DeKalb playing favorites with the bandit in the castle

Cohen Barnes owns a building in downtown DeKalb under the name “The Bandit’s Castle, LLC.”

So he’s a bandit who bought a castle. Is this like the tv shows where the psychos leave little clues of their crimes? The imagination runs wild.

The thing with bandits is that, by definition, they belong to gangs. This is more or less what we saw last night, with City of DeKalb enabling Mr. Barnes to return to council to grab more TIF money since his rehab job on the Castle, for which he obtained a development incentive of $400,000 last spring, has hit a snag.

What’s the snag? Nobody anticipated that a 100-year-old building could have water damage and asbestos. No inspection was done, and no money for contingencies was set aside. It’s municipal malpractice, is what it is.

But due diligence doesn’t matter, because the city checkbook is simply always open for Mr. Barnes.

Many thanks go out to Aldermen David Jacobson and Mike Verbic, who voted against the double dipping. (Alderman Pat Fagan recused himself.)

Y’all folks in the Third, Fifth, and Seventh wards have a year to find replacements.

Going deeper on DeKalb Public Library’s expansion and promises

The main thing you need to know is that DeKalb Public Library made promises to DeKalb property taxpayers in 2015, and now is considering breaking its promises. But I couldn’t resist putting together some FAQs for anyone who might like more details.

How much did the expansion cost?
Total cost was $25.3 million. At center was an $11.6 million Illinois State Library construction grant, along with funding from a mix of public sources (e.g., TIF funds from City of DeKalb), loans, and private donations to DeKalb Public Library (DKPL). State grants involve a local match, so part of the non-grant funding covered the local share. Non-grant funding also paid for extras that were not eligible to be covered by the grant.

What was the delay of grant funding about?
The library construction grant is released in four stages based on percentage of construction completed. If a portion of a grant isn’t released during a given fiscal year, it must be re-appropriated the following year. The library received chunks of the grant at 30% and 60% project completion, but release of monies for 90% and 100% completion were delayed during Illinois’ budget impasse. The outstanding amounts, totaling $4.6 million, couldn’t be re-appropriated until passage of another state budget.

Was there a real danger that the grant money would never be released to the library?
Probably not. According to DKPL, the state had already issued bonds specific to the construction grants, so they couldn’t be used for anything else. It was just a matter of re-appropriation when Illinois started passing budgets again. The immediate threat was a shutdown if the library couldn’t find a way to keep construction going. A shutdown of any length would have been expensive in its own right.

Why has controversy cropped up now?
In January, the state released the rest of the grant except for a final installment of $1.1 million. With millions now in the bank, DKPL faces the decision to keep the money or to keep its promises of 2015. At issue is abatement/rebate of some $971,000 back to property taxpayers, and the removal of the emergency property tax levy of $500,000. People who attended library board’s recent special meeting saw the board “leaning” toward remitting only a partial rebate and keeping the levy for operations. Either action would break a promise.

Property tax scenarios the library is considering. Trustees appear to be leaning toward scenario 2 or 3, but only 4 fulfills the library’s promises to DeKalb residents.

Were there alternatives to a bank loan, and/or a property tax levy increase to cover it? Continue reading Going deeper on DeKalb Public Library’s expansion and promises

TIF spending for streets in FY16 did not come anywhere near what DeKalb is claiming

The setup: During the special Committee of the Whole meeting of Monday evening, DeKalb council members were discussing with staff a proposed budget reduction in 2018 for the street improvement program in our two TIF districts, specifically a staff recommendation to cut in half the usual $1 million budgeted for streets in the TIFs. During the course of this discussion, Alderman David Jacobson asked whether the money budgeted in the TIFs for previous years actually got spent. Here’s the actual transcripted exchange:

Jacobson: One other question, only because it was something that was brought up this afternoon to me. I know there was a question last year about– I think it was in the 16-and-a-half budget, if I’m correct, that the council asked for a million-dollar budget in the TIFs for road expenditures, and there was some question as to whether or not that was ever spent?

Public Works Director Tim Holdeman: Absolutely, that was spent. That was in our road program for this year; we have completed that street maintenance, both in TIF 1 and TIF 2 districts. I don’t have the final numbers, but it’s very close to a million dollars. It bid out at about $990,000. So with the engineering, we were right at– we were a little bit above a million, but we could supplement that with Fund 50, so…[crosstalk]

Jacobson: And was that the same in ’16 as well?

