Darien Disputes 'Corporate Handout' Argument

DARIEN, IL – The Darien City Council this week approved a special tax district that officials said could help a struggling shopping center.

But the alderman representing the area voted against it.

At the meeting, a resident spoke out twice to oppose the tax increment financing district, or TIF, calling it a "corporate handout."

It is the first such district in Darien. But the city joins plenty of other towns, including Elmhurst, Clarendon Hills and Western Springs.

During public comments, resident Heather Conroy said the district would shift the tax burden to other residents.

"The tax base is artificially shrunk," she said. "That's what you guys are doing."

The tax district is set up for the Chestnut Court shopping center at 75th Street and Lemont Road. Its main store is Ross Dress for Less.

Under state law, a tax district's assessed value is frozen for 23 years. Any property tax income generated from the district's increasing value is to be used 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.

The largely vacant shopping center's taxable value dropped to $4.3 million last year, from $6.2 million in 2019, according to the city.

Alderman Eric Gustafson, whose ward includes the shopping center, said that if local schools needed more money, they must raise taxes on residents such as himself, rather than Chestnut Court.

"Other people have to make up the difference, and I have a problem with that," he said.

However, City Administrator Bryon Vana said more stores in the center would mean more sales tax income for the city, reducing the burden on residents.

Alderman Thomas Belczak agreed. He said the tax burden had already shifted to other residents because the center's assessed value had declined a lot.

"Everyone is already spending more money, not because there's a TIF district, but because the value of that property has gone down," Belczak said.

Later in the meeting, Conroy said the tax district was a "corporate handout" to one person. She was referring to New Jersey developer Kumar Bhavanasi, who bought the complex a couple of years ago.

Conroy also said Darien's aldermen were not good at business.

"There is no guarantee of anything going in there," she said. "I don't know what you guys are doing, but maybe use ChatGPT a little bit more."

Alderman Joe Kenny responded with what he described as myths and facts.

One of the myths, he said, was that the city was undertaking a giveaway.

"Fact, the developer pays upfront, reimbursements only happen after the project succeeds, and only from new tax revenue," Kenny said. "No existing tax dollars are at risk."

He concluded his speech by saying, "Ladies and gentlemen, I used ChatGPT to come up with my research tonight."

Conroy replied that the ChatGPT result depends on the question.

Gustafson noted that the city opened the discussion with the developer with the idea that the project would be multi-use – in other words, both residential and commercial.

Bhavanasi proposed store upgrades and the construction of a four-story, 156-unit apartment building. But shortly after the council approved the project in June, the developer withdrew the residential part.

"When he walked away from that, to me, the TIF was off the table because he wasn't doing the multi-use that we wanted him to do," Gustafson said. "Why he has to use TIF money is beyond me. He shouldn't have bought it if he wasn't prepared to financially go after and redevelop the project. He knew exactly what he was buying."

The council's vote was 6-1 for the tax district, with Gustafson voting no.

The next step is for the city to enter into an agreement with the developer. The city can reimburse for eligible costs, but only if the district's account has money from which to draw.