2017 Annexation Strategies Action Plan by BuffaloGrove

2017 Annexation Strategies Action Plan

Village of Buffalo Grove December, 2016

2017 Annexation Strategies Action Plan

Executive Summary In 2016, staff presented the Village Board an Annexation Strategies Report. The purpose of that report was to identify and catalog the several hundred acres of unincorporated land that is dispersed in various locations within and adjacent to the Village. The Report also presented the basic methods of annexation as well as identifying fourteen annexation areas with recommended actions. A key recommendation was the development of a 2017 Action Plan. For the Boardâ&#x20AC;&#x2122;s consideration is staffâ&#x20AC;&#x2122;s 2017 Action Plan (Plan) concerning certain unincorporated properties within our planning jurisdiction. Based on the priorities established in the Report, staff has identified the following key areas of focus for 2017: 1. 2. 3. 4.

Prairie View Area (Area 1) Aptakisic Road Properties (Areas 3 and 4) Northern Milwaukee Avenue Properties (Area 7) Southern Milwaukee Avenue Properties (Area 13)

Summary of Actions for 2017 For 2017, Village staff will complete the following strategies as identified in the Plan: Area Action Meet with Vernon Township regarding planned improvements to Township owned facilities in the area. Meet with the Illinois Department of Transportation to identify future Prairie View roadway constraints onto Route 22 Develop a framework for the completion of a comprehensive plan update for the Prairie View area. Finalize annexation agreements with the Hoffman property. Aptakisic Road Continue to pursue the annexation and development of the 50-acre parcel north of the Didier Farm (Link Farm). Finalize Annexation Agreements with the Mulch Center and Pantle Properties North Milwaukee Ave. Prepare an analysis to show the limits of the floodplains/floodway and its impacts on the future redevelopment Prepare a term sheet for an annexation agreement with the Office Building Prepare a term sheet for a pre-annexation agreements with the Speedway South Milwaukee Ave. Prepare an analysis to show the limits of the floodplains/floodway and its impacts on the future redevelopment Provide a status report to the Village Board concerning the interest of annexation for all parcels in the Southern Milwaukee Corridor

Target Date Q3, 2017 Q3, 2017 Q4, 2017 Q1, 2017 Q2, 2017 Q2, 2017 Q4, 2017 Q2, 2017 Q3, 2017 Q4, 2017 Q4, 2017

December, 2016

2017 Annexation Strategies Action Plan

Implementation Tools Available This action plan begins to identify and summarize the areas in greater detail. Within each section, staff provides strategies and identifies the tools that may be needed to assist and accelerate annexation opportunities. For reference purposes, staff offers the following summary of tools identified within the various areas: 

Special Service Areas A Special Service Area (SSA) is a taxing mechanism that can be used to fund a wide range of special or additional services and/or physical improvements in a defined geographic area within a municipality. A SSA constitutes a differential taxing area within a municipality in which the improvement or service is financed through a property tax applicable only on the area receiving the benefit. This type of district allows local governments to establish such areas without incurring debt or levying a tax on the entire municipality. In short, a SSA allows local governments to tax and deliver services to limited geographic areas within their jurisdictions. A SSA could be used as an annexation incentive to existing property in the area by providing a funding source to bring the necessary infrastructure and help to increase property values and future investments. The term of a SSA can vary based on the project; however they typically have a life of about 20 years.

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Tax Increment Financing (TIF) Tax increment finance districts (TIFs) are a development tool that generates a pool of money that is used for reinvestment within the TIF area. This pool of money is created by “freezing” the assessed value of a property when a TIF district is created. The Village, county, township, school districts, and other local governments continue to collect property taxes based upon the frozen assessed value. Any increase in the property’s assessed value/property taxes generates the TIF increment, which is then available for projects within the TIF district. Staff acknowledges that creating a TIF can be challenging given the impacts to the other taxing bodies. However, utilizing TIF allows the Village to take the lead at addressing the required infrastructure needs for an area. The term of a TIF can vary based on the project; however they typically have a maximum life of 23 years. This may be extended through State Legislation to 35 years.

