The state’s second largest high school district, based in northwest suburban Arlington Heights, is going to court with the village of Mount Prospect over an allegedly improper tax increment financing district.

Township High School District 214, based in Arlington Heights, is the state’s second-largest by enrollment. In includes six high schools: Buffalo Grove, Elk Grove, Hersey, Prospect, Rolling Meadows and Wheeling. The complaint field June 19 in Cook County Circuit Court said Mount Prospect erred designating a 178-acre downtown TIF district this past January.

The district said the village circumvented the spirit of a state law that puts time caps on TIF districts by creating a new TIF district that substantially includes properties that have been covered by a TIF district for more than three decades, effectively keeping property tax revenues from those parcels away from the school district for several more years going forward. School districts generally account for about two-thirds of property tax bills.

According to the complaint, the district includes 246 parcels on both sides of the Metra commuter rail tracks. Portions of the land in question have been included in TIF districts as far back as 1985, when the village created a downtown TIF district for land north of the train tracks. The village amended and expanded the district in 1988 and 1993, and in 2006 extended the term of the district from 23 to 35 years while also expanding its geographic footprint.

In 2016, the village terminated the downtown TIF district to establish the Prospect and Main TIF District, incorporating many of the same parcels. The school district accused the village of relying on the same set of factors — age, deterioration, inadequate utilities and lack of community planning — to create, extend, expand and recreate a TIF district for up to 54 total years.

When a joint review board met prior to the establishment of the new district, the school district voted that the subject property did not meet eligibility criteria. The village disagreed, and adopted ordinances creating the district on Jan. 17.

According to the complaint, school officials “made a good faith effort” to resolve concerns, including providing the village a report from its expert land use consultant challenging whether the village satisfied TIF eligibility factors and proposing terms for an intergovernmental agreement that would partially address the school district’s concerns.

School officials maintain the parcels in question do not suffer from inadequate utilities or a lack of community planning and claim deterioration is not present to a meaningful extent. They say state law requires TIF district approval include a determination the land within the district would be unlikely to be developed absent the TIF benefits, and further said the village’s determinations the land “is threatened to become blighted and therefore eligible as a conservation area are clearly erroneous, arbitrary, unreasonable and capricious.”

The school district further said the downtown redevelopment plan is too vague to meet TIF law requirements. It wants the court to issue a declaratory judgment finding the property does not qualify for TIF benefits under state law and to force the village to dissolve the Prospect and Main TIF District so the school district does not have to suffer the loss of property tax revenue or be forced to increase its tax rate.

Representing the school district in the matter is Franczek Radelet, P.C., of CHicago.

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