This blog is maintained for the sole purpose of allowing the people of Peru and those interested in the cities of the Illinois Valley to express their views.
“It doesn’t take a majority to win, just a tireless minority that will keep starting brush fires in the mind and hearts of their fellow men.” Samuel Adams
Does anyone else wonder why it took 4 1/2 years to reach an amicable solution to this TIF dispute? Does it have anything to do with the purchase of the econolodge property which is justifiably located within the TIF area?
Peru decided to pay up in order to take the attention and scrutiny away from the TIF agreement they are about enact in secret with the Econolodge developer who will inevitably be, you guessed it, Janko. They don't do anything unless it enriches friends and supporters and the secret dealings going on right now with Janko will suck huge TIF dollars into Janko's pocket at the expense of all area taxing bodies. TIF sucking is heating up in Peru and Harl is taking good care of those who provide him campaign cash and voting support. Also, Peru's rubber-stamp aldermen really have no clue what they are giving up with these TIFs and cannot be trusted to make intelligent decisions regarding TIF scams. Come to think of it they can't be trusted to make intellingent decisions on any topic.
1:24 More from the conspiracy pipeline. What are the taxing bodies getting with old hotels without occupants? What friends are involved in this old Econolodge building? You must know something? Your information is terrible and your sources must have dried up.
About the only thing that TIF money should be used for on the "old hotel" property in question is the acquisition of the property (condemnation costs) and the demolition of the buildings. The property has water, sewer, and electricity extended to it. No other government assistance should be necessary to develop the property. Any development should be paid for 100% by the developer and the increased property taxes should be collected from whoever ends up owning the property. THEY DO NOT NEED HELP.
4:09 Please contact a expert TIF attorney before making your thoughts about what a TIF can do. In every TIF, the details are in black and white on what are the TIF eligible reimbursement costs. The developer pays the entire portion of the real estate taxes that is not a debate. They are reimbursed according to the agreement. Currently the property has no income and the real estate taxes have not been paid for years. It's tough to be critical on the city crew for this one. We are fortunate that we still have some pretty smart elected leaders that got development on this very big eyesore. Think twice before your next campaign to replace them all.
7;50 I do not have to contact a expert TIF attorney to know that this is a misutilization of the TIF law. AS for a TIF attorney this is how they make money and legal or illegal they will support if for a CLEAN OR DIRY DOLLAR. Can you explain why it has taken 4 1/2 years to get any form of negotiated agreement? Is there a motel involved previously built in the last number of years? Just questioning, but has this TIF and a $1 million dollar road to a theater have any relationship?
what did I say that was wrong. TIF funds can be used to reimburse the city for the costs of acquiring and clearing the property. The point I am making is that no deals should be made to whoever eventually develops the property. Yes, I agree that the owner will pay all the taxes when they purchase the property. However, it has been the practice in Peru and most of the Illinois Valley that the incentive offered to the developer is that increment. So - lets say a guy named "K" buys the recently cleared property. This usually happens a very reasonable price because it is considered "distressed" - but it does have quite a bit of potential. Anyway, "K" builds something on it. Lets say a hotel. This greatly increases the value of the property. "K" turns around and sells the hotel to himself or more appropriately another company he owns - shuffling some money around that has some additional tax benefits beyond the scope of this post. Les call this company "K Hospitality". "K Hospitality" then runs the hotel and pays the taxes. Meanwhile - "K" has a deal with the TIF to get the money held in the TIF escrow (the amount of the tax increase). The justification is that "K" took a risk and deserves the money for doing so. Follow me now.... "K" purchases the property and develops it. Sells it to himself, sheltering money from one corporation to another, and then gets a check for the duration of the TIF Zone. All for taking very little risk.
It gets even more interesting in Peru if the development turns out to be retail. In that case, outside of any enterprise zone or TIF Zone incentives is something called the Sales Tax Rebate. This is when "K" gets a cut of or in some cases ALL for the municipal share of sales tax. This is incentive to "K" for "taking risk."