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Business Districts A municipality can create a business district to implement improvements to that specific area. These improvements can include a variety of development activities such as plan preparation, land assembly, infrastructure, building rehabilitation or construction, and financing costs. To fund the business district, the Village would create a business district plan that outlines a budget for the district and may then levy an additional sales tax of up to 1.0% within the district boundary to pay for improvements. Even with the added tax within a Business District, the Village would still be at a competitive sales advantage compared to our neighboring communities in Cook County.

December, 2016

2017 Annexation Strategies Action Plan

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Property Tax Abatements Property tax abatements are agreements in which a taxing district or districts abate a portion of real estate property tax on certain types of property. Property tax abatements may be used to encourage a business to establish, rehabilitate, or expand within the municipality.

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Sales Tax Rebate Agreements Sales tax rebates are incentives where the Village offers to rebate a portion of the actual sales taxes generated from the businesses back to the business or the developer for improvements on the property. It is important to ensure that safeguards are in place when considering revenue sharing agreements. These safeguards may include: minimal upfront exposure, rebates are not paid until sales revenue is generated, caps are placed on total dollars to be paid, recapture provisions are in place to assess certain penalties if a business closes or relocates elsewhere.

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Annexation Agreements Through the use of annexation agreements, the Village can develop favorable zoning terms and/or signage rights and allow for utility connections to incentivize annexation. This allows the Village to gain control of properties before development pressures create an environment whereby a developer shops for the “best deal” between communities.

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Comprehensive Planning/Code Regulations As part of the Village’s comprehensive planning process, the Village can explore future land uses and development policies that may help to offset certain costs of development and/or land assemblage costs. Staff has found that the Village’s development regulations and process are both less restrictive and less cumbersome than Lake County’s regulations.

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Payment in Lieu of Taxes (PILOT) A PILOT is a payment in lieu of taxes made to compensate a local government for some or all of the tax revenue that it loses because of the nature of the ownership (tax exempt) or use of a particular piece of real property.

December, 2016

2017 Annexation Strategies Action Plan

Prairie View Area The Prairie View Metra Station Areaâ&#x20AC;&#x2122;s fragmented land uses, smaller parcels and multiple property owners creates challenges for land assemblage and annexation. The area has limited infrastructure including limited access to sewer and water. The streets are incomplete and of a rural character. They lack basic pedestrian amenities such as sidewalks, trail connections and bike paths. While market forces will likely drive the redevelopment/annexation process for the area, the high costs to develop the required utilities and roadway infrastructure could impede future private development. Staff estimates that the costs to extend sewer and water throughout this area will be greater than $1.2 million. This does not include roadway improvements such as rebuilding existing streets, curb/gutter, stormwater and sidewalks. Rebuilding the existing street system could cost an additional $1.2-$1.5 million.

December, 2016

2017 Annexation Strategies Action Plan

2. The Village should begin the development of a parcel annexation strategy to prioritize development sites that can encourage the extension of utilities to help reduce the utility connections for existing residential parcels. 3. Explore future access points and/or constraints onto Route 22 with the Illinois Department of Transportation. 4. Develop financing strategies and mechanisms to facilitate development/redevelopment and annexation, with an emphasis on pay-as-you-go and developer financed solutions. 5. Consult Vernon Township regarding planned improvements to Township owned facilities in the area. The Village should review future plans with the Township concerning impacts to adjacent properties. 6. Work with Metra to better understand the constraints associated with expanding daily and weekend passenger rail service. 7. Conduct a market analysis to determine market capacity for unique retail users and food & drink establishments. 8. Determine alternate sites for existing businesses that may want to relocate to other locations in the nearby area.

