A suburban school district west of Chicago agreed to avoid a fight over the creation of a tax-increment financing district for a new $360 million casino in Aurora.
An intergovernmental agreement between Batavia Unit District 101 and the city of Aurora was approved earlier this week, with the deal coming after the school board was presented with plans for a casino-hotel project on vacant land near Farnsworth Avenue and Bilter Road, the Daily Herald reported.
Penn Entertainment aims to replace the Hollywood Casino Aurora riverboat property with a new land-based casino and hotel complex adjacent to the Chicago Premium Outlets mall, close to Interstate 88. The project is set to feature around 900 slots, 50 live table games, a Barstool Sportsbook and approximately 200 hotel rooms.
The development will also include a full-service spa, bars, restaurants, 10,000 square feet of meeting spaces and an event center. Construction is slated to begin later this year pending approval from Aurora officials.
The new TIF district seeks to restructure the existing TIF district around the casino development, which would ultimately generate revenue for the school district. However, the agreement comes with a catch: District 101 will not receive property tax revenue for at least 23 years, the expected lifespan of the TIF district.
It will instead receive 10 percent of the new TIF district’s incremental property tax as a surplus, potentially amounting to $300,000 annually. That’s in exchange for not formally opposing the creation of a TIF, which is frequently a point of contention between city governments and school districts because the mechanism temporarily locks up property tax revenue that schools rely on in order to support real estate development.
The idea is that the added value of a development project won’t be taxed at its full assessment in the years after it’s completed to attract investment, so that when the TIF agreement expires after 23 years, there’s a bigger, more valuable tax base than before the TIF was created.
Batavia’s CFO Anton Inglese told the newspaper that it has existing TIF agreements with Aurora that function similarly. The TIFs “disperse a surplus of 10 percent of whatever the increment is to the taxing bodies. And, for the same kind of agreements that they won’t contest or not support the TIF itself. What we have here is very much a replica of an IGA we already have in place.”
During the school board meeting, some residents voiced concerns that the TIF district could cost the school district $74 million in revenue. District 101 officials clarified that the 10 percent surplus arrangement was non-negotiable.
In November 2022, Penn Entertainment received $50 million in city financing to support the project, which stirred up controversy as some Aurora taxpayers opposed the idea. The city also gave Penn $8 million of land near the Chicago Premium Outlets at no cost to the developer.
— Quinn Donoghue
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