7:50 PM, Ya ok, I'll contact local TIF Attorney Herb Klein (who makes big bucks from local governemnts via local TIFs) who will certainly give me an unbiased opinion of how great TIFs are. BTW, the only role these "pretty smart" local leaders you talk about play in the TIF process is to put the rubber-stamp on the proposals the TIF Suckers present them. Don't try to sell that baloney to me that Peru's elected officials are anything but "incompetent". I know better and I'm not buying it. 90% of them need to be replaced.
1;24 Wrong again? According to the NewsTribune you owe the Janko group a apology. The developer of the old hotel property is not Janko. Where is the conspiracy?
5:42 You have the imagination of Peter Pan. What do you estimate the cost to demolish a hotel to be? And how will that person absorb the cost of the demolition? This is easy.....they will sell the property at their risk to pay for the demolition. Do you believe that the TIF tax increment will pay them for the cost of the demolition overnight? Never! It will take them the entire TIF timetable to get back that cost. They will make money by putting up a profitable business. Your interesting notes about tax shelters and paying yourself is one for science fiction. Well, the other point is why didn't you take your idea and turn it into your American dream? Because, it doesn't work. The property was for sale for years, the old hotel was a eyesore for everyone. Why didn't you save the city? 12:04 What does a imaginary road have to do with this piece of property? Please enlighten us.
that is not what I said 12:07. I said the TIF can be used for that. And no, it will not happen overnight. That is why the city "finances" it with the repayment coming from the increased taxes. TIF's are supposed to be used to pay for the infrastructure required to make the property appealing to development. There is already a road next to the property - so that is not required. Can't you read????? I'd say no. based on your comment.
Bottom line - The TIF that included the "new hotel" that was built several years ago was intended to be used as a direct payment to the developer. That is how they set it up and that is why the school and the county took it to court.
How long do you think the financing is on that hotel? 25 years maybe? Hmmmmmm.... wouldn't it be nice to have a large percentage of your annual tax bill applied to your mortgage? That is what this was set up to do.
12:07 I think you should contact a good CPA. Buying a piece of property as a corporation and leasing it back to an another corporation (your own) is legal.
You can also go to IRS.GOV search corporate tax laws and this type of transaction has a whole section devoted to how to set it up.
12:53 creative response but not quite accurate. TIF agreements have a time period and that time period is usually 20 years, this has probably about 16 years left. The reimbursable expenses are defined and not used to pay mortgages, the city also may recoup cost of any improvements that are reimbursable. 1:05 You have fallen asleep during your business class at the local Junior High. You can buy any piece of property and lease it out, that is not disputable. You still have to pay the property taxes, that is not disputable. So if company A owns the building then company B pays a rent to company A, most probably company A pays the property tax. Either way one company pays the taxes! If you own both companies you still have to pay the tax bill. Your cities have to provide for services like police, fire. Schools have no additional service because there are no kids to educate with this development.
the arrangement that was made with the developer of the new hotel was that they would get a large portion of the increased tax revenue. So - developer builds hotel. Hotel owner buys hotel using a loan. (developer and hotel owner are actually the same person, but different corporations). So, hotel company gets a lone and buys the hotel (or maybe even leases it, who knows, it is not important). The important thing is that the hotel owner is paying the additional tax. The developer gets and pockets the additional tax. The net effect is that the taxing bodies only get the original (almost non existent)original tax for quite a few years. The developer keeps the increment - possibly using most of it to finance the project.
The developer's and the owner's risk and costs are reduced through government subsidy on a piece of property that did not require the subsidy to develop.
The fun part will come after the TIF expires and the owner sells the 20 to 25 year old hotel that is in serious need of updates to a lesser franchise which does not keep it up until the city needs to condemn the property an start the cycle over again.
8.58..don't hold you breath for an apology for Janko or anyone else that use the free market system to better the community...people here are just "angry-at-life" in general people who don't want to work hard and succeed..so, they just rip those that make things happen..so sad....
What are Peru's attorney fees for TIF that the Dimmick School recently accepted with Peru and specifically what did Peru additionally agree to at Dimmicks gain?
