PARTIAL TRANSCRIPT

2009-03-24 Starline TOD – TIF Public Hearing Minutes (Full Transcript PDF)

VILLAGE OF SCHAUMBURG

STAR LINE / T.O.D. TAX INCREMENT FINANCING DISTRICT (TIF) PUBLIC

HEARING

TUESDAY, MARCH 24, 2009 – 7:30 p.m.

Mr. Brian Costin (74 Holmes Way, Schaumburg, IL) has many comments and wanted to know if the Joint Review Board roll call attendance can be done. Mr. Huff stated that it was not a Joint

Review Board meeting, but a public meeting for the Star Line and the Joint Review Board had their meeting on February 17, 2009. Mr. Costin commented that no public comments were allowed.

Mr. Huff stated that is not true because Mr. Costin you were able to speak and you passed out documentation at the Joint Review Board meeting.

Mr. Costin stated that he couldn’t speak at great lengths at the JRB meeting and that this would be the meeting that he could speak in more detail.

Mr. Costin has many concerns regarding this TIF district and they are grouped into four areas:

1. Transparency

2. Qualification of the subject area, and subsets of the subject area in regards to the conservation district

3. Over-subsidization of the subject area with $15 million dollars a year already going to the subject area in the form of taxes and property exemptions

4. The tax implications for Schaumburg Taxpayers and the Taxpayers of District 211, 54,

Harper College, Schaumburg Township Library, Schaumburg Township, Schaumburg

Park District, and Cook County.

Mr. Costin has a concern regarding the existing Olde Schaumburg Center TIF District and how that precedent will affect the proposed STAR Line TIF district. Currently there is no annual budget and no detailed expenditures for this TIF district online. The Village still publically claims that Schaumburg collects no property taxes, but yet it has collected in excess of $21

Million dollars in property taxes since the beginning of the OSC TIF district, a tax that affects all Schaumburg Taxpayers and not just those in the TIF district. Of those $21 Million dollars in property taxes no one single cent of that money has showed up on taxpayers property tax bills.

The taxpayers are being misled, some would say fraudulently. Instead of the money going to the

Schools, Park Districts, Libraries as was told on their property tax bills, this money is being diverted for other purposes into the TIF district with no information or accountability. This is not just a case of not being transparent; it is about a Village, along with others, is intentionally and fraudulently misleading local taxpayers to believing that they pay nothing for TIF districts and all their money goes to the government bodies that are listed on their tax bills. Mr. Costin stated also, from the initial proposal of the Olde Schaumburg Center TIF district of $7 Million dollars it has undergone 5 revisions of its master plan and now stands as a $49 million dollar TIF district.

If this happens to the $120 million Star Line TIF district, the cost can explode to well over $800 million dollars in increased property taxes over the life of the project. That brings me specifically to the current Star Line TIF District proposal. Comprehensive Transparency procedures have been completely left out of the Star Line TIF District proposal. The Village has done the bare minimum in meeting the legal requirements and has show a carless disregard in informing its citizens in the formation and costs of this project. The Village has not posted the Star Line/T.O.D. Redevelopment Plan and Project online. The Village has not posted the Housing Impact Study online. The Village has not posted the Redevelopment Project Area Eligibility

Study online for the public to see. The Village has not revealed until only a few hours before this meeting the actual Project Cost Estimates, unfortunately without expenditure itemization as

required by Illinois TIF Act in Section 65 ILCS 5/11-74.4-3, which not only requires itemized cost estimates but requires expenditures to be used to alleviate the blighting factors used to justify the TIF. There has been no mention of the $120 million dollar price tag for this project anywhere on the Schaumburg Village website, in public meetings. Mr. Huff, wouldn’t you agree that the citizens of Schaumburg and the citizens of all the affected taxing bodies have a right to this information and that the Village should be communicating with its residents about the $120

Million size of this project, and what the Village plans on spending this money on?

Mr. Huff mentioned that the Village of Schaumburg sent out over 1400 letters to all property owners and residents within the Star Line TOD-TIF area and we have gone through great lengths to make sure the public is informed.