Implementation Tools To assist with the implementation of the above mentioned strategies, staff has identified the following tools available to the Village: ď&#x201A;ˇ ď&#x201A;ˇ ď&#x201A;ˇ

Special Service Area Tax Increment Financing (TIF) Business District

2017 Actions For 2017, Village staff will complete the following strategies identified for the Prairie View area: Action Deliverable Meet with Vernon Township regarding planned improvements to Draft outline to Township owned facilities in the area. be provided to the Village Board Meet with the Illinois Department of Transportation to identify Staff analysis and future roadway constraints onto Route 22 update to the Village Board Develop a framework/outline for the completion of a Staff analysis and comprehensive plan update for the Prairie View area. The update to the proposed update will begin to explore future land use Village Board designations, densities, market analysis and tools to assist with implementation.

Target Date Q3, 2017

Q3, 2017

Q4, 2017

December, 2016

2017 Annexation Strategies Action Plan

Aptakisic Road Properties This area includes unincorporated properties located on both the north and south sides of Aptakisic Road, west of Prairie Road and the Old Farm Village Subdivision. It consists of the Didier Farm and Link Farm properties as well multiple “farmettes” on both sides of the Road. North Side Parcels The north side of Aptakisic Road is mostly made up of the Link Farm and the Didier Farm properties. It also includes five (5) single-family lots along the west side of Prairie Road. The following is a summary of a few key parcels: Link Farm A new planned residential community called “Link Crossing” is currently being proposed for the 50-acre Link Farm property, just to the north of the Didier Farm. The proposed subdivision will feature a mix of single-family home types including townhomes, row homes, and detached homes and have a density of approximately 4-4.5 units/acre. Didier Farm The Didier family owns the majority of the remaining parcels along the Aptakisic Road frontage. As of the date of this report, there are no plans for the redevelopment of the Didier Farm property and the family has indicated that they plan to operate the business for many more years. Hoffman Property Staff is actively working with the Hoffman family on a voluntary annexation of their 1-acre property on the west side of Prairie Road. The owners are seeking to connect to existing utilities along Prairie Road and construct a 2nd story addition to the property. A draft annexation agreement will be presented to the Village Board in the first quarter, 2017. South Side Parcels The south side of Aptakisic Road consists of several “farmette” properties with multiple property owners. While the Village receives interest from private developers seeking to acquire and redevelop these parcels, the existing property owners have not expressed interest in selling and/or annexation. Careful consideration should be taken when reviewing future roadways connections to ensure that access points provide the necessary connections as well as meet Lake County’s requirements. December, 2016

2017 Annexation Strategies Action Plan

Implementation Tools To assist with the implementation of the above mentioned strategies, staff has identified the following tools available to the Village:   

Annexation Agreement Municipal Utilities Favorable Zoning and Development Regulations

2017 Actions For 2017, Village staff will complete the following strategies identified for the Aptakisic Rd. area: Action The Village should finalize the annexation agreement with the Hoffman Property The Village should continue to pursue the annexation and development of the 50-acre parcel north of the Didier Farm (Link Farm).

Deliverable Final agreement to the Village Board Final agreements to the Village Board

Target Date Q1, 2017 Q2, 2017

December, 2016

2017 Annexation Strategies Action Plan

Northern Milwaukee Avenue Properties This area includes multiple properties representing 8.84 acres. The site is improved with the existing Mulch Center (landscape contractor) and a single-family residence to the north (Pantle Property). The properties contain large amounts of floodplain and floodway limiting redevelopment to mostly the frontage along Milwaukee Avenue. Staff believes the properties are very important in order to build enough critical mass for a redevelopment with the properties to the north and south, which are already incorporated. Furthermore, given the limited access points allowed by the Illinois Department of Transportation (IDOT), shared access driveways will be required. Significant roadway improvements to Milwaukee Avenue, including a new signalized intersection are planned as part of the redevelopment of the Land and Lakes property to the west. Those costs are projected to be several millions of dollars. Furthermore, substantial utility extensions are necessary to extend both sewer and water along the frontage.