8:54. I have not seen one comment berating our Free Market Economy. The comments have been about cronyism... Using government programs and handouts to get the edge over business competition. The TIF in Peru that we are talking about was created for the benefit of one developer in an area that did not need assistance to be developed. In effect, it was created to divert the tax payer's money from government programs like schools, police, roads and given to the developer to compensate them for building a motel which was already built. That is the definition of Crony Capitalism - government diverting funds to selected businesses based on their association with pubic officials and / or ability to lobby the government body. This is what is wrong with Illinois, the Illinois Valley, and the City of Peru.
Your right on that. My son cuts grass and stores his lawn mower in my garage, he pays me rent and can deduct it from his taxes. I don't claim the rent as income and we both make benefit. That is the way to beat the system.
1:05 - who exactly said that was a problem. Yes, it is perfectly legal. What is questionable is government buddies setting up special tax rebates - diverting tax revenue back to your pocket. Thus creating an unfair business atmosphere. Favoritism, cronyism, call it what you want. The developer in question basically told our city council and mayor that there would be consequences if they did not set up this illegal TIF.
Doesn't anyone think it is funny that there are so few land developers in the Illinois Valley? And that there is essentially only ONE that has anything to do with commercial development in Peru?
Amen 5:25 AM. You nailed it! In fact, the TIF shenanigans perpetrated on honest taxpayers by greedy developers and phony city officials is the exact opposite of "Free Market Capitalism". Any unfair advantage or favoritism given to a particular company or developer defeats the whole purpose of honest competition and the free market. That is why I can say without any reservations that Peru officials and their connected contracors and businesses are in fact CORRUPT!
Honest competition is having a TIF, everybody has the same opportunity to take this eyesore land and get the TIF. You just don't have too many businesses that want to do that.
12:36 - you are correct. IF and only IF the TIF is set up the what the way the concept was originally conceived in the 1950's.
1. Use the tax increment to finance infrastructure - road improvements, water and sewer lines, power lines, street lighting, etc.
2. Use the tax increment to finance demolition of old structures and condemnation costs.
3. Use the tax increment to offset financing costs that a developer might have.
The TIF's in Peru are written by the Developer. In this case, the developer paid Peru's attorney fees to write the TIF. It was conceived after the fact! Nobody else had the opportunity to get the same deal because the deal was sealed in some back room in Peru between Council Members and the Developer.
3:20 TIF is by law used for those purposes you described, I'll give you that. However, the TIF agreements go with the property, not the developer. There is quite a bit of old property in Peru that is included in the TIF area. Every developer has those same TIF deals if they want to invest in the junkyard located around I-80. So far it doesn't look like too many in LaSalle, Peru or Ottawa want to use those old properties and the TIF agreements. You also will see many logistics areas along I-80 that have effectively used TIFs to their advantage. To have a TIF, the taxing bodies must agree. No backroom deals, no secret handshakes and those TIFs are not the jackpot you would think when it comes to developing some of these properties. Some nearby cities have set up many TIFs in residential areas without action.
3:58, you are describing how it is supposed to be done. Not how it is actually done in Peru.
In Peru, the developer decides he is going to do something. He then calls that politicians than demands that a TIF be created if one does not already exist. Besides TIF's, the developer also demands sales tax rebates, or just a plane old bag of money like the attempted deal for the movie theater. The only reason the move theater deal went south was because the NT accidently published the details.
My personal favorite is the development that hosts the new wally world. The developer demanded a rebate on all sales taxes generated on that sight. Peru said OK - making the assumption that a new store would move in. Then... wally world moves to the new development. Hilarious. Luckily it worked out for the most part and the old wally world was able to be rented to some new stores. But, those new stores generate less sales tax than the old wally world.
3:58 PM, You're missing the point that the TIF we are talking about in Peru that was challenged by Dimmick School and LaSalle County was essentially a secret backroom deal that emerged from the shadows to be hastily enacted by Peru's incompeptent city council specifically for the financial benefit of a particular developer to exploit a specific piece of property that did not qualify as "blighted" in the first place. So it was dishonest and a rigged deal from the very start. That is the Peru way of doing business.
You all must not know how to read a legal document. When a TIF is developed the whole process is open and all the incentives are spelled out. All the taxing bodies must agree of you end up in court. That simple. Now go ahead and tell me that i am drinking the kool-aid but this is done in so many cities across the country are they all corrupt?????
