TIF districts in East St. Louis could be among the oldest in the state, if extended

The two governing boards for East St. Louis School District 189 are split as to whether to support the renewal of two Tax Increment Financing districts in the city.

The East St. Louis 189 school board approved a resolution to support the city’s intent to lobby the state for TIF districts 1 and 3A to be extended for another 12 years on Thursday. On Monday, though, the district’s state-appointed financial oversight panel voted to table its vote until the city could provide more information.

Tax Increment Financing means property values are frozen at their current levels for the duration of the TIF, and any additional revenue generated by a rise in property values is funneled into a special fund used for for infrastructure improvements and economic incentives with the district. The intent is to help property that wouldn’t see new growth without the public investment.

During the term of the TIF, the city keeps the difference between the frozen taxes and the new taxes the development in the district generates. Cities can extend the TIF district once. To extend it a second time, as East St. Louis is trying to do, state legislation is required.

Under the extension, the city is proposing 50% of the revenue collected by the TIF Districts 1 and 3A be distributed back to the affected taxing districts.

The two TIF districts cover most of the city, and support private projects including the Casino Queen, Slay Industries, McDonald’s, Parson Place, Schnuck’s, Walgreen’s, the Charlie Stock Truck Stop, East St. Louis Port District, Broadview Hotel and the Murphy Building.

“Losing these mechanisms will hinder our ability to continue providing a competitive development environment as well as strain our capacity for roadway, water, sewer and general quality of life improvements for our businesses and residents,” East St. Louis Mayor Robert Eastern III said in a letter to the taxing districts.

Within the school district, TIF funds are used for building maintenance and upkeep. District 189 Director of Strategic Partnerships Sydney Stigge-Kaufman said in an email that, in the past, the funds had been used for roof repairs in multiple buildings, stadium lights and heater repairs in multiple buildings. Stigge-Kaufman said the district provided the City of East St. Louis with a list of TIF-eligible expenses totaling $500,000, or $250,000, twice a year.

While TIF Districts 1 and 3A are set to expire in different years — 2021 and 2026, respectively — they both already have been extended 12 years beyond the initial 23-year term that’s more typical. If the city is successful in lobbying the state for a second 12-year extension, the TIF districts in East St. Louis would be 47 years old by time they expire.

According to the Illinois State Comptroller’s office, the oldest active TIF District in the state will turn 42 years old in November.

Keith Moran, of Moran Economic Development in Edwardsville, is working with the city of East St. Louis to lobby for the extension. He said the city wanted to “continue the momentum” within the district to address derelict buildings.

“There’s a lot of need, still, and there’s not a lot of money to help fill those needs,” Moran said. “There’s a lot of restoration and rehabilitation in process. COVID did us no favors, of course. …

“Basically, we want to finish the job.”

Members of ESTL 189’s Financial Oversight Panel said they needed more information before taking it to a vote. Specifically, members want a report on what the balances have been used for in the past, a description of what the city anticipates the balances will be used for if the district is extended, and the audit results of the TIF funds.

Garret Hoerner, the school district’s attorney, told the financial oversight panel that the state required all taxing districts to consent to the extension “by practices, not statute.” Besides the city and schools, other taxing districts within the TIF districts include St. Clair County, East St. Louis Township, East Side Health District, East St. Louis Park District and the Metro East Sanitary District.

On Thursday, Superintendent Art Culver told the school board that 189 was “the largest taxing body, so we’ll get the lion’s share of” the revenue that they generate.

“I don’t think we should vote to extend the TIF at all,” said financial oversight panel member Sr. Julia Huiskamp, citing the lack of a “roadmap” for what the money would be used for, and concerns about the audit.

The letter from Eastern to the taxing districts lists planned TIF improvements for the future: Choice Neighborhood, police protection, school resource officers, school safety zones, street lights and riverfront development, amongst other items.

FOP Chairman Ranadore Foggs said he agreed with Huiskamp.

“I was left with a little bit of misgivings about that presentation,” Foggs said in reference to the city’s presentation to the panel in September. “It didn’t leave me feeling good, but I don’t know what else we can expect.”

The next financial oversight panel meeting is Nov. 30.