December, 2016

2017 Annexation Strategies Action Plan

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The Mulch Center property may be transferred within the terms of the agreement (20 years), subject to review by the Village. A deed restriction will be recorded against the property prohibiting future transfer of “property rights” upon expiration of the annexation agreement.  The Pantle property and its right may only be transferred to the owner of the Mulch Center property or their heirs. If the property is transferred to any entity other than the current or future owners of the Mulch Center property or the Pantle’s heirs, the residential use and the rights under the annexation agreement shall cease. d. The Pantle and Mulch Center properties will be allowed the continued use of the existing septic system and well provided that both systems are in compliance with health standards. Should either system fail, the owners shall connect to the Village system. 2. Develop a Corridor Plan to address future land uses, roadway connections and floodplain/stormwater management. The Village should include the involvement of the Village of Lincolnshire on issues related to shared access and floodplain/stormwater. 3. Prepare an analysis to show the limits of the floodplain/floodway and its impacts on the future redevelopment of all properties along the northern portion of the corridor. In conjunction with the Village of Lincolnshire, the Village should explore regional floodplain solutions to enhance the development options. 4. Develop financing strategies and mechanisms to facilitate development/redevelopment and annexation, with an emphasis on pay-as-you-go and developer financed solutions. This should include parcels already annexed into the Village (Land and Lakes, Waste Management, etc).

Implementation Tools To assist with the implementation of the above mentioned strategies, staff has identified the following tools available to the Village:  Annexation Agreement  Business District  Tax Increment Financing (TIF)  Sales Tax Sharing Agreement  Favorable Zoning and Development Regulations

2017 Actions For 2017, Village staff will complete the following strategies identified for the area: Action Finalize Annexation Agreements with the Mulch Center and Pantle Property Prepare an analysis to show the limits of the floodplains/floodway and its impacts on the future redevelopment

Deliverable Final agreement to the Village Board Staff analysis and update to the Village Board

Target Date Q2, 2017 Q4, 2017

December, 2016

2017 Annexation Strategies Action Plan

Southern Milwaukee Avenue Properties This area includes only those properties with direct frontage along Milwaukee Avenue, located on both the east and west sides of Milwaukee Avenue. The west side of Milwaukee Avenue is improved with the River Run Shopping Center, Speedway and 3-story office building. The west side frontage also includes a small portion of the Lake County Public Works sanitary sewer plant. The east side of Milwaukee Avenue includes the Wheeling Sale Barn, Gerber Auto property, and a former landfill. West Side Parcels The west side of Milwaukee Avenue is improved with the River Run Shopping Center, Speedway, and 3-story office building. This area presents a revenue generating opportunity for the Village as these sites are fully developed and include sales tax generating uses. Many of the properties are already served by Lake County sewer. Water is provided by a private well that also serves the Pekara Subdivision. The following is a summary of the parcels: Office Building This property is owned by Marc Realty and is improved with a 20,000 square foot office building that is approximately 85% occupied. While it is considered a class B office building, it is unlikely that the parcel will be subject to redevelopment in the foreseeable future. The current tax bill for the property is approximately $78,000/year. In order to grow our boundaries, this property is critical to establish contiguity with the Speedway property to the south and the former landfill to the east. Speedway This property is located at the southwest corner of Pekara Drive and Milwaukee Avenue. Staff has had initial discussions with Speedway representatives who have indicated their willingness to annex into the Village once contiguity has been established. Staff estimates that the property would generate approximately $100,000/year in both sales tax and property tax to the Village. Lake County Public Works Lake County Public Works owns a portion of the property just south of the Speedway. This property is necessary to establish contiguity with the River Run Shopping center to the south. The property is part of a larger parcel owned by the County for wastewater treatment. Staff should continue to work with the County and pursue annexation of the frontage as part of its negotiations for water service to the Pekara Subdivision. River Run Shopping Center This shopping center is approximately 47,000 square feet in area. Given its current building condition and tenancy, staff estimates that the property could generate approximately $120,000/year in both property and sales tax to the Village. Staff believes the property is ripe for an investor to purchase and rehabilitate given its location in Lake County. December, 2016