6:36 & 3:58 and most other comments above: Interest is created by the knowledge you have displayed in all of your comments on TIF's. Knowing that the value of the property is of the highest value in Peru it is unfair to apply or grant a TIF. As for the building being already constructed and than applying for a TIF a condition has been created that is no more than a manipulation of the law and setting up a very unfair competitive business enviroment in comparison to present and future businesses. Does anyone have a idea of how much money the financer and owner of the motel will make off of this TIF, how much money has been spent on lawyer and court costs on account of this TIF and what agreements were made to Dimmick and LaSalle County Board to pass it after a battle of 4 !/2 years? The TIF is no more than another example of poor prior business practices started by the last administration and council favoring their most important "good old boy". The present group of city representatives by now should have exhausted most long term agreements which have firmly stood in their path and manage Peru with a open and frank expression of themselves.
10:59 am, All taxing bodies did not agree and that has been well documented for the past 4 plus years. While it did not end up in court it certainly was contested from the very beginning by all taxing bodies becuase it was an obvious scam to all of them. The city settled with L-P high School first but the other two taxing bodies held out for a fair deal. Only now that Peru's nit-wit officials have decided to pay up to those taxing bodies has it been settled. Now the city can really start funneling the cash to the developer that created the scam in the first place as was the plan all along.
The TIF that you are talking about involves the north portion of route 80. I would imagine that it was developed to spur development north of 80, in which has old gas stations and some very distressed properties. I don't think anybody can logically oppose that this area needs some incentives to clean up the properties in which many are abandoned. Reading the local news it was noted that the TIF area has some developer looking to demolish the old hotel and put up another development. I would believe that without some TIF incentives this would not have happened. This will benefit Peru and other development should follow suit. The former Mayor Baker established this TIF and its working. Was it poor business practices to establish this TIF? I guess that's debatable. I don't think the current group of officials or other city of Peru residents will argue against the TIF prospects. And I don't think anybody in Dimmick will argue against the tax base that all of the Peru business area contributes to the Dimmick schools.
I don't know that much about the property values, enough to say that a old hotel, a dumpy property and many abandoned businesses don't contribute much to anybody. Maybe the city was right in the approach to establish the TIFs? Maybe its was right to let it be without the TIF? Either way, if it works it was a good idea. If it doesn't work it wasn't a good idea. Sit back and judge. I'm sure every community that has TIFS has the same arguments about who benefits, and if it works or not.
"La Salle County and the school district took the city of Peru to court in 2011, arguing the area occupied by Holiday Inn Express and Suites does not qualify for TIF because construction of the hotel began in 2010, before the TIF was designated."
Boss Harl had almost five years to settle this even though he was not in office when it was created. But there is something like $400K that is being held in escrow which he and his cronies wanted a piece of. Some of this was supposed to go to TIF administration, some to "infrastructure", then the kickback to the developer, etc.
When Dimmick already has it all and is gaining even more what would entice it to be consolidated with LaSalle and Peru? The only reason Dimmick draws the taxes from the North end of Peru is account of a busing controbversy. Since we are playing the game of "Who was the Mayor When _ _ _ _ "? Baker was Mayor when the Developer offered to finance the TIF that includes his already built hotel and Baker was Mayor when the taxes of the retail section were agreed upon for the Dimmick school if Dimmick would cover busing.
12:47, what are you smoking? The school district and the school district boarders where determined before anyone on the blog was born. It has nothing to do with an agreement with Peru about bussing. All of that property up there is not even in Peru Township - it is in Dimmick Township and has been since the 1830's. And before you flame me about the Townships not having anything to do with the school districts - I realize that. But as originally designed, each township is supposed to have a school district.
11:18 The initial phase "what are you smoking" was a complete give away to whom the authorship belonged to - Richard Head of near by Dimmick. Richard Head is no more than a amatuer con artist who would tell you Dimmick Township owns the John Hancock Building on one of his more honest days.
39 comments:
Does anyone else wonder why it took 4 1/2 years to reach an amicable solution to this TIF dispute? Does it have anything to do with the purchase of the econolodge property which is justifiably located within the TIF area?
