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HomeMy WebLinkAbout01/11/1994 COW agenda COMMITTEE OF THE WHOLE AGENDA Meeting Location: Meeting Date and Time: Mount Prospect Senior Center Tuesday, January 11, 1994 50 South Emerson Street 7:30 P.M. I. CALL TO ORDER - ROLL CALL Il. ACCEPTANCE OF REVISED MINUTES OF NOVEMBER 23, 1993 AND MINUTES OF DECEMBER 14, 1993 III. CITIZENS TO BE HEARD IV. MORTGAGE CREDIT CERTIFICATE PROGRAM In September of 1993, the Illinois Housing Development Authority asked Village staff if Mount Prospect would be interested in participating in its Mortgage Credit Certificate (MCC) Program. MCC provides eligible first-time home buyers with a mortgage credit on 25% of their annual paid mortgage interest. This credit can be applied to the property owners' Federal Income Tax Return. The remaining 75% would be eligible for a normal Federal Tax deduction. The tax credit is a dollar for dollar reduction of the borrower's tax liability. This Program was authorized by Congress as a method of providing housing assistance to eligible home buyers. To be approved for the Program, Mount Prospect ceded its unused Industrial Revenue Bond capacity in the amount of $2,658,400 to the Illinois Housing Development Authority. If we had not provided this bonding capacity to IHDA, the unused Bonds would have gone into a common state pool and distributed by the Governor's office. The way the Program works is that eligible applicants will apply for a private loan from an approved private lending institution. If the lender believes the applicant is eligible for the program, they will send a copy of the application and verifying information to the Illinois Housing Development Authority for their approval. If IHDA concurs with the lender, it will issue an MCC document directly to the applicant authorizing them to use 25% of their mortgage interest payment as a Federal Tax credit. Village staff plans to meet with an IHDA representative and local lenders and realtors in early January to explain the program and encourage their participation. Our intent is to have the Program up and running in February 1994. In order to activate this Program, the Village Board will need to approve the attached Mortgage Credit Certificate Program Agreement which authorizes the Illinois Housing Development Authority to administer this program for the Village of Mount Prospect. Appropriate staff, along with a representative from IHDA, will be in attendance to facilitate discussion. V. CONSIDERATION OF A BUSINESS ASSISTANCE/INCENTIVE PROGRAM AS A COMPONENT OF THE VILLAGE'S ECONOMIC DEVELOPMENT PLAN This topic was originally set for discussion at the December 14, 1993 COW meeting. The goal of an Economic Development Plan is the attraction and retention of viable businesses within the corporate boundaries of the Village of Mount Prospect. That goal can be achieved in a number of ways including, but not limited to, providing high quality municipal services, maintaining a modern and reliable infrastructure system, limiting bureaucratic roadblocks to the review and approval process, maintaining strong property values, providing attractive community amenities and limiting the overall tax burden. One component of some State and local economic development strategies is the provision of monetary or in-kind incentives and/or assistance as a method of attracting and retaining business. The strategy has been the subject of considerable debate with regard to its propriety as acceptable public policy and whether it constitutes a smart investment. Policies can be varied in their scope and coverage and may include any or all of the following items: ~ Property Tax Rebate/Reclassification ~ Sales Tax Rebate/Sharing Arrangements ~ Underwriting all or part of public improvement costs ~ Assistance for extraordinary site development costs ~ Reduction and/or waiver of developer donations, permit/tap-on fees ~ Expedited review process ~ Job training assistance In many cases, municipalities have determined that it is not in the best interest of the community to provide any type of extraordinary incentives or assistance and instead rely on the market-place and the basic attributes of the community to provide for the requisite incentive to attract and keep businesses. Up until now, the Village of Mount Prospect has had no formal policy regarding business incentives/assistance. With very few exceptions, the Village has not provided any extraordinary benefits to new or existing businesses. The Village has actively pursued the use of Tax Increment Financing as an economic development tool as a way of revitalizing the Central Business District. The Village has also granted property tax relief in the form of tax reclassification under the Cook County Tax Relief Program. Such relief was granted to Stenograph, Inc., in 1989 and the Rogers Industrial Park in 1990. In the past week, the Village received a similar request from an electronics manufacturer looking to locate in the Kensington Center. Recently, Target Department Stores have sought Zoning approval for construction of a store at the Lake Center Corporate Park at the southern end of the Village. Part of their submittal included a request for financial assistance from the Village in order to defray extraordinary development costs associated with poor soil conditions at the site. Target has requested assistance in the amount of approximately $870,000. They have suggested utilization of a State Statute that allows for the creation of a "Business District" meeting certain characteristics that would allow the Village to provide assistance. This assistance could take the form of rebating a portion of the Sales Tax generated by the retail operation. The rebate would help to write down the cost of the extraordinary site development costs. In the short term, the Village Board needs to respond to the pending requests for assistance. Concomitantly, it would be in the best interest of the Village to develop an official statement regarding the granting of incentives, if any, along with accompanying parameters and eligibility requirements. The attached package of information can serve as the basis for discussion and development of a policy statement. Appropriate staff will be in attendance to facilitate discussion. VI. MANAGER'S REPORT VII. ANY OTHER BUSINESS VIII. ADJOURNMENT