Sitting between an apartment high-rise and a gas station, the Arlington School of Music seems to be a visual and aural misfit.
The cacophony of traffic noise competes with strains of a Bach Brandenburg Concerto wafting through the air from speakers attached to the school’s exterior. Inside, restoration efforts on the 1850s-era building have adorned door and window frames with Greco-Roman accents.
A refreshing bit of European ambience amid suburban clatter to some, the school would better serve its hometown of Arlington Heights by being razed and replaced with condominiums, as far as village officials are concerned.
The school’s owner and its backers, of course, view it differently.
This is more than a dispute about one town’s cultural or architectural heritage. The music school could be the vehicle by which the very constitutionality of one of the nation’s most popular tools for refurbishing communities is challenged.
The dispute is another instance where property owners believe they are being strong-armed by local government into turning their land over to a private developer-all in the name of the public good. Disputes like these have flared across the Chicago area, from South Holland to Palos Heights to Cicero and elsewhere.
The focus of their anger is one of the most arcane but increasingly significant parts of municipal finance: the tax-increment financing district.
Under so-called TIFs, the amount of money local taxing bodies receive from property owners within the TIF district is frozen for up to 23 years while bonds are sold to redevelop the land inside. Any increase in tax collections resulting from the redevelopment goes to pay off the bonds instead of being funneled to local taxing bodies.
Municipal planners hail the state’s 16-year-old TIF law as a much-needed mechanism for refurbishing blighted areas. But the districts have drawn fire because they effectively limit the amount of tax revenue that goes to other taxing bodies in the community.
Now, the opponents are challenging the law’s basic fairness. One of those challenges is coming from Nico Anagnostopoulos, the throaty-voiced director of the Arlington School of Music.
“I will go to jail before they take this property,” Anagnostopoulos said.
Anagnostopoulos has hung a “Don’t Tread on Me” flag alongside the Stars and Stripes above the front door of the school, 7 W. Eastman St.
He also has hired lawyer Joseph Morris, president of the conservative Lincoln Legal Foundation, which is a public interest law center that emphasizes property rights. (In an unrelated matter, Morris also is representing Republican members of the Cook County Board in their fight against Richard Phelan’s restoration of abortion services at County Hospital.)
Morris argues that under the state’s TIF law, a municipality’s prediction of future TIF-generated tax revenue doesn’t meet constitutional standards of “public use.”
“The constitution (state and federal) forbids government from taking private property except for public use and payment of just compensation,” Morris said. In cases such as that in Arlington Heights, “the local governments argue that when they take private property and give it to another private user, the increased tax revenue equates to a public use.”
Originally designed to help blighted areas, TIFs increasingly are being used in more affluent places-Arlington Heights, Deerfield, Lake Forest, Oakbrook Terrace and Skokie, to name just a few.
And the number of property tax TIF districts statewide has gone from 10 with $1.7 million in extended taxes for the 1981 tax year to 237 districts with $100.9 million in extended taxes for the 1990 tax year. Chicago alone had 12 TIF districts as of the 1990 tax year, the last year for which statewide figures are available.
“That is a chunk of money that is being diverted to the TIFs from other local governments,” such as school districts and park districts, said Mike Klemens, spokesman for the Illinois Department of Revenue. “That’s the most common complaint we get, and we get it after the fact.
“(Residents) ought to go in with their eyes wide open and realize that for up to 23 years there will be no property-tax base growth in that district.”
The state’s TIF law has been challenged in court before, Morris said, but “no challenge to the constitutional validity of the TIF legislation, with respect to the public use question, has gone to the Illinois Supreme Court.”
Moreover, he said, supreme courts in other states have divided on the general issue; Michigan’s has upheld a similar statute, while Kentucky’s has struck one down.
As for the music school, the village filed a lawsuit last fall to acquire its property through eminent domain, said Bill Cooney, deputy director of planning and community development for the village. Morris has been defending the music school against the condemnation.
Early last month, Judge Alexander White of the Cook County Circuit Court ruled in favor of the village’s condemnation efforts. Both sides are hoping to go to trial by the end of this year to determine “just compensation,” or a fair price for the land.
After that, Morris said, he will go to the Illinois Appellate Court, where he acknowledges he has an “uphill battle” to convince the appeals judges to overrule their own prior rulings.
Michael Leroy, a Chicago attorney representing Arlington Heights in the dispute, believes the principles behind the TIF law are sound.
“I think Illinois law has long been settled with respect to upholding takings for this purpose and redevelopment purposes in general,” he said.
The music school isn’t alone in resisting TIF-inspired redevelopment efforts. Dr. Rita Driscoll of Palos Heights has put up a fight, too.
Driscoll’s great-great-grandfather, Theodore Lucas, immigrated from Luxembourg and settled in the Palos area in the 1840s. Eventually the Lucas clan homesteaded more than 1,000 acres.
But gradually the family has sold off land or had it taken through government condemnation, beginning with the first documented condemnation of the family’s land about the time the Bolsheviks were taking over Russia.
Now Lucas’ progeny are down to their last 10 acres, which Palos Heights wants to condemn to make room for a TIF-financed shopping center and parking lot for a proposed Metra station near 114th Street and Southwest Highway.
“It’s ironic,” said Driscoll, a physician and medical consultant. “All of our families immigrated to this country for the right to speak freely without repercussion from the government and to own a piece of land without having it confiscated by the government for state purposes.”
South Holland octagenarian Margaret Gouwens successfully fought efforts last year to raze or move her home to make way for a TIF-funded retail development. She has lived in the home her entire life. South Holland eventually gave up its condemnation efforts.
And in Cicero, Brian Gaughan, operations manager of the family-owned S&S Motor Express, so far has fended off a developer’s efforts to condemn the firm’s truck terminal for a discount and grocery store development, financed through a TIF district.
A former Arlington Heights police officer, Gaughan tells of a real estate developer coming to the trucking company’s office about 10 months ago and telling him: “If you don’t sell (the terminal land) to me, Cicero is going to condemn it and sell it to me.”
While praising TIF districts as an effective redevelopment tool, municipal officials acknowledge that some of them have failed to meet expectations.
In fact, both of Arlington Heights’ TIF districts, including the one encompassing the Arlington School of Music, are such cases.
“Both TIFs right now are running at a deficit, but that’s not unusual because there’s a lot of upfront costs that you pay off over the life of the TIF, which is 23 years,” Cooney said.
Supplanting the music school with a 61-unit condominium development would help, village officials say.
Ray Franczak, president of the company that is developing the eight-story condo complex, said the project could be done without acquiring the music school parcel. “Sure. The project could be developed without that,” he said. But “it’s not the best alternative.”
