Plans to form a new tax increment financing district in Arlington Heights that includes the International Plaza will proceed despite protests by business owners who fear the decision will endanger their shops in the mall.
By a 6-3 vote Monday night, the Village Board gave preliminary approval to the TIF district. A formal vote will be held July 1.
Trustees who favored the plan said area business owners should not immediately worry about condemnation of their properties.
“I think the fear is that the village is going to displace tenants, residents and businesses. That fear is unfounded,” Trustee Steve Daday said.
The TIF district would include about 35 acres at the northeast corner of Golf and Arlington Heights Roads. Owners of businesses within the district , as well as some of their neighbors, have criticized the plan.
A TIF district freezes taxes at current levels and earmarks additional taxes from the increased value of the property to pay for improvements.
Lawyers for the owners of International Plaza vowed to fight in court against TIF plans that include the shopping center.
Many business owners who operate in the predominantly Korean mall have said they thought the TIF plan would hurt or even kill existing businesses. Although there are vacant lots within the TIF boundaries, the center’s lawyers said the mall is thriving, with an occupancy rate of 98 percent.
Robert Gildo, a Wheaton attorney who specializes in fighting TIF districts, said International Plaza does not qualify for a TIF district. He said a long legal battle could occur if plans for the TIF move forward.
A lawyer for Capital Fitness Inc., a tenant in International Plaza, also promised legal action if the TIF district is created.
A report prepared by Kane, McKenna and Associates Inc., consultants hired by the village to study a potential TIF district, said the area meets the criteria for a TIF.
During previous discussions on the district, Robert Rychlicki, executive vice president of the consulting firm, said the current equalized assessed valuation of the property in the proposed district is $6 million. He said that figure could rise to $27 million if the property is redeveloped appropriately.
According to the report by Rychlicki’s firm, land within the proposed district is not used well.
The report says the area was developed in a piecemeal fashion and includes mixed zoning that allows both commercial and residential development.
Although a TIF district must contain some underdeveloped or blighted property, not every parcel of property in it needs to be defined as blighted or underdeveloped for the whole area to qualify for TIF district designation, according to the report.
The report estimated that redevelopment of the area could cost between $11 million and $22 million.
“The tough decisions will come down the road when we have an actual plan to consider,” Trustee Tom Stengren said.
