Rock Island Today

City of Aledo Tax Increment Financing Committee met Feb. 26.

Here are the minutes provided by the committee:

A Tax Increment Financing (TIF) Committee meeting of the City of Aledo met in Open Session in the Council Chambers of the City Hall building on February 26, 2024. MAYOR HAGLOCH called the Committee meeting to order at 6:37 P.M. The roll was called, whereupon the following committee members answered present:

Aldermen NOEL BUSH, BARRY COOPER, and MARK FRIESE. Mayor CHRIS HAGLOCH. Alderman LINDA SARABASA was excused.

Also, present DENNIS DIXON, Alderman, JAY DOHERTY, Alderman, CARMEN RUH, Alderman, ANDREW WEEKS, Alderman, MICHAEL CHAUSSE, City Administrator, and JAROD DALE, City Clerk.

The media was represented by Jim Taylor, WRMJ.

The following was discussed:

Approval of Committee Minutes: Motion was made by ALD. COOPER and second by ALD. FRIESE to approve the meeting minutes of 05/25/23 as presented. A Unanimous voice vote followed in agreement.

Public Comment: No Report.

Old Business: No Report.

New Business: Discussion Regarding a TIF Application submitted by RTN Properties, LLC (Ryan & Tiffany Newswander) for property located at 709-713 SW 3rd Street, Aledo, IL:

ADMINISTRATOR Chausse reported Ryan and Tiffany Newswander of RTN Properties, LLC have approached the city with a TIF application for the construction of a stand alone ice and reverse osmosis water dispenser and site work for property located at PIN 10-10-17-354-005 and PIN 10-10-17-354-010 on the northeast corner of Rt. 17 (SW 3rd St.) and SW 8th Ave.

City Staff contacted Steve Kline, our TIF consultant, to discuss and analyze the project. Correspondence from Steven Kline, The Economic Development Group, Ltd. provided the following review to the TIF Committee:

“Per the TIF Application, the total estimated investment for the Project is $220,000, which presumably includes land, site prep, professional costs, utility extensions, and the ice vending equipment. The Developer has estimated total TIF eligible project costs of $70,678, of which $20,000 is land acquisition and the rest is attributed to professional fees ($1,300) and public infrastructure improvements ($49,378). The quotes for utility extensions and the concrete work all appear to be included on the worksheet as the public infrastructure improvements.

Professional costs such as engineering and legal fees incurred by the Developer for the Project are TIF eligible. All of the leveling, grading and preparation of the site in advance of pouring the concrete pad is TIF eligible. Trenching and other costs related to the extension of electric and water service to the site where the concrete pad will be placed is TIF eligible. The vertical construction of the concrete pad and the ice vending equipment are not regarded as TIF eligible project costs.

As of tax year 2022, the two lots cited above have a combined total taxable value of $5,988 and a TIF Base EAV of $36,540. Therefore, these lots would need to experience new private investment in land and real estate of more than $90,000 before they begin generating new TIF Increment. Although it will be great for this Property to be redeveloped for a new productive use, I am not of the opinion that the Ice Vending Machine Project itself will not substantially increase the EAV enough to generate much new TIF Increment. There is a similar ice vending machine property in Macomb that was placed into service in 2016 and currently has a total taxable EAV of $11,565.

Even though the proposed Project is unlikely to generate a substantial amount of new TIF Increment in the future, if the City wishes to provide TIF assistance it can still do that. Assuming TIF funds are available, we often find municipalities offer to reimburse these types of projects with a one-time, lump-sum reimbursement ("TIF Grant") that is based on an agreed percentage of certain TIF eligible project costs incurred by the Developer for the Project, not to exceed a designated total amount. For example, upon

completion of the Project and verification of the TIF eligible project costs, the City could offer to reimburse 15% of the costs of the site preparation and utility extensions, not to exceed $10,000, whichever is lower (i.e., this is an example, the City needs to determine the specific amount it is comfortable with offering).

If the City wishes to place conditions on the TIF Grant, such as the Ice Vending Machine must remain there and in operation for not less than 5 yrs. following completion of the Project, the City can do that as well. In that case, if the ice vending machine were to cease business operations or be removed within the 5-year period, the redevelopment agreement would require the Developer to repay all or a portion of the TIF Grant. This performance-based approach helps build in more accountability for the Project and the City is not necessarily perceived by the public as unconditionally awarding TIF grants.”

Tiffany Newswander reported to the Committee Lots 5 & 6 appraise at a value of $18,000.00. Newswander also noted to the Committee that the property will generate 1% sales tax revenue if the project was to be completed.

Ryan Newswander reported to the Committee that hopes would be to have this project completed by May 1st. It was requested by the applicants that a recommendation by the City would need to be received back by mid-march.

MAYOR Hagloch reported the TIF Committee would need to reconvene after review of available TIF funds currently held by the City. Other projects regarding TIF dollars have been earmarked for the Sponsler Manor 3rd Addition project in the F/Y 2024 Budget.

The Committee inquired if the applicants would continue with the project should there be no available TIF assistance at this time. Ryan & Tiffany Newswander acknowledged the project would continue with or without TIF assistance.

A Tax Increment Financing (TIF) Committee meeting was scheduled for Monday, March 11th at 6:15 p.m.

ADJOURNMENT: There being no further business, motion was made by ALDERMAN FRIESE and seconded by ALDERMAN DIXON that the meeting be adjourned. Unanimous voice vote followed in agreement. Meeting was adjourned at 6:56 P.M.

https://www.aledoil.gov/AgendaCenter/ViewFile/Minutes/_02262024-396