A school official asked why the owner needs a subsidy if he is ready to start the project.
DARIEN, IL – A Darien-area school leader is questioning why the city still wants to subsidize the owner of a struggling shopping center when the owner is starting improvements without the money.
On Friday, Brian Liedtke, president of Center Cass District 66's board, wrote about his concerns to city officials and on Facebook.
Liedtke, who told Patch he was not writing on behalf of the board or district, was responding to a statement from Mayor Joseph Marchese in the city's weekly newsletter. Sometime in the fall, the mayor said, the center's owner plans to update the storefront facades and improve landscaping and lighting at Chestnut Court at 75th Street and Lemont Road.
Such moves, he said, would attract new businesses and more shoppers to the largely vacant center.
In June, the City Council approved the zoning for changes to Chestnut Court, including a 156-unit apartment building. Many residents opposed the apartments, which the New Jersey-based owner, Kumar Bhavanasi, dropped days after the council's vote.
The city has been considering providing financial help through a proposed tax increment financing district, or TIF.
Earlier this month, area taxing bodies, including Center Cass, approved the tax district during a meeting of the Joint Review Board, a state-mandated panel that is part of the tax district process. In its vote, the board recommended that the city remove the residential component from the zoning.
On Facebook, Liedtke said the shopping center needs no money from a tax district if the developer is about ready to begin the redevelopment.
"Is next month's public hearing (September 15) and vote rigged in favor of the developer, where he knows he will get this support before the City Council approves it? I would hope not!" Liedtke said. "Or is the developer just thinking I can do this alone without diverting money from schools and parks and if I can get a few million reimbursed, then bonus for me?"
Neither scenario, Liedtke said, seems open or fair to the public.
In response to Liedtke's concerns in an email, City Administrator Bryon Vana said the owner plans a fresh look, but the improvements are basic ones that the previous owner neglected.
He also said a tax district's proceeds can be used to enhance the center above the basic improvements and maintenance.
The city can also use the tax district's money for redevelopment of the shopping center's space for specific tenant uses, which is a critical benefit, Vana said. Such costs, he said, can be a big obstacle for negotiations with tenants.
"This money can be used to solidify tenants," Vana said in an interview Friday.
In his email to city officials, Liedtke said, "If (the owner) has the means to begin this redevelopment without TIF support, why then proceed with establishing one, and harming the other taxing bodies in your area?"
In a reply to Liedtke, Vana disagreed about the effect on other taxing bodies.
"The negative impact on the taxing districts and residents is the annual declining assessed value of the center," Vana said.
The center's taxable value dropped to $4.3 million last year, from $6.2 million in 2019, according to a city consultant's report.
In an email to Patch on Friday, Liedtke said he supported his school district's position in the Joint Review Board meeting.
"I do support Center Cass' vote, as a revitalized commercial district would benefit the overall area, without adding to the residential student base, assuming, of course, the developer cannot redevelop this property without any economic development incentive," he said. "That being said, I personally question the need for a TIF at all, especially if the developer seems keen to proceed this fall, without having certainties that the TIF district will be established."
Under state law, a tax district's growth in property tax income for 23 years would be diverted for use in the district itself, rather than taxing bodies such as schools.
State law allows a tax district's money to be used for such things as utilities, stormwater improvements, parking lots and building renovations. But the money cannot be spent on the construction of privately owned buildings.
The theory is that the growth in property value over time would reimburse the tax district for the subsidy.
To establish a district, the city must show that development would not happen without the tax incentive.
The mostly vacant Chestnut Court shopping center in Darien would "probably die" without a tax incentive, Darien's mayor told aldermen in June. (David Giuliani/Patch)