Will a powerful economic development tool be renewed for Springfield's Enos Park neighborhood, including the new downtown YMCA project?
The clock is ticking for the Enos Park Tax Increment Financing (TIF) District, with one deadline already passed and supporters pinning their hopes on a renewal during the Illinois General Assembly's fall veto session. However, there's been no confirmation yet if the General Assembly will even schedule a veto session, let alone consider extending TIFs during such a session.
What has traditionally been a smooth TIF renewal process has hit some bumps with the Enos Park TIF, and a lot is at stake for the area north of downtown.
"There's always concern, you hope the renewal process goes through smoothly, but unfortunately it didn't in the spring legislative session," said Springfield Mayor Jim Langfelder. "That's why we are hoping for it in the fall veto session."
The Enos Park TIF was removed from the General Assembly's omnibus TIF renewal bill in the spring because all of the required letters of support from surrounding taxing bodies for extending the TIF district for 12 years could not be obtained in time.
Langfelder is still confident about the Enos Park TIF extension and cited the legislature's retroactive extension of the city's East Side TIF as an example of what can be done to help communities when deadlines can't be met. The mayor hopes to also get the Madison Park Place TIF, which expires in 2022, renewed this fall as well.
"It's all hands on deck; we need to take advantage of all of the financial resources available," Langfelder said. "The YMCA project would not have happened without the TIF and it's going to transform that area. We committed to the YMCA project using the Enos Park TIF, and if that TIF goes away, then the downtown TIF would have to make up for the difference," said Langfelder. Relying solely on the downtown TIF, he said, is possible, but not desirable.
The required letters of support from area taxing bodies are the main cause of the delay. Sangamon County Administrator Brian McFadden tried to help Langfelder obtain those letters this spring, but ran into an issue with Capital Township.
"The irony is he's asking for a support letter from a unit of government he's trying to eliminate," McFadden said. "We got the mayor on the phone, and he indicated that he was still interested in consolidating Capital Township into the City of Springfield, which didn't go over very well with Capital Township."
"I think there is a little restlessness with some of the taxing bodies because, although this should generate revenue that otherwise wouldn't have been generated without the TIF, there's fatigue on some of the taxing bodies. They are asking if there is ever an end on any of these TIFs," McFadden said. "To date, it doesn't seem to be that way. But I think everyone realizes that this can be a very effective economic development tool if used correctly."
Per Illinois law, TIF districts are created in areas that are determined to be blighted, based on physical and economic deficiencies. The municipality must demonstrate that, but for the public investment provided through the TIF, redevelopment would not occur. TIF districts are created for an initial 23-year period but can be renewed for an additional 12 years. However, the Central Area TIF covering downtown Springfield was renewed in 2016 for a second time, the first time a TIF district in the state has been renewed twice.
The Enos Park TIF also won't be receiving a letter of support from the Springfield Park District. In a May 18 letter, Executive Director Derek Harms informed Mayor Langfelder that the Park District Board "does not support a term extension for the SHA (Madison Park Place) or the Enos Park TIF Districts."
Harms' letter said that TIFs are intended to be temporary in nature and that term extensions are counter to the spirit of the TIF Act.
"Extending the term of the TIF Districts will prohibit the taxing bodies from realizing the increase in property taxes for which they have invested over the last 23 years," Harms' letter stated. "The Park District has concerns over the use of TIF funds. The city recently used TIF funds on the Municipal Center roof, contrary to the stated goal of those funds. In conclusion, with 10 TIF districts across the city, the Park District believes these two TIFs should be phased out and thus cannot write a letter in support of their continuation."
State Representative Sue Scherer, whose district includes the Enos Park neighborhood, said she is open to discussion on the TIF extension. "I look forward to hearing from the taxing bodies," Scherer said.
State Representative Mike Murphy said it's possible the General Assembly may schedule a veto session, but it might be a hard sell for the Enos Park TIF extension if it can't get support from 100% of the impacted taxing bodies.
"I understand the reasons for TIFs, I'm just not sure that they're all working the way they were meant to," Murphy said. "I would like to do a study on the actual economic impact and development that they have provided. What they were able to do on MacArthur with HyVee was wonderful. We need more wins like that."
Caleb Payne, president of the Enos Park Neighborhood Improvement Association, said the city of Springfield planned to use the downtown TIF to cover the city's $6 million commitment to the new YMCA, should Enos Park's TIF not be renewed.
"While this was a wise decision, it would be unfortunate to tie up funds to the downtown that could otherwise go toward other exciting and equity-building projects, especially if losing a TIF district is avoidable," Payne said. "But beyond the YMCA funding, losing the TIF would mean an immediate loss of several popular programs that are funded through the TIF, programs designed to bring equity into households and neighborhoods that revitalize areas of our community."
Payne noted that Enos Park TIF funds are currently being used to provide matching grants to homeowners who want to make exterior improvements to their houses, as well as down payment assistance for veterans and first responders. In addition, the neighborhood association received a $100,000 grant through the Federal Home Loan Bank to help low-income homeowners make home repairs; the grant relies on matching funds from the city, also funded through the TIF.
According to the Illinois Tax Increment Association, TIFs offer municipalities an important tool that reduces the extra cost and risk that private development faces in certain areas. As the amount of property tax revenue in a TIF district increases, the additional revenue, or increment, is set aside to be reinvested into the area to spur further development.
While the taxing bodies continue to receive the same revenue from property taxes as they did when the TIF district was created, these additional tax revenues do not go directly to the taxing bodies until the TIF district expires, which many municipalities feel is an important consideration during these cash-strapped COVID times.
Springfield's other TIF districts
According to the City of Springfield's website, the city currently has 10 TIF districts. The Central Area (downtown) TIF was the first one created, in 1981, and is currently not set to expire until 2028 after being renewed a second time. Other TIFs include the recently renewed Far East Side (1995-2030), along with the two TIF districts the city is currently seeking to renew: Enos Park (1997-2020) and SHA/Madison Park Place (1999-2022). The Northeast (2003-2026) and Jefferson Crossing (2007-2030) TIF districts are still within their original 23-year period, along with four additional TIF districts created in Springfield in the past decade: MacArthur Boulevard (2012-2035), Dirksen Parkway Commercial (2012-2035), Peoria Road (2017-2040) and Lumber Lane (2018-2041).