Champaign extends East University TIF district for 12 years

CHAMPAIGN – City council members hope the next 12 years bring further changes along First Street and East University Avenue, after they supported the continuance of a program designed to encourage redevelopment there.

Council members voted 7-1 on Tuesday to extend the 24-year-old East University Avenue tax increment financing district for another 12 years.

The total assessed value of the East University Avenue district has increased from $5.5 million in 1986 to $15.9 million last year, said city planner T.J. Blakeman, but it still has not reached its full potential.

City planners hope to use the program during the next 12 years to offer redevelopment incentives to businesses and to create infrastructure, like plans for a public plaza on Water Street, to encourage in-fill development.

Tax increment financing districts are development tools that freeze property tax payments to each government agency at a baseline level. As property values rise, all of the tax revenue above that baseline goes to the city, which in turn invests the money back into infrastructure improvements and development incentives for the district.

The idea is that the reinvestment spurs further development, which means even more tax revenue.

Council member Gordy Hulten, who was alone in disapproval of continuing the district, said the East University Avenue area has a track record of not meeting the goals city planners have set for it.

Some of the more ambitious goals in older plans for that area, which were written in 1986 and 1994, never were realized. But city planners believe the new plan for the area are more realistic and achievable, Blakeman said.

Hulten said he also worries that city officials would have too much discretion in choosing "the right kind of in-fill development" and denying development incentives to other businesses.

Eight other taxing bodies – like the school district and park district from which property tax revenue is withheld to invest in the district – have supported extending the tax increment financing plan that "carves out" about half the district. Tax revenue from those properties dropped from the district, mostly along the easternmost portion of East University Avenue, will be released to the eight taxing bodies.

Valerie McWilliams, who works along North First Street, which is not included in the district, said there is still a lot of progress to be made in the area. She hopes city officials will look at how to promote business along North First Street.

"In all of this redevelopment talk, I think it's really important to think about how to fill in that whole space," she said.

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