McHenry City Council Approves TIF Study to Boost Redevelopment

The McHenry City Council has initiated a significant step towards urban redevelopment by approving a contract to assess the eligibility of two proposed Tax Increment Financing (TIF) districts. This decision, made during a recent meeting, passed with a vote of 4-2, with Alderman Andy Glab of the 2nd Ward and Alderman Chris Bassi of the 4th Ward opposing the measure. The contract, valued at up to $20,000, has been awarded to Teska Associates Inc., a firm specializing in community planning.

Alderman Glab expressed his concerns regarding the implications of establishing TIF districts, stating, “TIF districts are another way of taxing property tax payers.” He emphasized the need for a comprehensive plan for the areas before proceeding. “We need to have a good vision of what we want before we create the TIF,” he added. Alderman Michael Koch from Ward 6 was absent from the meeting.

Understanding TIF Districts and Their Impacts

TIF districts provide a mechanism for redirecting increased property taxes generated from redevelopment back into the district rather than distributing those funds to local taxing authorities. The funds can be allocated for public improvements, including infrastructure enhancements or the demolition of outdated structures. Generally, TIFs aim to revitalize areas deemed “blighted” and encourage new development.

The conversation regarding additional TIF districts began in February, with the current study expected to clarify which buildings qualify for inclusion in the proposed districts. Mayor Wayne Jett explained the study’s objective, stating it would determine the eligibility of approximately 353 parcels in the targeted areas.

The proposed TIF districts include:

– **Northern Richmond Road:** Extending from Pearl Street to Blake Boulevard, encompassing areas east to the Oaks of McHenry.
– **Southern and Western Route 120/Main Street:** Covering areas west of Millstream Drive to west of Ringwood Road, along both sides of Illinois Route 120, including Main Street, and continuing south to Mill Street and Front Street.

Currently, McHenry operates an existing TIF district that covers an area from Green Street to Riverside Drive and Waukegan Road to Pearl Street. This TIF, originally approved in 2002, was extended by the state last year and is scheduled to conclude in 2037. Funds from this district have contributed to the construction of the McHenry Riverwalk.

Future Prospects for McHenry’s Development

City staff have received several development proposals for the areas under consideration, but the absence of financial incentives such as a TIF has hindered progress. According to Doug Martin, the director of economic development, “Without incentives, developers have not moved forward.”

The criteria for determining TIF eligibility include factors such as “excessive vacancies” and general signs of blight. Martin highlighted the old Kmart/Sears building on Richmond Road as a prime example of blighted property, describing it as “just an eyesore” that barely meets current building codes.

Additionally, Martin noted that many parcels along Route 120 are small, shallow lots. Establishing a TIF could enable developers to consolidate these properties into larger, more viable projects. He emphasized that there is no intention of pursuing eminent domain, stating, “This is strictly for private development to come in.”

The results of the eligibility study are anticipated by December 2023. Following this, further studies, including a detailed redevelopment plan and public hearings, will take place before any vote on the establishment of the new TIF districts. Martin expressed optimism, indicating that the goal is to finalize the TIFs by the end of March 2024, contingent upon Council approval to proceed.