MORRIS – Morris is preparing for the possible creation of a second tax increment finance district by making the land more lucrative for future developers.
The Morris City Council passed an inducement resolution during Tuesday’s meeting making all potential TIF-eligible costs eligible from this point forward.
“This whole thing is hinged on the creation of TIF two,” Morris Mayor Richard Kopczick said Tuesday afternoon. “If TIF two is created and if we enter into a TIF agreement with the developers, the clock for eligible expenses would begin today.”
A TIF district is an area in which assessed property values are frozen at their current level. The current TIF district’s property values are frozen at the value they were assessed in 1986, when the district was created.
Tax money generated from the difference between the frozen value and current value of those properties goes into a special TIF fund to be used to improve properties in the district.
With the inducement resolution, developers building infrastructure within the new TIF would have certain construction expenses paid for through the TIF fund, even though the new district is not yet established.
“Those costs incurred before the creation of the TIF will now also be eligible for TIF reimbursement,” Morris Attorney Scott Belt said during Tuesday’s meeting.
Legally, a TIF district is allowed a life span of 23 years unless it receives an extension. After an extension, Morris’s current TIF district is set to expire in 2021 so the city is looking to create a brand new district that will last for 23 more years.
“TIF one is on its last hurrah so we’re looking to carve out TIF two from the existing TIF,” Kopczick said. “It would be on the far east side of the existing TIF and would include marina properties, the community landfill, the sewage treatment facility and the paper mill properties.”
The new TIF also would include the barge loading facility slated to be built by Archer Daniel Midland.
Morris Riverplace II is developing the marina properties, which could be filled with new hotels, restaurants and businesses.
Both ADM and Morris Riverplace are working closely with the city of Morris to advance the creation of a new TIF district. Belt said Morris Riverplace has entered into an agreement with the city promising to reimburse the city up to $50,000 for costs incurred from creating the new TIF.
“There would both legal and engineering fees associated with that,” Belt said.
Kopzcick said if TIF two is realized, the city would still need to negotiate new tax agreements with all other taxing bodies represented in the new tax district.
With the current TIF district, the city of Morris receives 50 percent of TIF funds and Morris school districts receive 40 percent. The remaining 10 percent is considered surplus money and divided among all taxing bodies in the district.
Kopczick said they will have to come up with a new formula if a new district is created.
As of now, the city still has several steps to complete before the new TIF district can become reality.
“If the TIF is never created, then this inducement resolution will be null and void,” Kopczick said. “We just want to be ready to go.”