Joint Review Board

MINUTES MEETING OF THE JOINT REVIEW BOARD CENTRAL BUSINESS DISTRICT REDEVELOPMENT PROJECT AREA CITY OF DEKALB SEPTEMBER 4, 2018 The Joint Review Board (JRB) of the City of DeKalb, Illinois convened on Tuesday, September 4, 2018 in the Council Chambers of the DeKalb Municipal Building, 200 South Fourth Street, DeKalb, Illinois. The meeting was called to order at 3:00 p.m. ROLL CALL Roll was recorded by Economic Development Planner, Jason Michnick, and the following members of the JRB were present: • Public Member, Tim Hays • DeKalb Township, Jennifer Jeep Johnson • DeKalb Park District, Heather Collins • City of DeKalb, Mayor Jerry Smith • Kishwaukee Community College, Bill Nicklas (Proxy for Dr. Laurie Borowicz) • DeKalb Community School District 428, Cynthia Carpenter • DeKalb County, Gary Hanson Also present was City Attorney, Dean Frieders; Community Development Director, Jo Ellen Charlton; and Interim City Manager, Molly Talkington. PUBLIC COMMENT Prior to public comment, Mayor Smith addressed the JRB and public with a statement in regard to the work the City has done over the past several weeks in an attempt to come to a resolution that would alleviate the concerns of the other taxing districts. These concerns include the City’s past use of TIF funds to cover administrative costs related to the existing TIF districts. Rather than engaging in conflict over the actions of the various taxing districts over the past 20 years, the Mayor would request that Council approve an agreement that would result in over $11 million in available fund balance between the Central Area TIF district and TIF 2 be declared as surplus. The large sum of money is equal to the amount that the City has claimed in administrative costs since Fiscal Year 2000. The Mayor also stated that the purpose that the JRB has been convened is to discuss the merits of the proposed CBD TIF and whether the Redevelopment Plan and Project meet the requirements of the TIF Act. The purpose in explaining the perspective of the City is to create a circumstance where the taxing districts can get beyond concerns they have about past use of TIF and focus on coming to terms that would result in a positive recommendation for the new TIF. Mr. Robert Goering, resident of the proposed CBD TIF and owner of the McCabe’s and Andy’s buildings stated his support for the propped TIF. He felt that the reduced footprint focused on the necessary area that needed to be revitalized and in need of economic support. As a building owner he stated that historic buildings are expensive to maintain and increasing property taxes have made it challenging to keep up with general Joint Review Board Meeting Minutes September 4, 2018 Page 2 of 3 maintenance. Without TIF, rehabbing and updating historic buildings would not be possible and would continue to deteriorate, similar to the old Otto’s building. The result would be the demolition of historic buildings and replacement with buildings that do not have the same character. Mr. Glenn Goering, resident and property owner in the proposed CBD TIF also stated his support for the proposed TIF district. Mr. Goering and his brother purchased the McCabe’s building in 1976 and remember when downtown DeKalb was filled with thriving businesses. He also shared the history of the McCabe’s building, including that the eastern portion of the building was the original blacksmith shop in DeKalb. He invited anyone that was interested in touring the historic building to get in contact with him. He also stated that he believed supporting the TIF was more than just about economic development, but it was supporting DeKalb as a community. He requested that the JRB give deep consideration to supporting the CBD TIF. Bessie Chronopoulos stated that she was glad to see the format of the JRB was changed and was being recorded. Recording meeting is an important part of transparency. Ms. Chronopoulos asked several questions of the JRB, including: Did the members have a chance to review the information being presented? Did the members have a chance to speak with their elected officials? Have the members of the JRB had enough time to digest and ponder all these questions? Will the JRB commit to meeting more frequently? She also stated that she felt there was not adequate information provided in regards to the positive and negative impacts of how TIF was spent historically. She also stated that it was important to consider sustainability of TIF projects. Gino Galluzzo, Special Counsel for the School District stated that he believed that more disclosure and transparency was needed in order to avoid the mistakes of the past. An example being that a recent $30,000 approval of TIF to renovate the Finance Department at City Hall should have been communicated to the JRB members. He does not believe that the School Board desires to stand in the way of the proposed TIF district, but still requests that the City consider delaying the process to work towards a resolution about their concerns. He questioned whether a proposed $11 million surplus distribution would be approved by the end of the year if the taxing districts did not come to an agreement. He believes by continuing to push forward, the City is not being collaborative as they state they are trying to be. Steve Kapitan stated that the most appropriate structure of TIF is to identify a specific project that would be supported by TIF, and then issuing debt. The increment from the project would then be used to pay the debt service and a TIF could be ended earlier than 23 years. If there is not a clear vision for the future, TIF can be misused over time. A good example of a successful TIF in DeKalb was the County Nursing Home TIF. DISCUSSION, DELIBERATION, AND RECOMMENDATION MOTION Ms. Carpenter made the following motion: “By majority vote of those present and voting and having reviewed the public record, the planning documents and proposed Ordinances approving the Redevelopment Plan and Project that the Project Area fails to meet the requirements of the eligibility criteria and objectives of the Tax Increment Redevelopment Act, in that the Plan Area is inclusive of  Joint Review Board Meeting Minutes September 4, 2018 Page 3 of 3 parcels which have already been subject to the Redevelopment Plan and Project have been assisted to the maximum extent by such plan and project and therefore are not blighted. Furthermore, the proposed Redevelopment Plan and Project fail to meet the objectives of the Act because the proposal as currently constituted will not eradicate blighted conditions and therefore does not promote, protect, the health and safety, morals, and welfare of the public. In addition, the City has demonstrated a failure to follow the requirement of the Act in its management of the collected increment from the other Plans and Projects to such an extent that it is unlikely that this Plan and Project will serve to promote the welfare of the public as it’s presently structured. The assembled taxing bodies are willing to undertake further discussion and negotiation regarding an amended Plan and Project, if the Plan and Project Area is amended to actually deal with blighted properties and if appropriate insurances regarding the use of TIF revenues solely for economic development purposes and keeping with the Act can be put in place.” The motion was seconded by Ms. Collins. The JRB discussed the motion and a desire to work towards a resolution. Ms. Carpenter stated that the purpose of the motion was to start those conversations. The JRB discussed a concern with the proposed CBD TIF, namely the inclusion of the Cornerstone and Plaza DeKalb properties. The City has publicly stated that its intention of including those properties was to “seed fund” the proposed TIF. A question was raised about the timing of a JRB recommendation and whether one would need to be made at the meeting. The Act states that the JRB has 30 days to make a recommendation, and if no recommendation was made within that time period, it would default to a positive recommendation. A request was made to slow down the timeframe of designation by restarting the clock on the noticing process to allow the taxing districts to work through the concerns and come to a resolution. As it is currently proposed, the City will have the Public Hearing on September 10 and could vote on the Ordinances as early as September 24. The City could choose to delay the introduction of the Ordinances up to 90 days after the Public Hearing. The JRB could reconvene to work through the issues if the City would agree to delay a final vote. The motion was called to a vote and failed 3-4. Aye: Collins, Carpenter and Hanson. Nay: Hayes, Johnson, Smith, and Nicklas. Mr. Nicklas made a motion to continue the meeting until Friday, September 7 at 1 p.m. in the Council Chambers. The motion was seconded by Ms. Johnson. Motion carried by a vote of 7-0. ADJOURNMENT The meeting was adjourned until September 7, 2018 at 1:00 p.m. Respectfully Submitted: Jason Michnick, Economic Development Planner Approved by the Joint Review Board: February 1, 2019.