Properties failing to sell at auction after a fire resulting from an alleged arson could give pause to any developer, and officials of a western Chicago suburb are acknowledging that, but aren’t deterred.
Leaders of taxing districts in St. Charles support the creation of a tax increment finance (TIF) district that could help limit some of the $42.6 million in anticipated costs to reposition the shuttered Pheasant Run Resort that closed as the pandemic shut businesses in March 2020, Shaw Local News Network reported.
After an auction for the 8-acre property that contains a 473-room hotel, theater and spa didn’t draw any buyers, it was damaged in a massive May 2020 fire that police have charged two teens with setting. Two others were charged with trespassing on the property in cases related to the incident, which didn’t cause any injuries.
Now, St. Charles school, parks and library districts are getting behind a plan that would cost their local government money for 23 years in order to subsidize the well-known former road trip destination’s repositioning.
Taxing bodies such as school districts frequently oppose creating new TIF districts because they siphon property tax revenues away from local government revenues. They cap the values at which properties are taxed, usually for 23 years, and put the money left on the table by local governments toward additional economic and real estate development projects to raise property values and thus increase future tax revenues realized once the TIF expires.
While the St. Charles City Council still has to approve the formation of a TIF, the support of the school, library and park systems was key to lure a potential developer to take on Pheasant Run.
While the city hasn’t yet been approached with a proposal, it’s working on creating financial instruments to offer incentives to lower a potential developer’s costs. Officials estimate it could take $16.5 million in demolition and preparation for the site as well as environmental cleanup and another $9 million in land acquisition to prepare the property for a new use.
Another $3 million in infrastructure and public facilities improvements, $1.5 million in rehabilitation costs, and $5.5 million in interest costs and $6 million in statutory school district payments would also likely figure into any project.
The majority of the costs would have to be covered by the developer, officials said, though the city would be able to chip in to limit costs through the incentives.
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