HUNTLEY – Last December, the Village of Huntley approved a study to determine whether or not to designate downtown Huntley a tax increment financing district.
The study will examine costs, risks, and feasibility of the process and will give village officials the information to decide whether or not to go through with the plan. The eventual goal for downtown Huntley is to attract new investment by renovating and redeveloping some of the older buildings.
TIF districts are financed by freezing the amount local taxing bodies, such as school districts, library districts, and police departments, receive from property taxes for a set period of time, which could last up to 23 years.
As property taxes rise over time, the increment of increase goes towards the TIF district to help fund redevelopment. For example, if the Huntley Public Library District received $10 in property taxes before the TIF district, and it was due to receive $15 the next year, it would still receive $10 and the surplus of $5 would go toward improving downtown.
The incentive for taxing bodies is that by the time the TIF district is done redeveloping, property taxes will rise enough to bring them revenues they would not have received had the area not been redeveloped.
Increased property taxes are one way a TIF district can bring in money. The other is sales taxes, which bring in revenue sooner and more often than property taxes.
Part of the goal for downtown Huntley is to make it an attractive area for new businesses to set up shop, particularly retail shops and restaurants. Pam Fender, village trustee, described this investment as a “rolling stone” gathering moss.
“What happens is sometimes within a downtown if you have one or two or three key properties that suddenly bring business to downtown, it helps the whole rest of the downtown because then it starts to be a place to be,” she said.
New businesses also bring jobs, which Fender cited as a chief concern. Those heightened taxes, along with new businesses and jobs, represent the ideal future of downtown Huntley.
However, TIF districts also present a risk in the case where an area allocates taxes to redevelop and is left with a part of town that has updated the facades of its buildings but has failed to attract investment and generate taxes to reinvest back into the community.
“A large part of it depends on the economy, and those are things that are outside of a lot of people’s control,” Charles Nordman, Huntley’s director of Development Services, said. “That’s obviously one of the risks you run is that the economy stays where it is.”
That risk is why Huntley is working with Kane, McKenna and Associates, a financial firm specializing in municipal and economic development. The firm’s analysis marks the first phase of the TIF plan.
This phase includes analyzing the feasibility of making downtown Huntley a TIF district and, essentially, if it will pay off. This phase also determines if the area qualifies as “blighted” based on its physical, economic, and social stature. A TIF district can also be deemed a “conservation” area that needs to be preserved. According to Nordman, this phase, including the preliminary study, would cost between $12,500 to $15,000.
Phase two would further prepare the village for a redevelopment plan through TIF by getting taxing bodies involved. And the third phase sees the program implemented. Nordman said phase two would cost between $22,000 and $27,000, and the cost for phase three is uncertain at this time.
“What we’ve learned through some of our surveys in the past and through our redevelopment plan is that people still view downtown as the heart of Huntley—that’s historical Huntley and that’s what people want to hold on to,” Nordman said.
The village and its residents await the results of the study to find out just how Huntley will go about keeping its downtown alive.