Mr. Costin stated that this is the largest tax increase proposal in the history of the Village of Schaumburg and does not only affect the people inside the TIF district, but it affects everyone. The people inside of TIF districts pay the same taxes as everyone else and it affects all the taxing bodies. Mr. Costin asks that Schaumburg post all of the relevant documents regarding the Olde Schaumburg Center TIF district and the proposed Star Line TIF district on the Village of Schaumburg’s website including:

• Old, Olde Schaumburg Center Annual Reports from 1989.

• Detailed expenditures of both the OSC TIF and the proposed Star Line TIF district.

• All of the documents created by the Busse Consulting company in preparation for this project.

• Notification in the Schaumburg Cracker Barrel publication in regards to the size of the

project, what the Village plans to spend the money on, and accurate description on how this will affect their property tax bills.

• Contact information for all of the members of the Joint Review Board so that the

community can contact their representatives with their views on the project.

• Show support for reforming property tax bills so they are fully transparent and accurately reflecting of where Schaumburg property tax dollars are going.

Mr. Costin commented that on the $120 million property tax with the current law not a single cent will be reflected on people’s property tax bill.

Mr. Huff stated that this is not a TIF district, but a proposal that will be considered by Village Board on April 14, 2009 in Parker Hall. In terms of property taxes, the Village of Schaumburg does not levy a property tax and never has in the last 45 years. In regards to property tax billing, that is an issue with Cook County because the villages and cities do not issue tax bills.

Mr. Costin commented that it wasn’t under the control of the Village, but just to show support.

Mr. Huff commented to stick with the subject of the TIF because there are many people that would like to speak.

Mr. Costin stated that there are significant flaws regarding the eligibility study. According to the eligibility study done by Busse Consulting there are 5 factors that combined qualify the Star Line T.O.D. district as a conservation area. All 5 of those qualifications are suspect. The first qualification that was given was:

1. Excessive Vacancies: On page 24 of the Eligibility study, which can be found on www.schaumburgfreedom.com on the Schaumburg Transparency project page, it is cited that there are excessive vacancies to a meaningful extent in Sub Areas 1 and 3. But On Page 16 of the Eligibility Study that further breaks down these areas showed that the Vacancy rate of these areas for 2008 was 19%. This is neither unusual are unexpected for the Village of Schaumburg. In the Daily Herald publication from October, 25 2007 Village Employee, Matt Frank, stated that Schaumburg’s Office Vacancy Rate stood at 19%. Crain’s Chicago Business on December 29, 2008, stated that suburban Cook County office vacancies quote “overall vacancy rate grew to 23.2% during the fourth quarter, compared to 22.5% during the third quarter and 21.9% during the fourth quarter of 2007.” This is significantly more vacancies than the “excessive” levels in Schaumburg. Compared to the regional these projects aren’t in need of a conservation status in fact they are outperforming peers across Cook County Suburbs.

Mr. Costin asked how do these two areas qualify as having excessive vacancies if they are virtually identical rates as the rest of the Village of Schaumburg and do you consider all of Schaumburg Office space as having excessive vacancies? Mr. Huff stated yes and they have been exceedingly high since 2002. They dipped in 2004 and 2005, stabilized and shot up dramatically the last six to eight months.

Mr. Costin asked if you are raising taxes on all of the other industrial, office, retail, and residential properties in Schaumburg. Mr. Huff stated that the Village of Schaumburg does not levy a property tax and asked Mr. Costin to stick with the TIF issues. Mr. Costin stated that this is a top property tax proposal and you can not claim that you are not collecting property tax.

Where does the $120 million come from if it does not come from a property tax?

Mr. Huff stated that it is not a levied property tax.

Comments from a couple residents, where does it come from?

Mr. Huff stated that it is redistributed from the other taxing districts like any other TIF district.

Mr. Costin commented which comes from property taxes.

Mr. Huff stated again that it is not a levied property tax.

Mr. Costin commented that it is a levied property tax and is very misleading and disappointed.

Mr. Costin asked how can you these areas qualify underneath the conservation TIF district requirements for excessive Vacancies when they are outperforming the regional average significantly and are at median levels for Schaumburg.

Mr. Huff stated that overall Schaumburg always outperforms the local area.

Mr. Costin stated that the TIF district isn’t needed for redevelopment.

Mr. Huff stated that it is needed.

Mr. Costin commented that he will go on because it is obviously a sticking point.

Mr. Costin continued with:

2. Excessive land coverage

The Excessive Land coverage in the Act is defined as excessive land coverage and overcrowding of structures and community facilities, but the act gives no real scientific guidelines to measure this.

