City tired of compromising on tax districts

City tired of compromising on tax districts

CHAMPAIGN – City officials say they're tired of compromising with the Champaign school district about what it would take to get unqualified school board support for a proposed South Campus economic development district.

So the city essentially said "take it or leave it" to the school district Tuesday night.

As proof of their unhappiness, city council members also indicated they'll vote Oct. 4 to reduce the amount of property tax dollars the school district would receive from the city's downtown tax increment financing district if an agreement can't be reached.

"From a staff position, we've gone as far as we can," said Bruce Knight, the city of Champaign's planning director. "We've met 90 percent of what the school district asked for. Each time we've met a request, they've come back for something else."

Knight said the city staff would still be willing to talk to school officials over the next two weeks and bring issues back to the city council, if progress can be made.

School board President Scott Anderson said he still believes an agreement can be reached.

"As close as we are at this point, I've got to believe reasonable people can get together and make this happen," he said. "We're still optimistic."

The issue was removed from the agenda of Monday's special meeting of the school board.

At Tuesday's city council meeting, Mayor Jerry Schweighart, who attended the school board meeting, said he wasn't mad at the board, but at the school district's administration.

"The leadership is failing to bring it before the school board to cast a vote," he said.

Council member Kathy Ennen call the school district "visionless," and expressed her "extreme disappointment."

Anderson said the school board's major concern at this point is that the UI and city want to include the Ashton Woods apartment complex near Windsor Road and First Street, along with several nearby private residences, in the tax district.

"Our main focus is we'd like the UI and the city to focus development efforts on undeveloped property ... and to allow the existing tax base to continue to grow while also encouraging the conversion of tax-exempt properties into taxable properties," said Anderson.

Knight said the properties in questions are likely to be purchased by the UI in coming years and that the city and UI want the properties to be included in the tax district so they can be redeveloped.

Knight said the total amount of property taxes for those disputed properties is $15,000, and that the school district would continue to get that amount, though it wouldn't see increases, if the tax district is created.

Anderson said he believes more property tax dollars are at stake, though he said he didn't have any specific figures.

The city had been hoping for an unqualified letter of support from the school board Monday night for creating a proposed South Campus Economic Development tax increment financing district.

The University of Illinois and the city want to create the tax district to help pay for infrastructure and provide economic incentives for the expanding high-tech South Research Park. New development in the district would be taxable under the plan.

In a tax increment financing district, property taxes receipts are frozen at the base-year amount for most taxing bodies. As assessments increase from improvements in the district, the additional property taxes go into a special fund that must be spent within the district itself.

A school board letter of support is needed because special legislation creating the district, which would actually be two districts, must be approved by the Illinois Legislature. Legislative leaders won't call the legislation for a vote without letters of support from local taxing districts.

City staff recommended Tuesday, with apparent council concurrence, to push back tax rebates from the downtown tax increment financing district to local taxing bodies another year, and to reduce the overall percentage of the rebate in the first year from 40 percent to 30 percent of the 2004 increment.

The city is in the process of extending the life of its downtown taxing district for another 12 years, with a final vote scheduled for Oct. 4.

As part of the negotiations with the school district, the city had tentatively agreed to rebate 40 percent of the 2004 downtown increment, or $297,000, to the school district and other local taxing bodies this year. The school district's share would be $120,000.

The school district, facing financial problems, had asked for the accelerated payments.

But on Tuesday, the city council tentatively decided to go with its original schedule, which calls for the rebates to begin in 2006.

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