Holdeman: For ’16?

Jacobson: The full million for ’16?

Holdeman: Yes, that was the same for fiscal year ’16, yes.

Holdeman’s comments make it sound like the city spent $1 million out of the TIF funds in FY16, another $1 million in FY17, and maybe something in between, during that six-month budget period they call FY16.5. But these claims are not demonstrably true at this point. The FY16 audited numbers are available, and as I reported earlier this year,* the TIF reports filed with the Illinois Comptroller show that not quite $115,000 was spent in the TIF districts on street improvements during FY16 — nowhere near the budgeted $1 million. Continue reading TIF spending for streets in FY16 did not come anywhere near what DeKalb is claiming

Where the city’s interest in Annie Glidden North comes from

***Update 8/12*** Added city manager Anne Marie Gaura and fixed clarity issues ~yinn]

As our city council prepares to discuss a revitalization plan proposal for the Annie Glidden North (AGN) section of DeKalb, we should be aware of the possibility of a “done deal” already worked out by NIU and private interests, promoted by city staff who are ready to sell it hard. As I’ve already explained:

Emails obtained from NIU via Freedom of Information Act requests reveal that in spring of 2014, then-NIU vice president Bill Nicklas met at Campus Cinema with Chuck Hanlon, principal urban planner with Wills Burke Kelsey Associates, and arranged for Hanlon to create “a proposal for us that looks at the commercial strip along Hillcrest and Blackhawk, as well as a wider area in all directions to envision a different neighborhood.”

A hypothesis that the city has already secretly bought into a plan certainly fits with its top-down approach in the matter so far, and would help explain the exclusion of DeKalb Park District and other interested public bodies from discussions of the proposal.

Anyway, there are a lot more of these emails. Coming mostly from the account of then-NIU vice president Bill Nicklas, they trace growing involvement of Nicklas and other public officials in private redevelopment and city rezoning issues from late 2012 through much of 2014.

This business involved “Neighborhood 3” of the three neighborhoods identified collectively as Annie Glidden North (AGN), so our purpose is to look not only at how city players have operated generally, but also at how events in the past might be driving today’s behavior.

Heads up: This post is longer than most, and I’ve placed an album on Facebook containing about two dozen of the emails in a timeline that contains even more details. It’s kind of a project to read all of it, is what I’m saying. Continue reading Where the city’s interest in Annie Glidden North comes from

More Reasons to Put the Brakes on the STEAM Center Project

Several of DeKalb’s city council members balked at making financial or other commitments to the STEAM center project until they have in hand a thorough analysis of its most important source of funding, the soon-to-be-retired Tax Increment Financing (TIF) districts.

Even the most worthy projects are subject to resource limitations, so a peek into the municipal wallet and thoughtful prioritization make good sense, and are probably the most important reasons to apply the brakes.

But there are other reasons, too. Here are three of them.

1. It’s not our job. It’s not automatically the duty of the city to pick up the slack on an NIU project, especially one that NIU itself has decided it can’t spare a dime for. Public safety and infrastructure are supposed to be the names of our games, but now the consultant and administrators are broaching consideration of involvement in site selection, governance, even operations. Boundaries, people.

2. The push is premature. This is a top-down pet project headed by city administrators who have clearly done most of the work, and last week’s special meeting was clearly about hard-selling our new electeds into supporting it. But there is no sign of any corresponding surge in public support. No organization has stepped up to pledge financial support for its construction and operation. It’s an entirely backwards process, which bodes ill for fundraising efforts. If STEAM gets approved at this point, we will all get stuck with the bill.

3. The TIF goal is unclear. As proposed, the project tells us little about ROI, which in a TIF district means raising EAV in the district. In fact, at least initially it would do the opposite, by taking another large property off the tax rolls.

I want to note that counil members David Jacobson and Michael Verbic have asked for financial analyses before (Verbic as a Financial Advisory Committee member), and they’ve been completely ignored in the past. The unified insistence on the TIF analysis is a welcome move, and I hope it means this council aims to reclaim its full authority in stewardship. Fingers crossed.

This is why you didn’t even know DeKalb failed to spend streets allocations on streets

In my last post, I explored how Tax Increment Financing (TIF) dollars for FY2016 were budgeted versus actual spending. This time I hope to explain the discrepancies, at least partially.