Mr. Costin apologizes to the audience because he wasn’t allowed to have the contact information for the Joint Review Board and would have liked to address them.

Mr. Huff stated that it is proprietary information and is not allowed to be given out per the Freedom of Information Act.

Mr. Costin commented that in areas 2 & 4 are described as having excessive land coverage to a “meaningful extent”. In areas 1, 3, 5 there is no excessive coverage to even a limited extent. The majority of the project area is not experiencing excessive land coverage. All of the structures and facilities in Areas 2 & 4 were approved by the Village and if there truly is excessive land coverage then why did the Village approve these areas in the first place. Even if you accept that there is excessive land coverage, the Village’s plan does not describe in any detail how they plan to remedy this situation, or what specifically needs to be changed for this to be no longer classified as an “excessive land coverage” area. Mr. Costin commented that this is purely a subjective valuation that anyone can make up whether or not it has excessive land coverage and asked if there any scientific tool available which determines excessive land coverage?

Mr. Busse disagrees that this is not excessive land coverage and stated that there are all different types and styles of developments. Mr. Busse explains that you can have 100 thousand square feet of space over 150 thousand square feet of land. If it is on a one story building versus having a 10 story building with a smaller footprint, then you are not going to have excessive land coverage if it were spread out horizontally. With respect to your accusation that there is no plan to remedy this, the Village of Schaumburg spent a long time pulling together the Transportation Oriented District plan, which is incorporated into this plan. Mr. Busse stated that this plan would encourage people to use other transportation besides their car and tie in the streetscape with the adjacent open space and Convention Center.

Mr. Costin commented that it is purely subjective to how one perceives the area should be and everyone has their own values as whether or not a walking environment is good or if they want to park their car. People like their cars and that’s why they park them. Mr. Costin commented that it is purely subjective of the Village of Schaumburg to say that this is excessive land coverage because it is not the type of buildings that the village wants and what should be respected are the property rights of the people that are already there.

Mr. Costin continues with:

3. Deleterious land use or layout

The assumptions by eligibility study are completely subjective values by the reviewer of the project and not observed scientific fact that can be reviewed by this body or the public. Any property in any location in Schaumburg can be described as deleterious land use if they simply believe that it should be situated in some other way than it is. The fact remains is that these properties were built to the users specifications and they shouldn’t be bulldozed or removed because politicians have a different idea of what the proper land use is.

Mr. Huff stated that the village has no plans to buy property. Mr. Costin stated that in the document that he had received today, the Village plans on spending $94.8 million dollars in private investments and building 2- 20 story buildings that do not currently exist.

Mr. Huff stated that those are comparables to indicate the type of development that could occur there, but the Village of Schaumburg is not going to build any buildings there.

Mr. Costin commented that the village is saying that they are going to assist in building, but not changing the properties, that is incorrect. One of the principles of our country is respect for property rights; politicians shouldn’t be able to subjectively create deleterious land use opinions to justify $120 million dollars in new property taxes. We should value the rights of every property owner and let them determine what land use makes them best of. The Village offers no proposals to remedy or modify these lands to have them come into code of subjective land use or layout views of the Village of Schaumburg.

Mr. Costin asked how do you scientifically define proper land uses or layout if overwhelmingly these properties are following the codes of the Village of Schaumburg. There was a portion in the eligibility study that showed whether or not these buildings were up to code and it was found only to a minor extent that some buildings were in compliance. So, how can these be considered improper land usage if they are within village code?

Mr. Huff stated that the village code changes every three years. Since those buildings have been built, the building codes have changed at least fifteen or twenty times.

Mr. Busse stated that deleterious land use and layout is different factor than building code violations.

Mr. Costin commented that this is completely subjective and anyone can argue that this qualifies as a conservation district because they believe it’s deleterious.

Mr. Costin continues with:

4. Lack of community planning

A lack of community planning is completely outside the control of the existing landowners in this TIF District Area. It is also out of the control of the Taxpayers that are being asked to finance this $120 million dollars in expenditures. There have been a number of community plans over the years that encompass the entire Village of Schaumburg and specifically the Star Line T.O.D. area district plan from 2008. This is another backdoor qualification for the TIF district as virtually any parcel of land can be described as having a lack of community planning that is acceptable to the individuals who want to implement a TIF district. Mr. Costin questioned since the lack of community planning qualification is both satisfied by the Village and because this requirement is completely subjective wouldn’t you agree that this cannot be used as an objective qualification for justifying $120 million dollars in new property taxes & spending underneath the

TIF district laws in the state of Illinois?