$420K that the TIF suckers won't get.
Peru decided to pay up in order to take the attention and scrutiny away from the TIF agreement they are about enact in secret with the Econolodge developer who will inevitably be, you guessed it, Janko. They don't do anything unless it enriches friends and supporters and the secret dealings going on right now with Janko will suck huge TIF dollars into Janko's pocket at the expense of all area taxing bodies. TIF sucking is heating up in Peru and Harl is taking good care of those who provide him campaign cash and voting support. Also, Peru's rubber-stamp aldermen really have no clue what they are giving up with these TIFs and cannot be trusted to make intelligent decisions regarding TIF scams. Come to think of it they can't be trusted to make intellingent decisions on any topic.
1:24 More from the conspiracy pipeline. What are the taxing bodies getting with old hotels without occupants? What friends are involved in this old Econolodge building? You must know something? Your information is terrible and your sources must have dried up.
About the only thing that TIF money should be used for on the "old hotel" property in question is the acquisition of the property (condemnation costs) and the demolition of the buildings. The property has water, sewer, and electricity extended to it. No other government assistance should be necessary to develop the property. Any development should be paid for 100% by the developer and the increased property taxes should be collected from whoever ends up owning the property. THEY DO NOT NEED HELP.
4:09 Please contact a expert TIF attorney before making your thoughts about what a TIF can do. In every TIF, the details are in black and white on what are the TIF eligible reimbursement costs. The developer pays the entire portion of the real estate taxes that is not a debate. They are reimbursed according to the agreement. Currently the property has no income and the real estate taxes have not been paid for years. It's tough to be critical on the city crew for this one. We are fortunate that we still have some pretty smart elected leaders that got development on this very big eyesore. Think twice before your next campaign to replace them all.
7;50 I do not have to contact a expert TIF attorney to know that this is a misutilization of the TIF law. AS for a TIF attorney this is how they make money and legal or illegal they will support if for a CLEAN OR DIRY DOLLAR. Can you explain why it has taken 4 1/2 years to get any form of negotiated agreement? Is there a motel involved previously built in the last number of years?
Just questioning, but has this TIF and a $1 million dollar road to a theater have any relationship?
what did I say that was wrong. TIF funds can be used to reimburse the city for the costs of acquiring and clearing the property. The point I am making is that no deals should be made to whoever eventually develops the property. Yes, I agree that the owner will pay all the taxes when they purchase the property. However, it has been the practice in Peru and most of the Illinois Valley that the incentive offered to the developer is that increment. So - lets say a guy named "K" buys the recently cleared property. This usually happens a very reasonable price because it is considered "distressed" - but it does have quite a bit of potential. Anyway, "K" builds something on it. Lets say a hotel. This greatly increases the value of the property. "K" turns around and sells the hotel to himself or more appropriately another company he owns - shuffling some money around that has some additional tax benefits beyond the scope of this post. Les call this company "K Hospitality". "K Hospitality" then runs the hotel and pays the taxes. Meanwhile - "K" has a deal with the TIF to get the money held in the TIF escrow (the amount of the tax increase). The justification is that "K" took a risk and deserves the money for doing so. Follow me now.... "K" purchases the property and develops it. Sells it to himself, sheltering money from one corporation to another, and then gets a check for the duration of the TIF Zone. All for taking very little risk.
It gets even more interesting in Peru if the development turns out to be retail. In that case, outside of any enterprise zone or TIF Zone incentives is something called the Sales Tax Rebate. This is when "K" gets a cut of or in some cases ALL for the municipal share of sales tax. This is incentive to "K" for "taking risk."
That is how the TIF Suckers operate.
7:50 PM, Ya ok, I'll contact local TIF Attorney Herb Klein (who makes big bucks from local governemnts via local TIFs) who will certainly give me an unbiased opinion of how great TIFs are. BTW, the only role these "pretty smart" local leaders you talk about play in the TIF process is to put the rubber-stamp on the proposals the TIF Suckers present them. Don't try to sell that baloney to me that Peru's elected officials are anything but "incompetent". I know better and I'm not buying it.
90% of them need to be replaced.