TIF districts have their own budgets in their own funds that are separate from the city’s general operating fund called the General Fund. DeKalb currently has two active TIF districts/funds, TIF 1 (AKA Central Area TIF) and TIF 2.

To summarize the situation: For FY2016, $1 million was budgeted for street construction/reconstruction in TIF 1. However, in the budget narrative for the half-year budget called FY2016.5, staff reported that they “[f]unded street improvements in the amount of $600,000” in FY2016, and in the annual TIF report to the state for that fiscal year, it was revealed that less than $75,000 was actually spent for street improvements out of that fund. Continue reading This is why you didn’t even know DeKalb failed to spend streets allocations on streets

Did They Lie about How They Spent TIF?

City of DeKalb budgeted $1 million for street reconstruction out of its FY2016 Central Area TIF District 1 budget, but actually spent less than $75,000 that year for all street work in the district, even though one official budget document indicates much more spending than that.

Here are the facts:

FY2016 Adopted TIF 1 Budget:
Street improvements/maintenance budgeted: 0
Street construction/reconstruction budgeted: $1,000,000 Continue reading Did They Lie about How They Spent TIF?

DeKalb’s Annual TIF Meetings are Finally Scheduled

***Update 3/28: I’m hearing that some are having trouble with the links to the reports, so here’s an alternative way to get at them: 1. Go to the Comptroller’s Local Government Division page, and select the menu item that reads, “Upload TIF Reports.” 2. Scroll down to the bottom of the “Upload TIF” menu list and select “View Submitted TIF Reports.” It should be pretty straightforward from there.***

The TIF Joint Review Board will meet the morning of April 13. The annual TIF reports referred to in the agenda are here:

Central Area TIF Report for 2016

TIF District 2 Report for 2016

The Joint Review Committee usually meets in December or early January, so the annual meeting will be nearly four months late.

Barb City Action Committee & TIF

There are honest people of good faith who belong to the Barb City Action Committee. There really are.

However, it makes good sense to try to tease out the motives for any organized political action, especially one that launched itself out of nowhere and appears to have “shadow” members as well.

Recently I donned my thinking cap, closed my eyes, and envisioned a pack of jackals snarling at each other over the remnants of a carcass. This is the image that occurs whenever I think about TIF projects being pushed for approval by the DeKalb city council as the TIF districts approach expiration.

I think I’m onto something. Continue reading Barb City Action Committee & TIF

Local EAV and TIF Performance

DeKalb County has placed online a variety of property tax information at DeKalbCounty.org. Among the reports are breakdowns of Equalized Assessment Value (EAV) by type of zoning, which include farm, residential, commercial, industrial, and railroad properties.

In City of DeKalb, the two top property tax-producing categories are residential and commercial. You can see below that residential and commercial losses in EAV have driven an overall steady decline since the Great Recession, until last year when commercial property saw a slight rebound (residential again lost a little value).

[easychart type=”vertbar” width=”430″ title=”City of DeKalb EAV in Millions” groupnames=”Total EAV, Residential and Commercial EAV” valuenames=”08, 09, 10, 11, 12, 13, 14, 15″ group1values=”757, 749, 702, 669, 608, 549, 523, 526″ group2values=”695, 685, 643, 611, 555, 499, 474, 476″ minaxis=”473″]

I also checked EAV in the tax increment financing (TIF) districts, because there is no more important sign of success for a TIF district than increased EAV.

[easychart type=”vertbar” width=”430″ title=”DeKalb TIF EAV in Millions” groupnames=”TIF Total EAV, TIF 1 EAV, TIF 2 EAV” valuenames=”08, 09, 10, 11, 12, 13, 14, 15″ group1values=”111, 105, 94, 87, 74, 63, 58, 58″ group2values=”77, 76, 70, 67, 62, 57, 54, 55″ group3values=”48, 48, 45, 42, 38, 34, 32, 32″ minaxis=”31″]

TIF EAV has fallen worse than DeKalb’s overall, and (though not explicitly shown in the chart) has gone from a share of 15% of total city EAV to 11% during the time period we’re looking at. Considering that both TIFs are set to expire in the next couple years, this poor performance should prompt us to question seriously DeKalb’s judgment in selecting redevelopment projects.