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McHenry council directs staff to study TIF feasibility for Richmond Road and West Route 120, holds South Route 31 discussion
Summary
After a consultant-led overview of tax increment financing, the McHenry City Council instructed staff to pursue eligibility studies and seek proposals for TIF analyses focused on the Richmond Road and West Route 120 areas while pausing near Route 31.
The McHenry City Council on May 5 directed staff to pursue feasibility studies and request proposals to evaluate possible tax increment financing (TIF) districts focused on Richmond Road and West Route 120, and to hold off on formal TIF work for the South Route 31 corridor pending completion of the Route 31 construction.
The council heard a 50,000-foot presentation from Pete of Teska Associates, an urban planning firm that evaluates TIF eligibility. Pete explained the basic mechanics and legal standards for TIF in Illinois, saying, “It is not a new tax and it does not affect the actual assessed value of properties within the area.” He also summarized the state’s legal test for TIF: “the legal standard for TIF in Illinois is what we call the ‘but for’ test, which means but for the establishment of the TIF new development would not occur.”
The presentation reviewed three candidate areas the council earlier identified: a Richmond Road corridor north of downtown; a West Route 120/West McHenry corridor; and a southern area near Main Street and South Front Street that includes parts of the Route 31 corridor. Pete said the northern and western areas—where existing structures are more common—are likelier to meet TIF eligibility standards than the southern area, which contains larger amounts of vacant or undeveloped land.
City staff told the council the next procedural step would be to issue a request for proposals for eligibility studies. Staff noted consultant costs vary with the size and complexity of the study; the presenter said a typical baseline for an eligibility study is about $20,000, with costs rising for larger areas that require door‑to‑door parcel surveys and fieldwork.
Council members debated timing and scope. Several aldermen and staff raised concerns that beginning a TIF for the South Route 31 corridor while major road construction is underway could waste years of the TIF’s 23‑year term without generating increment. Others urged prioritizing the Richmond Road and West Route 120 areas because of existing developer interest and more immediate redevelopment potential.
After discussion the council gave staff directional consensus to move forward with eligibility work and an RFP for consultants focused on Richmond Road and the West Route 120/West McHenry corridor and to defer formal TIF action for the South Route 31 area until after construction impacts subside. Staff said any consultant‑prepared plan would return to council for review and that the cost of the study itself can be a reimbursable TIF expense if a district is later established.
Mayor Wayne Jett closed the discussion by confirming staff had the council’s direction to proceed with studies as described and to return with proposals and analyses for those prioritized areas.