1;24 Wrong again? According to the NewsTribune you owe the Janko group a apology. The developer of the old hotel property is not Janko. Where is the conspiracy?
7:50, why would anyone want to get themselves all dirty talking to a TIF Lawyer? Talk about the bottom of the bottom feeders.
9:03, because they actually understand how a TIF works,
5:42 You have the imagination of Peter Pan. What do you estimate the cost to demolish a hotel to be? And how will that person absorb the cost of the demolition? This is easy.....they will sell the property at their risk to pay for the demolition. Do you believe that the TIF tax increment will pay them for the cost of the demolition overnight? Never! It will take them the entire TIF timetable to get back that cost. They will make money by putting up a profitable business. Your interesting notes about tax shelters and paying yourself is one for science fiction.
Well, the other point is why didn't you take your idea and turn it into your American dream? Because, it doesn't work. The property was for sale for years, the old hotel was a eyesore for everyone. Why didn't you save the city?
12:04 What does a imaginary road have to do with this piece of property? Please enlighten us.
that is not what I said 12:07. I said the TIF can be used for that. And no, it will not happen overnight. That is why the city "finances" it with the repayment coming from the increased taxes. TIF's are supposed to be used to pay for the infrastructure required to make the property appealing to development. There is already a road next to the property - so that is not required. Can't you read????? I'd say no. based on your comment.
Bottom line - The TIF that included the "new hotel" that was built several years ago was intended to be used as a direct payment to the developer. That is how they set it up and that is why the school and the county took it to court.
How long do you think the financing is on that hotel? 25 years maybe? Hmmmmmm.... wouldn't it be nice to have a large percentage of your annual tax bill applied to your mortgage? That is what this was set up to do.
12:07
I think you should contact a good CPA. Buying a piece of property as a corporation and leasing it back to an another corporation (your own) is legal.
You can also go to IRS.GOV search corporate tax laws and this type of transaction has a whole section devoted to how to set it up.
12:53 creative response but not quite accurate. TIF agreements have a time period and that time period is usually 20 years, this has probably about 16 years left. The reimbursable expenses are defined and not used to pay mortgages, the city also may recoup cost of any improvements that are reimbursable.
1:05 You have fallen asleep during your business class at the local Junior High. You can buy any piece of property and lease it out, that is not disputable. You still have to pay the property taxes, that is not disputable. So if company A owns the building then company B pays a rent to company A, most probably company A pays the property tax. Either way one company pays the taxes! If you own both companies you still have to pay the tax bill.
Your cities have to provide for services like police, fire. Schools have no additional service because there are no kids to educate with this development.
2:45 -
that is not what I said. Let me simplify it.
the arrangement that was made with the developer of the new hotel was that they would get a large portion of the increased tax revenue. So - developer builds hotel. Hotel owner buys hotel using a loan. (developer and hotel owner are actually the same person, but different corporations). So, hotel company gets a lone and buys the hotel (or maybe even leases it, who knows, it is not important). The important thing is that the hotel owner is paying the additional tax. The developer gets and pockets the additional tax. The net effect is that the taxing bodies only get the original (almost non existent)original tax for quite a few years. The developer keeps the increment - possibly using most of it to finance the project.
The developer's and the owner's risk and costs are reduced through government subsidy on a piece of property that did not require the subsidy to develop.
The fun part will come after the TIF expires and the owner sells the 20 to 25 year old hotel that is in serious need of updates to a lesser franchise which does not keep it up until the city needs to condemn the property an start the cycle over again.
This is crony capitalism at its finest.
8.58..don't hold you breath for an apology for Janko or anyone else that use the free market system to better the community...people here are just "angry-at-life" in general people who don't want to work hard and succeed..so, they just rip those that make things happen..so sad....
What are Peru's attorney fees for TIF that the Dimmick School recently accepted with Peru and specifically what did Peru additionally agree to at Dimmicks gain?
8:54. I have not seen one comment berating our Free Market Economy. The comments have been about cronyism... Using government programs and handouts to get the edge over business competition. The TIF in Peru that we are talking about was created for the benefit of one developer in an area that did not need assistance to be developed. In effect, it was created to divert the tax payer's money from government programs like schools, police, roads and given to the developer to compensate them for building a motel which was already built. That is the definition of Crony Capitalism - government diverting funds to selected businesses based on their association with pubic officials and / or ability to lobby the government body. This is what is wrong with Illinois, the Illinois Valley, and the City of Peru.
