Cary hopes new taxing district brings redevelopment, but others worry about impact

Cary residents Zeke Hillers and Annel Vazquez said they don't know much about a new taxing district proposed for Cary's downtown, but they have some concerns.

For the past five years, the couple has lived in their apartment on East Main Street - one of more than 140 residential units that could be displaced due to development spurred on by the taxing district.

While officials said it's unlikely any displacement would happen, if development comes to Hillers and Vazquez's front door, it would be their landlord's call on what to do with the building, not theirs.

"I hope we're out by the time anything goes into effect," Hillers said. "I'd be concerned if something happened sooner rather than later."

First, though, the Cary Village Board would need to create a tax increment financing district (TIF).

A TIF is a financial tool that freezes property tax revenue for a certain area and earmarks any revenue beyond that point to help fund redevelopment efforts within the district. The standard TIF lasts 23 years.

Cary is considering creating one along Route 14 from the Fox River to Cary-Algonquin Road, covering much of its Route 14 and downtown corridor.

The village recently held a meeting where numerous speakers, including residents and business owners, raised concerns about what the TIF could mean. The next step will be public hearings and several meetings with other taxing bodies, and if the schedule goes according to plan, the TIF could come for a final vote in August.

The village says it needs the TIF in part due to the aging infrastructure in the area, according to village documents. About 83% of structures are 35 years or older, and the area has not seen much in the way of interest for redevelopment projects.

If the village board creates the TIF, property tax values headed to local taxing bodies - like the school districts - would be frozen at an estimated $2.6 million, according to village documents. Then, if and when property values rise, the property taxes generated from that new value could be used for redevelopment purposes, such as building improvements or public infrastructure.

"A lot of developers we talk to ask us if there are any opportunities to redevelop," Cary Mayor Mark Kownick said. "We're not looking to do what larger communities do. We want to do what's best for Cary."

It would be the third TIF Cary has established, dating back to the 1990s.

"It's consistent with most downtown TIFs," said Philip McKenna, an independent consultant with Ryan LLC, a consultant group hired to help Cary develop the district. "It's certainly not large."

While Cary School District 26 does not support the TIF, others have yet to state publicly where they stand. That includes the Cary Park District, Cary Fire Protection District and the Cary Area Public Library District.

They're waiting until the Joint Review Board meeting in June, during which all impacted taxing bodies discuss the TIF as part of the approval process, officials said.

For Cary School District 26, Superintendent Brian Coleman estimates the TIF could result in the loss of "several million dollars" in potential revenue during the TIF's lifetime.

"While we understand the importance that the Village continues to pursue new economic development and growth for our community, it is equally important for Village officials to understand the importance of maintaining a strong and financially stable school district," Coleman said in an email.

Coleman said he doesn't think the previous TIFs created by the village accomplished their goals and instead had a negative impact on District 26.

The new TIF would encompass the areas previously included in the two prior TIFs.

The first, which expired in 2021, did not see as much redevelopment as was projected, Cary Director of Community Development Brian Simmons said. The new TIF gives some of those properties another chance. The second TIF, meanwhile, was started in 2006 and ran into a wall with the 2008 financial crisis when property values plummeted.

Cary Library Executive Director Diane McNulty said overall, a new TIF wouldn't affect the library much, but there is still concern about potentially lost revenue.

"We're pretty low on the totem pole," she said. "We won't lose as much as the school districts."

Crystal Lake-based Community High School District 155 would also be affected, but officials did not take a stance in a statement on Monday, deferring to the June meeting.

To help offset the potential loss in revenue, the village would earmark $6 million to reimburse other taxing bodies in case they experience increased costs because of development within the district, according to village documents.

Among those concerned were officials and families with the Cary-Grove Youth Baseball and Softball, which uses the baseball fields at the former Maplewood School property, within the TIF boundaries.

President Bob Johnson said he didn't publicly have an opinion on the TIF but is more interested in securing the baseball fields at Maplewood, which in the past has been the target of potential development from the village.

"We've been tossed about in uncertainty for 10 years," Johnson said. "Nobody is addressing what's going to happen to the 500 kids in the program."

Meanwhile, other residents, such as Scott Wilkinson, whose property could potentially be displaced, don't feel their property is in danger.

Wilkinson supports the TIF and would like to see more businesses, houses and economic development in the area.

"The downtown needs attention," he said. "I'm always open to selling my property if they give me a great price for it. ... I'm not married to this house."

For any displacement to happen, a redevelopment project would have to be proposed for those specific areas, Simmons said. At that point, the village and developer would approach a property owner about a sale. The village has also identified dozens of potential spots residents who are displaced could move to.

While Simmons described the occurrence as "fairly rare," the village can use eminent domain, which allows the village through a court proceeding to take control of a property for the purposes of economic development.

This happened recently in Fox River Grove where the village took control of several downtown parcels with the hopes of redeveloping them.

While previous plans for those properties stalled, a new plan calls for a five-story, mixed-use development with 151 residential units, 8,600 square feet of retail and two outdoor seating areas.

Kownick said that there have been no talks in Cary about eminent domain, nor any interest from the village's perspective to pursue that.

"We want to make downtown better, but we're not looking to make sweeping changes," he said.

If a property were to be purchased and tenants left to find a new home, the village "on a case-by-case basis" would look at providing assistance to those displaced, Simmons said.

"Cities don't want to get into the issue of moving people," Simmons said. "It's not something that's desirable. You don't want to have that big of an impact on individuals' lives."