended up neutral, but that was because it got significant monetary concessions.

And this threat to raise the taxes of homeowners did not just surface in West Dundee.

The Daily Courier also has an article by Dave Gathman about a proposed TIF in South Elgin.

Could this be an opportunity for proponents and opponents of last year’s referendums to come together on an issue?

School boards have some, but not much influence in the process. If they lobby other local governments, whose taxpayers would also have their bills rise because of the 23-year tax shift, the board might obtain enough votes in the Joint Review Meeting to require a 2/3-approval vote of the West Dundee Village Board.

They could even follow the hard ball lead of the Richmond Grade School Board. It sent a mailing attacking a Tax Increment Financing district to every household in its district.

Richmond Township government even joined in.

The Richmond School District won that fight, by the way.

Labels: Richmond, Tax Increment Financing District, TIF, West Dundee

Just like Crystal Lake, Mt. Prospect is trying to create an entertainment district.

Just like Crystal Lake, Mt. Prospect is using condemnation powers it got from authorizing a TIF district.

In Mt. Prospect, the village authorities are after a home on Route 14 that has been used as a law office since 1966. It's in the tax increment financing district.

In Crystal Lake, Mayor Aaron Shepley and the city council are seeking to condemn property owned by Vulcan Materials without which Crystal Lake does not have access to the Vulcan Lakes property it got from Vulcan Materials low those many years ago…even though the mayor promised not to.

= = = = =
The picture is taken from Rakow Road of the main Vulcan Lake.

Labels: Aaron Shepley, Crystal Lake, Mt. Prospect, Tax Increment Financing District, TIF, Vulcan Lakes

On March 31, 2007, McHenry County Blog has a story entitled,

Zoning Race for 500 Employee Chemtool Facility

In it, Chemtool Jim Athans said,

“We’re not looking for tax breaks, TIF districts, we just need zoning.”

He owns land in three potential locations:

• Garden Prairie next to Route 20,
• a Marengo-area location 1 mile west of the old Shady Lane Theater on Route 20, and
• Sharon, Wisconsin.

I got the impression that wherever he gets zoning first will snag Chemtool.

But, maybe not.

When I called the Boone County Building Department to ask if an application had been filed for a building permit, the answer was,

“No, not yet. As far as I know, no, nothing has been submitted to us.”

The part of the proposed McHenry County property, which Athans owns, is zoning for manufacturing. Another parcel, which he has not yet purchased, but for which he has a willing seller, is not.

I haven’t followed the efforts of Marengo to lure Chemtool, but I sense that April’s election returns may have made the city more likely to provide the zoning that is needed.

Maybe the zoning race is not over.

Maybe Boone County is the hare and Marengo is the tortoise.

If so, what a coup for Marengo Mayor Don Lockhart!

Labels: Boone County, Chemtool, Garden Prairie, Marengo, McHenry County, Tax Increment Financing District, TIF

If you wonder why McHenry County Blog is sensitized to Tax Increment Financing abuses, you need go no farther than Elgin.

Last Saturday’s Elgin Courier-News ran a front page article entitled,
Doubts cast on condos in Elgin

It tells of the 16-sotry condo planned for the Gail Borden Public Library site right next to the Fox River.

The city council has already “voted to give the developers RSC & Associates Inc., land and tax rebates worth some $13 million last year.”

So, as you read my efforts to figure out what the Crystal Lake City Council will do with the money from the three recently approved TIFs—

• Virginia Street from McDonalds (just torn down) to Burger King;
• Main Street (from the Union Pacific main line railroad tracks to the spur at Farr Manufacturing; and
• Vulcan Lakes (all of Route 14 east of Harris Bank to Pingree Road and back to Rakow Road, plus Curran Contracting’s property),

you’ll know why my and your antennae should be up.

TIF’s can be abused big time.

Labels: Elgin, RSC and Associates, Tax Increment Financing District, TIF, Vulcan Lakes

The Tribune has done what I think is an internet first in publishing a column by John Kass which did not end up in print.

At least in my edition.

And the Tribune web site has two columns by Kass (actually what I think is an internet exclusive seems to be listed twice).

Friday, after Ed Vrdolyak’s indictment Kass wrote this column.

Some of it might be of interest to Crystal Lakers, because it mentions two of the three principals who won City Council approval to develop the Vulcan Lakes/Route 14 Tax Increment Financing District.

Kass is suggesting to the U.S. Attorney’s Office that it might want to talk to former reform Chicago Alderman Bill Singer, who apparently had business dealings with Ed Vrdolyak after Singer and,