1:05
Your right on that. My son cuts grass and stores his lawn mower in my garage, he pays me rent and can deduct it from his taxes. I don't claim the rent as income and we both make benefit. That is the way to beat the system.
1:05 - who exactly said that was a problem. Yes, it is perfectly legal. What is questionable is government buddies setting up special tax rebates - diverting tax revenue back to your pocket. Thus creating an unfair business atmosphere. Favoritism, cronyism, call it what you want. The developer in question basically told our city council and mayor that there would be consequences if they did not set up this illegal TIF.
Doesn't anyone think it is funny that there are so few land developers in the Illinois Valley? And that there is essentially only ONE that has anything to do with commercial development in Peru?
Amen 5:25 AM. You nailed it! In fact, the TIF shenanigans perpetrated on honest taxpayers by greedy developers and phony city officials is the exact opposite of "Free Market Capitalism". Any unfair advantage or favoritism given to a particular company or developer defeats the whole purpose of honest competition and the free market. That is why I can say without any reservations that Peru officials and their connected contracors and businesses are in fact CORRUPT!
10:08
Honest competition is having a TIF, everybody has the same opportunity to take this eyesore land and get the TIF. You just don't have too many businesses that want to do that.
12:36 - you are correct. IF and only IF the TIF is set up the what the way the concept was originally conceived in the 1950's.
1. Use the tax increment to finance infrastructure - road improvements, water and sewer lines, power lines, street lighting, etc.
2. Use the tax increment to finance demolition of old structures and condemnation costs.
3. Use the tax increment to offset financing costs that a developer might have.
The TIF's in Peru are written by the Developer. In this case, the developer paid Peru's attorney fees to write the TIF. It was conceived after the fact! Nobody else had the opportunity to get the same deal because the deal was sealed in some back room in Peru between Council Members and the Developer.
3:20 TIF is by law used for those purposes you described, I'll give you that. However, the TIF agreements go with the property, not the developer. There is quite a bit of old property in Peru that is included in the TIF area. Every developer has those same TIF deals if they want to invest in the junkyard located around I-80. So far it doesn't look like too many in LaSalle, Peru or Ottawa want to use those old properties and the TIF agreements. You also will see many logistics areas along I-80 that have effectively used TIFs to their advantage. To have a TIF, the taxing bodies must agree. No backroom deals, no secret handshakes and those TIFs are not the jackpot you would think when it comes to developing some of these properties. Some nearby cities have set up many TIFs in residential areas without action.
3:58, you are describing how it is supposed to be done. Not how it is actually done in Peru.
In Peru, the developer decides he is going to do something. He then calls that politicians than demands that a TIF be created if one does not already exist. Besides TIF's, the developer also demands sales tax rebates, or just a plane old bag of money like the attempted deal for the movie theater. The only reason the move theater deal went south was because the NT accidently published the details.
My personal favorite is the development that hosts the new wally world. The developer demanded a rebate on all sales taxes generated on that sight. Peru said OK - making the assumption that a new store would move in. Then... wally world moves to the new development. Hilarious. Luckily it worked out for the most part and the old wally world was able to be rented to some new stores. But, those new stores generate less sales tax than the old wally world.
3:58 PM, You're missing the point that the TIF we are talking about in Peru that was challenged by Dimmick School and LaSalle County was essentially a secret backroom deal that emerged from the shadows to be hastily enacted by Peru's incompeptent city council specifically for the financial benefit of a particular developer to exploit a specific piece of property that did not qualify as "blighted" in the first place. So it was dishonest and a rigged deal from the very start. That is the Peru way of doing business.
You all must not know how to read a legal document. When a TIF is developed the whole process is open and all the incentives are spelled out. All the taxing bodies must agree of you end up in court. That simple.
Now go ahead and tell me that i am drinking the kool-aid but this is done in so many cities across the country are they all corrupt?????
