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Tuesday, August 5, 2014

The same old 'Trickle Down' story

On July 7, 2014 the Arlington Heights Village Board of Directors unanimously voted 'yes' on adopting the Hickory/Kensington re-development Tax Incremental District (TIF). This vote came after 2 years of Planning Commission and public meetings.

Heller Lumber has been at this location for nearly 100 years and now faces almost certain relocation. About 40 people attended the Village meeting to voice their opposition to establishing yet another TIF District in Arlington Heights.

But alas, the Board followed the same old script set down by the Mulder crowd of the 1990's, they voted to give tax breaks to out-of-town developers, at the expense of local homeowners.

The following letter was e-mailed to the Board on July 14th.
Trustee Mike Sidor was the only trustee to make contact with a comment. 

Dear President Hayes and Village Board Members,

As local representatives, I respect the unanimous 'yes' vote on the Hickory/Kensington re-development project. In my opinion, the reasons that were given publicly for that vote need further examination. For example:

'This is not build it and they will come'. Tax Incremental Financing (TIF) is a supply side stimulant to the local economy that supposedly would not have happened otherwise. The idea is that by constructing housing, shops, and entertainment on a Village determined site will somehow create it's own demand for those services sometime in the future. This is build now through subsidies and hopefully they will come later, with no structural vacancy.

'The government does not build; none of us are going to back up bulldozers'. Actually a Village sponsored jobs program would probably provide a greater local stimulus than a tax subsidy giveaway to the out-of-town developer crowd. Residents with jobs would then look for housing, shopping and entertainment without developer subsidies from local tax revenue. Of course, through TIF districts, the government is in the construction business by offering subsidies at predetermined sites.

'We are trying to create a free market environment'. What makes the Village Board believe it can choose where the free market environment should be created? Designating a location based on 40% to 16% decline in EAV does not automatically give the concern for trying to create a free market. It is contradictory to believe a free market environment can be created by meddling with subsidy incentives.

'These are not tax breaks to developers'. TIF districts are indeed breaks/subsidies given to developers, that are paid for by local taxpayers, to build on a predetermined location. In a non TIF district developers would have to pay for many infrastructure costs. This is why municipalities set up TIF districts in the first place, to subsidize developer costs and attract development.

'The downtown would have never developed without TIF's'. Since we did not have a parallel Arlington Heights downtown that developed without TIF's, it is impossible to prove your statement as true. However, we do know that the downtown would have definitely developed over the years.

Instead, the downtown development would have been market driven based on demand leading to a much lower vacancy rate than we see now. Also, Village taxpayers would have never been saddled with the ongoing expense of the Metropolis Theater.

'We will not use eminent domain'. Unfortunately many residents still remember the International Plaza eminent domain fiasco of 2006. The more we were assured on Monday that eminent domain would only be used in extreme cases, the more uneasy everyone became.

We all appreciate your effort to create a business environment in Arlington Heights. However, the Board continues to use the same old supply side strategies, that are arguably unsuccessful and expensive to most Village taxpayers, while subsidizing the very few. Other strategies such as homeowner tax breaks, local spending initiatives or youth jobs programs should also be considered that would prove cheaper and more effective.

I look forward to your comments.

Sincerely yours,

Keith A. Moens

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