Mr. Huff stated that the redevelopment plan meets the state statutes.

Mr. Busse commented that in terms of lack of comprehensive planning, that factor is considered in context of when the area developed, not now. This is why the village has pulled together the T.O.D. plan and redevelopment plan and project. Some of the deficiencies that had occurred when this area was planned to accommodate Motorola (East of Meacham Road), had the same land use designation as west, where Motorola is currently.

Mr. Costin continues:

5. Declining or Lagging Equal Assessed Valuation (EAV)

The subject area EAV grew 26% from 2002-2008. Well in excess of the inflation rate over the time period, which means the declining valuation of the declining and lagging is invalid. In regards to the Lagging EAV argument it is true that the Subject area has grown less quickly than other areas in Schaumburg. The comparison is 26% growth in the subject area compared to 37%

Village wide is misleading. This is due to the fact that there are many new properties previously not assessed were added to the Village’s EAV over this time period and it’s hard to compare statistics when there are two different statistics being used. The additional 9% in EAV is due to additional properties. Mr. Costin asked is there is any information regarding the new properties that have been built from 2002 to 2007 alters the numbers in regards to the subject area versus the rest of Schaumburg. Mr. Huff stated that the Village only analyzed the 175 acres and not the other 19 square miles of the Village of Schaumburg.

Mr. Costin commented that another point of consideration is that due to the Schaumburg

Convention Center & Hotel being a Tax Exempt property its EAV is not considered within this report. At an EAV at 33% market value, the $228 Million dollar convention center would add $75.4 million dollars to the EAV of the subject area. The subject area’s existing EAV of

$92,872,000 would be bumped to over $168 million dollars. If all property is valued in the subject area the EAV of the proposed area has increased from $73.5 million to $168 million since 2002. This is an increase of 128% over the time period studied in this project. This is more than quadruple of what the whole village is. This conservation area does not have a declining or

Lagging EAV, in fact when taking into consideration the Convention Center & Hotel it is probably the most rapidly expanding area in Schaumburg over the studied. Mr. Costin asked if

Mr. Huff would agree that taking into account all the properties in Star Line TIF district area including the Convention Center & Hotel, that there is no possibility of it qualifying underneath the conservation standards for a TIF district.

Mr. Huff disagrees and stated it does qualify.

Mr. Costin asked if Mr. Huff doesn’t contend that the Convention Center would increase the EAV. Mr. Huff stated that it is not a taxable entity.

Mr. Costin commented that there is still development in the area and it is not being recorded under the qualifications of this project.

Mr. Costin continues:

In reviewing the five Conservation Area factors given by the Village not a single one is sufficient in justifying the approval of this TIF district. Furthermore, project area 5 which contains the

Schaumburg Renaissance Convention Center & Hotel and the proposed site of a future performing arts center contains 0 out of the 13 requirements to be considered a blighted or conservation area. Additionally, the existing Schaumburg Renaissance Convention Center & Hotel already receive massive subsidies from the taxpayers. In 2009, it is anticipated that this project will receive more than $15 Million in taxpayers’ subsidies through sales taxes and property tax exemption and there is anticipated to be a $2 million dollar loss, which will come out of the operating fund of the Convention Center. Mr. Costin asked why is project area 5 being considered for inclusion in this TIF district when it even the Village asserts that it does not qualifies under any of the Conservation Area Factors and it is already receiving more than $15 million in Taxpayer subsidies and massive subsidies anticipated at least until 2041 when the mortgage will be finally paid off?

Mr. Huff stated that when the Star Line station is built it can be tied to the Convention Center for direct access.

Mr. Costin commented even though that area doesn’t qualify under any standards under the TIF law of Illinois.

Mr. Huff stated that if Mr. Costin were to look at the T.O.D. plan that was prepared, one of the villages goals were to make sure that the Convention Center is connected directly to the Star Line train station for ease of movement between O’Hare International Airport and the subject area.

