7/22/03

New TIF Bill a Boost for Coles Development

MATTOON -- It's been an uphill struggle for area officials trying to keep water from flowing downhill.

But legislation signed by Gov. Rod Blagojevich on Tuesday in Mattoon will now allow the city to curb flooding in the rural areas outside the city limits, and also establish a new hotel and convention center.

With that, the governor added his signature to a bill that clarifies the qualifications for becoming a tax increment financing district, and expands the definition of "blighted area" -- a prerequisite for establishing land as a TIF district.

"Signing legislation (Tuesday) will allow Mattoon to use tax increment financing revenue to make important infrastructure improvements," said Blagojevich, before an estimated 100 people at Mattoon's Rural King store.

In addition, Blagojevich announced Rural King's planned distribution center expansion that will allow it to distribute to an additional 10 stores. The project is expected to cost $3 million.

The expansion will create another 30 full-time jobs for the Mattoon-area.

"This is a community that has been hard hit by this struggling economy," said Blagojevich. "Infrastructure enhancements and the (new) legislation will give Mattoon the ability to finance key infrastructure improvements and help the local economy overall."

The state's TIF laws allow some of the property taxes within the TIF district to be placed in a special fund, and spent later on development in the district.

The city of Mattoon, along with the Coles Together economic development group, had sought to create a TIF district east of Interstate 57.

"This proposed TIF would enable capturing the real estate tax increment from a $12 million private sector investment in a hotel and convention center to underwrite the cost of providing infrastructure that would enable industrial and commercial development within a 244-acre area," City Administrator Richard Underkofler wrote in a letter to legislators in May.

Watching Governor Blagojevich at the  bill signing are (L to R) Bruce Spear of Rural King, State Representative Chapin Rose, Gary Melvin of Rural King, Jim Watkins and Bill Rowland of Coles Together, Mattoon mayor David Carter and Jeanne Gustafson of Coles Together.

The problem, according to state Rep. Chapin Rose, R-Mahomet, was the area in question may not have met the TIF guidelines even though runoff from the property creates flooding outside the city limits, particularly in the community of Loxa.

He said the funds generated by the TIF district could pay for the construction of water retention devices that would alleviate the flooding.

"However, the term 'chronic flooding' is not defined in the statute," wrote Underkofler.

The Mattoon City Council in March held a public hearing when lawyers argued both sides, if the area east of Interstate 57 met the requirements of a TIF district, or not. TIF allows the city to capture tax dollars for infrastructure improvements in that area for up to 23 years.

Planned are an upscale hotel and convention center to be built in that area. The city council has not yet voted on three ordinances that would create the TIF district.

Rose sponsored an amendment to the state Senate's TIF bill which makes that definition clear, and the governor signed the bill while visiting Mattoon as part of his 14-county "bus tour" Tuesday.

According to Jeanne Gustafson, Coles Together executive director, the bill makes the TIF program a more effective tool for attracting business and industry. "It's a very, very useful program," she said.

State Sen. Dale Righter, R-Mattoon, said the new law gives further control to local governments.

"The more Springfield can loosen the hands of locals for economic development, the better off we are," he said.

Contact Dawn Schabbing at dschabbing@jg-tc.com or 238-6869. Contact Nathaniel West at nwest@jg-tc.com or 238-6860.