Redpath proposes new TIF to enable subdivision development

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Redpath proposes new TIF to enable subdivision development

Ward 1 Ald. Chuck Redpath is proposing the creation of a new TIF district near Rochester to enable a subdivision development.

The Springfield City Council Committee of the Whole voted on Tuesday to forward the proposed ordinance to the full city council for a vote.

According to a proposed ordinance under consideration by the city council, the new TIF doesn’t have defined boundaries yet, but it would be located east of Hilltop Road and north of White Timber Road.

Developer John Stites of Rochester told the committee the site of the proposed development would be about 56 acres. The area currently has limited access to water and sewer service and will require additional utilities to be run. Stites said the site, which is within Rochester Community Unit School District, was previously eyed for development, but that project was abandoned. He added that a consultant evaluated the site for potential TIF designation and found “a very positive outlook for qualifying the area.”

Ward 7 Ald. Joe McMenamin questioned the designation of a site as “blighted” for TIF purposes if no structures exist there.

“Blight comes in all shapes and forms,” Stites said. “Blight isn’t just disrepair.”

Stites said a need for infrastructure improvements could qualify an area as blighted.

Listen to audio of the committee discussion below.

Springfield Corporation Counsel Jim Zerkle said that the adoption of an ordinance designating a TIF is only the first step in the process, after which comes an extensive study. He said a firm which advises the city on TIF matters has preliminarily indicated the area would qualify for TIF status, but Zerkle cautioned that “there’s a laundry list of items that have to be studied.”

Ward 9 Ald. Jim Donelan noted that any potential TIF has to pass a “but for” test, which asks if development in an area would occur but for the benefits provided by a TIF.

Stites said the project would include 127 lots for single-family homes with an average price of between $265,000 and $325,000. The project would be built in four phases over 10 years, with a $7.1-million cost.

Stites said the project would create about $17.5 million in tax increment, and the development wouldn’t receive any TIF subsidies until it begins to produce an increase in property taxes for the area.

“We’re not asking the city for anything,” Stites said. “We’re willing to take the risk on ourselves.”

Ward 3 Ald. Doris Turner bristled at a comment by Stites regarding a perceived lack of development on “the east side of Springfield.”

“This is not the east side of Springfield by any stretch of the imagination,” Turner said, adding that she’s concerned about encouraging continued development of the outlying areas of Springfield.

“These are not individuals who will participate in Springfield School District 186,” Turner said. “… I do have concern that we are encouraging a subdivision that is going to provide a benefit to Rochester school district, which I think is in direct conflict with the needs and concerns of District 186.”

“Half my ward is in Rochester school district,” Redpath said.

“You just illustrated one of the problems that we have when we continue to encourage development that sends kids to Rochester school district, Pleasant Plains school district, Chatham school district,” Turner said. “… I’m not saying you shouldn’t develop on Hilltop Road; I think that’s absolutely wonderful. What I’m saying is I don’t know that the city should in any way subsidize a Rochester developer that is going to develop a subdivision that is going to send kids to Rochester school district.”

Stites responded that the proposed subdivision would benefit the Dirksen Parkway and Stevenson Drive corridors.

“These are customers for those districts,” Stites said. “These are customers for those corridors – retail customers, gas stations, restaurants. Those are jobs. Those are kids that live in that area; that’s places for them to have their jobs – or adults,  for that matter. That area of town can use as much development as the west side. We need development on that part of town to support the residents there.”

Springfield Realtor Fritz Pfister spoke in favor of the proposed TIF.

“I don’t know if the council knows it, but the state of new home-building in Springfield is not in a recession; it is in a depression,” Pfister said. “We are running 25 percent of pre-recession levels of building in the city of Springfield. The economy can’t recover until housing recovers, and housing can’t recover until the job market recovers. It’s all tied together.”

McMenamin called for the proposal to go before the city’s Economic Development Commission.

“This sets a very new precedent for Springfield,” he said. “… We’ve never done a TIF for new housing that I can remember. This opens the door to something entirely new. We’ve got to be careful about the precedent we set because – others are correct – we’re giving up something here.”

The committee ultimately voted to put the proposed TIF designation on the consent agenda for the full city council.

Springfield currently has eight TIF districts.

Contact Patrick Yeagle at patrick@springfieldbusinessjournal.com.

Corrections: This story has been corrected to fix two typos.

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