Mr. Costin continues:

Property Tax Implications

Mr. Costin commented that TIF district taxes show up on property tax bills as $0. Not a single cent of this is accounted for on property tax bills. The amounts that are shown to be going to your taxing bodies are being diverted to the TIF districts, away from the institutions that the taxpayers are led to believe where the money is going to. Mr. Costin asked what these diversions would mean for each taxing body and is there a break down. Mr. Huff stated that whatever percentage that those taxing bodies pay of the total tax bill. The members of the Joint Review Board did make recommendation for approval of the plan.

Mr. Busse stated page 40 shows percentages of each taxing district. For instance with District

211, less than 1% of their EAV is contained within this TIF district which will continue to generate revenue for them. Harper College is less than .5%; School District 54 is approximately

1.6%. The Village of Schaumburg has the largest share of EAV which is at 2%. The Library district is at 1%.

Mr. Costin wanted to know what the raw amounts would be, which can be answered later.

Mr. Busse stated that it is $92 million dollars, which is the base EAV of the project area.

Mr. Costin said that the expenditures are $120 million.

Mr. Busse stated that they would be allocated with whatever their tax rate is at the time.

Mr. Costin asked how are the tax diversions being communicated to the public. The numbers don’t exist anywhere on public websites nor on the Freedom of Information Act request that he did. The public deserves to know before the village decides on this project. If the Village raising taxes on all of the other industrial, office, retail, and residential properties to reduce vacancies in this area, wouldn’t the Village just be contributing to more vacancies elsewhere in Schaumburg because of the increased cost in taxes. Mr. Costin commented that you can’t use tax dollars to improve one TIF district without it coming at the cost of increased expenses to other taxpayers and less prosperity elsewhere.

To sum this all up the Village of Schaumburg has been very secretive in regards to this project it needs to dramatically increase transparency and raise public awareness of this project including the $120 million sticker price. Mr. Costin recommends instead of the Village Board vote on this have this TIF district placed on the ballot as a referendum and letting the people of Schaumburg decide weather or not we want this project.

Out of the 5 qualifications areas cited by the Village none are adequately addressed or achieved in this TOD area. There are no excessive vacancies in this area, the area is on par with vacancies in the rest of Schaumburg, and vacancies are at a lower rate than surrounding communities. Excessive Land coverage is not objectively defined nor does the Village present a plan to address these concerns in any meaningful fashion. Deleterious land use or layout is completely subjective to the eyes of the beholder in this case, that’s the Village. Anyone can find objections to land use layouts if they believe that some other land use is more preferred. Lack of community planning is on the shoulders of the Village, they do have a various plans encompassing the project area including a 2008 Star Line T.O.D. comprehensive plan, not that this should matter because the taxpayers who are footing the $120 million property tax increase and the landowners in the subject area have no control over creating a community plan and shouldn’t be penalized through higher property taxes. Mr. Costin commented that there is no significant declining or lagging Equalized Assessed Value for the subject area when taking into consideration the newly built Schaumburg Convention Center & Hotel. When taking this into account the EAV has increased 128% from 2002 and is certainly one of the highest performing areas in all of Schaumburg if not the entire region. Project Area 5 of the Star Line TIF district proposal experiences 0 out of the 13 qualification for the blighted/conservation area proposal. It already is receiving in $10- $15 million dollars a year in taxpayer subsidies and is in no further need of subsidy. It is astonishing that the Village would try to argue that this area would or should qualify for the TIF district when it doesn’t meet any of the requirements according to the Illinois TIF Act. There has been no disclosure on any level as to how this will affect the taxpayers’ bottom line and no dollar amount with how this will affect the taxing bodies by this project.

Mr. Costin commented that that public needs to be informed prior to the commitment of $120 million dollar plan being approved. Mr. Costin believes that the Joint Review Board should not approve this project when it is not blighted. Mr. Huff stated that this is not a Joint Review Board meeting. Mr. Costin replied he knows and continued with it doesn’t qualify as a conservation area. This project is completely unnecessary and a recipe for waste, fraud, and abuse of the taxpayers trust and money. Mr. Costin wholeheartedly opposes this project. If not a single dollar of taxes will show up on citizens property tax bills for this project not a single dollar should be spent. From the very start of this proposal the Village has fundamentally flawed in every conceivable way.

Mr. Costin said that for the sake of the people of Schaumburg and the taxpayers, he hopes that none of the Village Board members and trustees will support this project.

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