Crown Community Development has agreed to share with local governments some of the funds generated by a tax increment financing district requested to support a development proposed for Sugar Grove, village officials announced on Tuesday.
The announcement, made by Sugar Grove Village President Jennifer Konen, came near the end of a nearly seven-hour meeting on “The Grove,” the controversial 760-acre mixed-use development proposed by Crown Community Development around the Interstate 88 and Route 47 interchange. Some residents stayed for the entire meeting, waiting until after midnight to speak at a public comment period and give their thoughts on the proposal.
Of the 12 people who spoke during public comment, all but one voiced their opposition to the development.
According to Konen, Sugar Grove met with Crown Community Development over concerns that the project — which could one day hold warehouses, data centers, commercial development and up to 1,500 residential units — would strain the resources of local governments and other taxing bodies like school districts if they could not benefit from the increased property taxes generated by the development because of a tax increment financing, or TIF, district placed on the development area.
In a TIF district, which is a type of economic development incentive allowed by state law, property taxes that come from new development in the area do not go to taxing bodies as they normally would. Instead, those extra or “increment” property taxes go into a special fund, which can be used to pay for costs associated with the improvement of the area, such as through infrastructure like water mains or roads.
Under the TIF agreement previously proposed by Crown Community Development, the company would get paid back for certain improvements it makes to the area using up to $109 million in TIF-generated funds.
As the TIF district generates funds, the money would be split among Crown and the village, with 90% going to pay back the company and 10% going to the village for any improvements it needs to make in the area, according to the original proposal.
However, Konen said that Crown has agreed to give up another 10% of the funds so they can be distributed among the other taxing bodies by declaring the funds as surplus as they are generated each year.
Assuming the project builds out according to Crown’s plans, this 10% in declared surplus TIF funds would distribute a combined $37 million to all local taxing bodies throughout the TIF district’s 23-year lifespan, according to Konen.
She said the Kaneland School District, which was a concern of some who previously said the district already has financial concerns, would itself get $26 million of those funds.
Those “surplus” funds would be on top of the money the school district would already have received under the originally proposed TIF agreement and other proposed agreements, such as impact fees and land cash fees, Konen said.
The originally proposed TIF agreement includes payments from TIF district funds to cover the cost of schooling for all students who live in TIF-supported housing, which village staff previously said would be paid first before any other commitments.
The potential downside of declaring the 10% as surplus is that Crown Community Development would only get 80% of the funds generated in the TIF district instead of the originally proposed 90%, which would take the village longer to pay Crown back for the work the company does to improve the land, according to Konen.
She said that the longer it takes to pay Crown back, the more the village will end up spending on interest payments outlined in the TIF agreement.
However, if the TIF district does not generate enough funds within its 23-year lifespan to pay Crown back for applicable work plus interest, the village is not obligated to use its other funds to pay Crown back, village staff members have previously said.
If the development is built according to plan, then the TIF district should generate more than enough to pay Crown back, according to a memo by economic development consulting firm SB Friedman that said the district should generate as much as $340 million over its lifespan.
The Sugar Grove Village Board did not make any decisions at the Tuesday meeting, as the meeting was purely to hear public feedback and discuss the proposed development.
The first time the board is likely to vote on any part of the project is its next meeting on Sept. 3, according to a meeting timeline posted to the village’s website.
The meeting between Sugar Grove and Crown Community Development to discuss the TIF fund allocation change came after some residents and elected officials of Sugar Grove and other nearby communities voiced concerns that local governments and districts will be forced to raise taxes on existing residents to support development within the proposed TIF district.
Rising taxes are among the many concerns that opposed residents and officials have about the proposed development. Other concerns include the area’s eligibility under the TIF Act, the feasibility of the project and the project’s potential impact on the area’s traffic, public health and rural character.
On Monday, Elburn Village President Jeff Walter sent an email to the Sugar Grove Village Board opposing the proposed development, arguing that using a TIF district to support residential development will strain public resources and place a financial burden on existing taxpayers, including those in Elburn.
“I urge the Sugar Grove Village Board to carefully reconsider the establishment of a TIF for this development, and to ensure that any fiscal decisions made will not adversely affect the financial stability of neighboring municipalities and taxing bodies,” he said in the email.