6:36 & 3:58 and most other comments above:
Interest is created by the knowledge you have displayed in all of your comments on TIF's. Knowing that the value of the property is of the highest value in Peru it is unfair to apply or grant a TIF. As for the building being already constructed and than applying for a TIF a condition has been created that is no more than a manipulation of the law and setting up a very unfair competitive business enviroment in comparison to present and future businesses.
Does anyone have a idea of how much money the financer and owner of the motel will make off of this TIF, how much money has been spent on lawyer and court costs on account of this TIF and what agreements were made to Dimmick and LaSalle County Board to pass it after a battle of 4 !/2 years?
The TIF is no more than another example of poor prior business practices started by the last administration and council favoring their most important "good old boy". The present group of city representatives by now should have exhausted most long term agreements which have firmly stood in their path and manage Peru with a open and frank expression of themselves.
who was the mayor when the hotel began construction?
10:59 am, All taxing bodies did not agree and that has been well documented for the past 4 plus years. While it did not end up in court it certainly was contested from the very beginning by all taxing bodies becuase it was an obvious scam to all of them. The city settled with L-P high School first but the other two taxing bodies held out for a fair deal. Only now that Peru's nit-wit officials have decided to pay up to those taxing bodies has it been settled. Now the city can really start funneling the cash to the developer that created the scam in the first place as was the plan all along.
The TIF that you are talking about involves the north portion of route 80. I would imagine that it was developed to spur development north of 80, in which has old gas stations and some very distressed properties. I don't think anybody can logically oppose that this area needs some incentives to clean up the properties in which many are abandoned. Reading the local news it was noted that the TIF area has some developer looking to demolish the old hotel and put up another development. I would believe that without some TIF incentives this would not have happened. This will benefit Peru and other development should follow suit. The former Mayor Baker established this TIF and its working. Was it poor business practices to establish this TIF? I guess that's debatable. I don't think the current group of officials or other city of Peru residents will argue against the TIF prospects.
And I don't think anybody in Dimmick will argue against the tax base that all of the Peru business area contributes to the Dimmick schools.
I don't know that much about the property values, enough to say that a old hotel, a dumpy property and many abandoned businesses don't contribute much to anybody. Maybe the city was right in the approach to establish the TIFs? Maybe its was right to let it be without the TIF? Either way, if it works it was a good idea. If it doesn't work it wasn't a good idea. Sit back and judge. I'm sure every community that has TIFS has the same arguments about who benefits, and if it works or not.
"La Salle County and the school district took the city of Peru to court in 2011, arguing the area occupied by Holiday Inn Express and Suites does not qualify for TIF because construction of the hotel began in 2010, before the TIF was designated."
Boss Harl had almost five years to settle this even though he was not in office when it was created. But there is something like $400K that is being held in escrow which he and his cronies wanted a piece of. Some of this was supposed to go to TIF administration, some to "infrastructure", then the kickback to the developer, etc.
Dimmick School needs to be consolidated with LaSalle and Peru anyway.
When Dimmick already has it all and is gaining even more what would entice it to be consolidated with LaSalle and Peru? The only reason Dimmick draws the taxes from the North end of Peru is account of a busing controbversy. Since we are playing the game of "Who was the Mayor When _ _ _ _ "? Baker was Mayor when the Developer offered to finance the TIF that includes his already built hotel and Baker was Mayor when the taxes of the retail section were agreed upon for the Dimmick school if Dimmick would cover busing.
right on 4:12. And so do all the other Micro Schools. Biggest waste of money in LaSalle County are the Micro Schools.
12:47, what are you smoking? The school district and the school district boarders where determined before anyone on the blog was born. It has nothing to do with an agreement with Peru about bussing. All of that property up there is not even in Peru Township - it is in Dimmick Township and has been since the 1830's. And before you flame me about the Townships not having anything to do with the school districts - I realize that. But as originally designed, each township is supposed to have a school district.
11:18 The initial phase "what are you smoking" was a complete give away to whom the authorship belonged to - Richard Head of near by Dimmick. Richard Head is no more than a amatuer con artist who would tell you Dimmick Township owns the John Hancock Building on one of his more honest days.
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