Orland Park trustees approve new school IGA, move to end Main Street TIF early
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Summary
Trustees approved a new intergovernmental agreement with two school districts, adopted a resolution to transfer Main Street TIF funds into the downtown TIF to pay outstanding debt, and voted to discontinue the Main Street tax increment financing district, returning new incremental value to all taxing bodies.
Orland Park trustees voted unanimously Tuesday to approve a new intergovernmental agreement with Orland School District 135 and Consolidated High School District 230, and to discontinue the Main Street tax increment financing (TIF) district early, officials said.
The board approved an agreement described in the meeting as the “2025 A IGA,” which the village manager said is intended to replace an earlier 2007 agreement and clear outstanding claims between the village and the two school districts. Under the plan discussed at the meeting, revenues remaining in the Main Street Triangle TIF will be transferred to the downtown Orland Park TIF to pay down outstanding debt, and the Main Street TIF will be dissolved so its increment becomes available proportionally to all taxing districts.
The village manager told trustees the Main Street Triangle TIF was created in 2004 and amended in 2007, and a 2023 legal review found the prior 2007 arrangement could not lawfully distribute TIF proceeds to only two taxing bodies without proportionate distribution to all taxing authorities. The 2025 agreement, the manager said, “is a fresh start” that eliminates the 2007 IGA and releases the districts’ prior claims against the village.
Trustees were told the dissolution is timed so the affected parcels will revert to the property tax rolls earlier than previously planned; the village manager said discontinuation is expected to be filed with county authorities after the school districts sign the IGA and that the end result will make increment revenue available to the fire district, libraries, schools and other taxing bodies rather than remaining inside the TIF.
Board members said the village hosted the required joint review board meetings last week and that the joint review board gave unanimous consent to the plan. Officials said a portion of the incremental value created by recent downtown redevelopment will be captured by the two school districts once the TIF is closed, and that some TIF revenue will be used to retire debt associated with the Main Street TIF before any remaining revenue is applied to downtown redevelopment obligations.
Trustees asked staff to file the necessary paperwork with the county by Nov. 1 if the two school districts complete their approvals. Village staff said the transfer of funds and dissolution will not take effect until the executed IGA is on file with the county.
Votes at the meeting included approval of: (1) the intergovernmental agreement among the village, District 135 and District 230; (2) a resolution providing for disposition of the Main Street special tax allocation fund (transferring funds to the Downtown Orland Park TIF to pay debt); and (3) an ordinance approving discontinuation of the Main Street TIF district. All three measures passed on roll-call votes.
Background: TIFs (tax increment financing districts) establish a baseline assessed value and capture subsequent increases (the increment) to fund redevelopment and pay related debt. Officials told trustees the Main Street Triangle baseline was low and captured most increment over time; discontinuing the district early, they said, will release increment back to all taxing authorities rather than retaining it in the TIF.
Next steps: Village staff said they will not file county paperwork to discontinue the TIF until the school districts execute the new intergovernmental agreement and that related transfers to the downtown TIF will be used to pay existing Main Street Triangle debt and support downtown redevelopment work.