Walter said in the email that he was also concerned about the traffic generated by such a large development and the impact that traffic would have on Elburn, particularly on its downtown, which he said “is heavily reliant on smooth traffic flow for the convenience and safety of our residents and visitors.”
He urged the Sugar Grove Village Board to “delay any decision on the northern half of the project until any necessary infrastructure improvements are identified and can be implemented by the Illinois Department of Transportation on Route 47 north of I-88 through the village of Elburn.”
Back in June, Blackberry Township Supervisor Esther Steel and Township Road Commissioner Rod Fleece said in two separate letters to Sugar Grove that they had similar concerns.
While the letters had different objections to the proposed development, both said the TIF district would put a strain on their financial resources as the project was developed and on needed services but did not provide additional property taxes.
At the Tuesday meeting, Konen said that the proposed TIF district allocation change recently agreed to by Crown, which would declare 10% of the TIF fund as surplus so it could be distributed among all taxing bodies, should help ease some of Blackberry Township’s concerns.
Residents who spoke during the meeting’s public comment period and opposed the project voiced familiar concerns. Many pointed to the significant public opposition to the project as a reason Sugar Grove trustees should vote against the proposal.
But, a common sentiment among many speakers was that the Sugar Grove Village Board did not care what residents had to say, particularly if those residents live outside of Sugar Grove’s borders. They said holding public comment at midnight during Tuesday’s meeting was evidence trustees did not care about the public’s concerns.
The meeting’s public comment period came after roughly six hours of discussion from the Sugar Grove Village Board, which started at 6 p.m. and went until around midnight.
The Tuesday meeting was a continuation of a meeting that started on Aug. 20.
That meeting lasted five and a half hours before trustees voted to continue the meeting on Aug. 22. The next meeting went for another five and a half hours, and trustees again voted to continue the meeting this Tuesday, when it was finally adjourned after nearly 18 total hours over the three days.
Throughout the three days, Sugar Grove trustees combed over the different agreements that need to be approved for The Grove project to move forward.
Those agreements are for the annexation of the 760 acres into Sugar Grove, the subdivision of the land into areas of different land uses, zoning of the land under a Planned Development District and an agreement outlining the terms of the TIF district, which is called a redevelopment agreement.
The Village Board requested a number of changes to the Planned Development District zoning, the subdivision agreement and the annexation agreement, and most were agreed to by Crown Community Development’s Jennifer Cowan.
For those she did not immediately agree to, she asked for more time to consider how it would impact the company’s plans.
At last week’s meetings, Cowan agreed to restrict heavy industrial and recycling center uses within the business park area of the development.
She also agreed last week to hold back on building primarily residential in a mixed-use area to encourage commercial development for eight years or until 80% of the previous residential area was fully developed, whichever was longest.
On Tuesday, Cowan agreed to lower the maximum building height within the business park from 60 feet to 48 feet, except for data centers which have their own maximum height of 65 feet. She also agreed to increase the building setbacks along where the business park borders residential areas, either proposed or existing.
A clause in the annexation agreement requiring the village to assist Crown Community Development acquire land through eminent domain if other efforts to acquire the land were unsuccessful, which has been a cause of concern for residents opposed to the project, was changed to include only very specific areas.
Cowan said the company would need to control these patches of land to put in infrastructure that is needed for the development of the project or that is requested by the village, including water mains and road construction.
The three areas that could be impacted are all near the Hannaford Farms neighborhood in Sugar Grove, Cowan said.
Cowan also agreed to include limits on the amount of water the development can draw. Residents and trustees had previously expressed concerns that Sugar Grove’s water system could not support the development despite a report from the village saying that it could.
A number of other changes were also made to the various proposed agreements, from the expansion of trails to the number of trees placed along Seavey Road to block the view of the business park.
Even with the changes, trustees Heidi Lendi and Sean Michels appeared to be against the proposed project. No formal vote was taken at the meeting.
The meeting that started on Aug. 20 and ended on Tuesday was far from the first about the proposed development.
It has previously gone before a Joint Review Board of various taxing bodies that would be impacted by the proposed TIF district, been up for a public hearing on the proposed TIF district and was the subject of a multi-day Sugar Grove Plan Commission and Zoning Board of Appeals meeting that lasted around 12 hours over several days.
rsmith@chicagotribune.com
