There's an old saying: "You can't fight city hall." And nowhere has that adage proved more true than on the issue of Tax Increment Financing districts, or TIFs — an eye-glazingly complicated concept that most taxpayers don't understand well enough to know whether it's a good thing or a bad thing when one comes to their neighborhood. The few who do and have tried to halt a TIF have had courts dismiss their cases, saying they have no right to sue.
Last month, however, in a unanimous ruling from the Illinois Fifth District Appellate Court, ordinary taxpayers won the right to challenge any TIF or its "kissing cousin," a "business district." The case, brought by Springfield attorney John Myers, involves a development in Belleville, Ill., but the precedent applies statewide.
Myers, best-known here for battling the proposed
Wabash Avenue Wal-Mart, says TIFs and business districts are valuable tools
when used for their original purpose — inciting redevelopment in
deteriorated areas by using the subsequent increased property taxes to
repay the municipality or developer that capitalized the improvements
(business districts use a special sales tax in place of property tax). He
cites the Jefferson Mall TIF on Veteran's Parkway and the Fiat Allis
TIF on South Sixth Street as examples of righteous TIFs.
On the other hand, Myers has challenged TIFs and business districts that appear geared to simply sweeten the deal for a developer. In the Belleville case, Myers sued the city and developers over a combination TIF and business district created to accommodate a Wal-Mart, a Lowe's Home Improvement Center, a residential subdivision and a strip shopping center. Myers' client was a Belleville resident named Stephen Malec — who just happens to be a union official.
Malec alleged that areas designated as
"vacant" did not meet the two main criteria for TIFs and
business districts — a finding of "blight," and a finding
that the area would likely not be redeveloped without the help of TIF or
business-district designation. Malec claimed that the areas designated for
these benefits were actually in agricultural production and could
reasonably attract developers without the lure of a TIF.
The St. Clair County circuit court dismissed the
case, endorsing the defendants' argument that Malec lacked standing.
The appellate court reversed the county court, finding that the taxes
diverted into repaying developers could have instead gone into the general
fund used to provide city services for all taxpayers.
"If the area would eventually develop absent
the TIF and the business district," the justices opined, "then
all the property and general sales tax revenue from that area would be
available as general revenue of the city rather than to reimburse the
Myers prevailed at the Fifth District in a similar
case last month in Wood River, Ill., where the city drew a business
district for a shopping center on a farm field behind a Wal-Mart
Supercenter. "This is insufficient to find blight," the
appellate court ruled. The city of Wood River and Wood River Developers
Springfield has recently designated a similar
business district slated for the Legacy Point development, along the
MacArthur Boulevard extension. Myers calls it questionable. "It
involves a finding of blight in 450 acres of farm field," he says. So
far, nobody's suing Springfield about that designation.
Contact Dusty Rhodes at email@example.com