Concerns raised that some of the funds for a new Jeff Park taxing body would go to TIF district


Concerns that a commission of local property and business owners would not control all of the revenue collected from a proposed property tax designed to market and beautify the Jefferson Park business district were raised at the May 27 meeting of the Jefferson Park Neighborhood Association.

Also at the meeting, association members voted 17-2 in favor of a resolution calling for residential property owners not to be required to pay the property tax, which would range from about $40 to $300 a year for the 501 affected condominium, house and apartment building owners. The association’s board of officers and directors already had approved a similar resolution on the proposed taxing body, which is called a “special service area.”

“The JPNA is not against the SSA,” said association president Judy Skotzko. “Our issue is primarily with the residences which are being forced into it. It is primarily a business tool.”

The Jefferson Park Chamber of Commerce is proposing the creation of a service area that would be funded through a property tax that would be levied on 747 commercial, residential and mixed-use properties in the area. Mayor Rahm Emanuel would appoint a local commission that would set the annual tax levy and set a budget for the services which would be provided to the area.

For 2016, the chamber is proposing a budget of about $220,000 for the service area, but about an additional $50,000 would be collected and, as required by law, diverted to the Jefferson Park Tax Increment Financing District, which was created in 1998 and which is primarily intended to fund large infrastructure improvements, said association member Greg Sedlacek. A service area is intended to cover services such as marketing the business area, sidewalk cleaning, planter box maintenance and the installation of lamppost banners.

Many of the properties which would be in the service area also are located within the boundaries of the TIF district, which is centered at the Milwaukee-Lawrence business district. The service area would extend further west to include the Lawrence-Austin business district.

In a TIF district, the equalized assessed valuation of a property is frozen at the time of the district’s creation for up to 23 years, and each taxing body only receives the tax revenue based on the frozen valuation. Any additional tax revenue which is generated from increases in the assessed valuation goes to the TIF district, which is controlled by the City of Chicago.

Sedlacek said that TIF districts are “for lack of a better word slush funds” controlled by the mayor and “to a lesser degree an alderman” and that TIF expenditures are too often made without public oversight and community input.

He said that there is no guarantee that funds collected for the TIF District will be spent in Jefferson Park because those funds can be transferred to TIF districts in neighboring communities.

Ten years ago organizers of the Six Corners service area unsuccessfully tried to get an agreement with the city in which any TIF revenue generated by the SSA would be given to the service area.

Since 2007 the neighborhood association’s platform has called for the Jefferson Park TIF District to be dissolved.

Over the years association officials have called the TIF district a failure because it was intended in large part to help subsidize the redevelopment of the Lawrence-Milwaukee district, but instead the area has experienced an increase in the number of vacant lots and gravel parking lots since 1998. Several buildings in the 5200 and 5300 blocks of West Lawrence Avenue and the 4500 block of North Milwaukee Avenue were demolished.

Association member Ryan Richter said that both service areas and TIF districts can play an important role in revitalizing an area and that it would be beneficial for the community to have both of these redevelopment tools.

A woman expressed concern that high property taxes in the area already are discouraging businesses from moving in and that the service area could add to the problem. She said that commercial landlords often have their tenants pay all of the property taxes.

Chamber officials have said that when the TIF district expires in 2021, the tax rate for the service area is expected to decrease since the equalized assessed valuation would no longer be frozen. The service area commission would then be able to collect the same amount of funds that it typically seeks but with a lower tax rate since funds would not be diverted to the TIF district.

City policy requires boundaries for service areas to be contiguous and does not allow residential properties in those areas to be left out. Although most of the properties in the proposed Jefferson Park service area are residential, most of the revenue would be generated from the commercial properties, whose assessed valuation is higher than the residential properties.

At a May 21 community meeting hosted by the chamber, resident Bob Bank said that a city policy requiring that 20 percent of the affected property owners sign a petition in favor of the service area was too low of a threshold. “Twenty percent are dictating to the others, and you are in, paying the tax,” he said.

In order to halt an SSA application, state law requires opponents to submit a petition with the signatures of at least 51 percent of the affected property owners. The City Council is required to approve an SSA application and also votes on a yearly budget which each service area commission submits to the city, which has 53 service areas.

Chamber president Lionel Rabb said that if it were allowed by the city, the chamber would give residential owners the opportunity to opt out of the service area. The City of Evanston allows condominiums which are located above storefronts to be excluded from a service area, but the city has a different interpretation of the state law that authorizes the creation of service area.

Rabb said that the SSA funds would be used to recruit more businesses to the community and improve the overall look of the business district and that these improvements would help increase property values in the area, benefiting those who are paying the tax.

The service area would run along Lawrence Avenue between the Kennedy Expressway and Austin Avenue, Milwaukee Avenue between Montrose Avenue and the expressway, and the west side of Central Avenue between Lawrence and Higgins Avenue.

Reaction to the proposed service area has been mixed at the two community meetings hosted by the chamber.

A representative of Mega Properties, which owns the 10-story Veterans Square building at 4849 N. Milwaukee Ave., has spoken out against the service area, while 10 residents who have attended these meetings and who would be subject to the tax signed the chamber’s support petition.  One of the signers said that she plans to raise her family in Jefferson Park and wants a more vibrant business district where she can take her children shopping.

Some opponents have said that instead of creating a tax to pay for the maintenance of the business district, the city should do a better job issuing citations to those who do not clean up their properties and who fail to shovel the snow on the sidewalk in front of their businesses.

Alderman John Arena (45th) said that citations are routinely issued to negligent property owners in the ward but that in too many instances these owners continue to ignore city laws.

The chamber must submit its SSA application by Friday, June 12, and the City Council would vote on the application this fall.