DeKalb mayor backs proposal for Fourth Street redevelopment using TIF

DeKALB – DeKalb Mayor Cohen Barnes this week helped lay out the city's arguments for a plan to redevelop dilapidated buildings on Fourth Street, backing the proposal that still needs City Council approval to begin.

Officials said the City of DeKalb also plans to host a town hall this fall for residents to learn more about the plan, including how the city intends to use tax increment financing (TIF) to aid redevelopment efforts.

Barnes said the city's goal for another TIF district is to bring more redevelopment concentrated on the south side. The area also has seen significant industrial growth since 2020, with the addition of the Meta DeKalb Data Center, Ferrara Candy Company and forthcoming Kraft Heinz distribution facility.

"This allows us to be a catalyst for change that could happen on the south side," Barnes said. "That's our motivation. That's our goal. TIF is one of the ways that we can go about doing just that."

City leaders held a public meeting this week to inform area residents about the proposal which, if approved, would create a TIF district along Fourth Street. A TIF district is an economic development tool used to spur new activity in a defined area. Collected property taxes in the outlined geographic area are pooled over time, and often used to repair blighted buildings or fund new development.

City Manager Bill Nicklas said the city had sent out a letter to each of the property owners within the boundaries of the proposed district.

"We got the desired response," Nicklas said, referring to the turnout for the public meeting.

The proposed redevelopment area includes 205 acres and 213 parcels along Fourth Street, from Taylor Street south to the Interstate 88 tollway, city documents show. It's been revised down from an earlier proposal, which included 342 acres and 626 lots.

City staff said the Fourth Street corridor contains properties with values that have lagged behind compared to other places in the city for the past five years, documents show. According to the most recent city calculations, properties in the Fourth Street corridor are estimated to be worth about $12,411,930. With TIF reinvestment, city staff said those values could grow to about $22,463,811, city documents show.

City Attorney Matt Rose emphasized that TIF funds would be aimed at helping property owners to complete private rehabilitations.

"It's not a tax to make more property value increases," Rose said. "It is just a tool to allow people to hopefully increase the property values and if they increase their property values, then more money comes into the tax coffers. But that's not a tax increase necessarily. It's not a requirement that you get up to code. It's just a source, pot of money to where you could use that pot of money to get up to code."

The findings for the latest feasibility study, conducted by the St. Louis-based firm PGAV Planners, note that the proposed TIF redevelopment plan qualifies as a conservation area but not a blighted zone, based on having significant outdated and deteriorating infrastructure with many buildings demanding rehabilitation, city staff wrote in a study summary .

The City Council previously considered implementing another TIF district around the Fourth Street corridor about 10 years ago, but decided not to move forward with it. The city has one existing TIF now, which encompasses downtown DeKalb.

First Ward Alderwoman Carolyn Zasada referenced what she said is a policy paper authored by David Merriman, a professor of public policy at the University of Illinois-Chicago. She said Merriman's research helped her realize how helpful TIF has been in revitalizing downtown DeKalb.

"The findings are this: It's sort of 50/50," Zasada said. "Sometimes it works, sometimes it doesn't. But specifically looking at DeKalb as a case study and looking at how it has been effective for downtown, I think is a good example for how it has been successful in our specific community."

Under the city's plan, tax revenue collected under a Fourth Street TIF could be used for private rehabilitation, property acquisition, relocation, demolition and site preparation, job retraining programs, construction of public works or improvements and more.

In most recent years, the City of DeKalb typically has awarded about $25,000 per project, and the property owner seeking TIF money to aid a development must commit to at least 50% cost-sharing.

A TIF can last up to 23 years before it may expire, officials said.

Barnes said the city would prioritize funding awards on a project-by-project basis.