Tax Subsidy OK For Darien Shopping Center: Consultant

DARIEN, IL – The Chestnut Court shopping center is eligible for a particular tax subsidy under law because it meets the state's "blighted" standard, according to an analysis.

Last week, the city's consultant, Teska Associates, released its report on the mostly vacant shopping center.

The center's taxable value dropped to $4.3 million last year, from $6.2 million in 2019, the report said.

The city is considering creating a tax increment financing district, or TIF, for the property, which is southeast of 75th Street and Lemont Road.

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.

Taxing bodies such as schools often oppose the creation of tax districts. At some meetings about the development, officials from Center Cass School District 66 have attended, but not spoken.

At Monday's City Council meeting, the city's attorney, John Murphey, said he has seen a pattern in TIF debates over the years.

"The school district says, 'We're giving up property,' to which the municipality responds, 'You're not giving anything up because without this incentive, there wouldn't be anything to give up.' So it's that kind of philosophical argument."

In the most recent year, the shopping center paid $86,000 in property taxes to Center Cass, making up less than 1 percent of the district's property tax income, Murphey said.

The City Council is expected to decide next month whether to set in motion the public hearings for a tax district. The process could take four to six months.

Earlier this month, aldermen approved the zoning for the shopping center's overhaul, which was to include a four-story apartment building. A week later, the developer, Kumar Bhavanasi of New Jersey, withdrew the apartment part of the project.

In a memo for Monday's council meeting, City Administrator Bryon Vana said Bhavanasi has been a pleasure to deal with since he bought the center two years ago.

"When we told Kumar the City would like to hold the Memorial Day carnival at Chestnut Court, he immediately committed to make the center available," Vana said. "He has maintained a high level of professionalism and openness, and we look forward to a continued excellent working relationship."

Vana said the city recommended that the council pursue the tax district.

Mayor Joseph Marchese also said he liked the idea.

"My concern is that without redevelopment of this center, this center will probably die," the mayor said. "The tax bill will continue to go down. It will hurt the school districts and all the taxing bodies. We have an opportunity to see this center redeveloped and become a productive element of our community."