2017 Annexation Strategies Action Plan

East Side Parcels The remaining parcels on the east side of Milwaukee Avenue include the Wheeling Sale Barn, Gerber Auto property, and former landfill. While only two of the three properties are developed, staff believes this area has a much greater chance of redeveloping in the near future. The following is a summary of the parcels: Landfill While the property was formerly used as a landfill, staff is unaware of specifics concerning the property’s status with the IEPA. Staff has been in discussions with developers who have expressed interest in the parcel and they have provided contact information for the owners. Discussions with developers have indicated that there may be interest by potential “big-box” users to locate on the site, pending environmental issues. Attempts to reach the owners have been unsuccessful. Wheeling Sale Barn This property is improved with a mix of uses including an antique store, historic school house and a contractor’s yard. Staff has met with the owners of the parcel multiple times to discuss annexation. The owner is very interested as he would like to sell the property for redevelopment. Similar to the Mulch Center property, this site would likely require an annexation agreement with key terms to “grandfather” less desirable uses and control future development. One of the key challenges to annexation is the establishment of contiguity to the site. Currently, the nearest municipal boundary is located at the property’s southwest corner. However, Illinois annexation law prohibits “point-to-point” contiguity as an established boundary. Annexation of the Gerber property to the south is necessary to establish contiguity. The property owner has expressed interest in a pre-annexation agreement which could force annexation once contiguity is established. Gerber Auto Repair This property is fully improved with the Gerber Auto Repair facility. Based on staff’s research, the site is still owned by the founders of Gerber, however the corporation was sold several years ago and Gerber Corporate now leases the property from the family. Over the years, staff has made several attempts to contact representatives for the family however we have not received a response. Staff believes that the business does generate some taxable sales; however we are unable to determine an approximate amount. The owner does pay approximately $55,000/year in property taxes.

December, 2016

2017 Annexation Strategies Action Plan

Annexation Strategies While future development pressures may drive the annexation and redevelopment of this area, the Village should begin to explore policies to assist and accelerate the future annexation opportunities. Staff has identified the following strategies for consideration: West Side Parcels 1. The Village should pursue an annexation agreement with the owner of the existing 3-story office building directly south of the new Potbelly’s shopping center. Some possible incentives the Village could consider include: a. Property tax abatement  Based on their current tax bill, staff estimates that the Village’s share of the taxes would be approximately $7,800/year. The Village could offer abatements of the Village’s portion of the tax bill for a finite period (5-10 years).  Although we would be giving up some revenue to grow our boundaries, this will establish contiguity with Speedway which could significantly off-set the revenue sharing with the office building. Furthermore, this property establishes contiguity with the landfill property to the east allowing for the Village to begin negotiations with that property owner. b. Signage i. The Village could offer building and ground signage rights that are not currently allowed under County regulations. c. Water i. While the property is currently provided water, it is through a private well with poor water quality. The Village’s water main is located along the property’s frontage on the east side of Milwaukee Avenue and a connection to the Village’s system would provide a cheaper water rate than Pekara. 2. The Village should pursue a pre-annexation agreement with Speedway. Key terms could include property tax abatements, sales tax sharing, signage and municipal water. 3. The Village should pursue a pre-annexation agreement with the River Run Shopping Center. Key terms could include property tax abatements, sales tax sharing, signage and water. 4. In conjunction with Lake County, the Village should explore regional floodplain solutions to enhance development opportunities. The Village’s involvement in such a project could incentivize the County to allow us to annex a portion of their site to establish contiguity to the River Run Shopping Center. 5. Develop a Corridor Plan to address future land uses and roadway connections. The plan should include the involvement of IDOT to identify future signalized intersections. 6. Prepare an analysis to show the limits of the floodplains/floodway and its impacts on the future redevelopment of all properties along the southern portion of the corridor. East Side Parcels 1. The Village should pursue an annexation agreement with the owner of the Gerber Auto Repair property. Some possible incentives the Village should consider include:

December, 2016

2017 Annexation Strategies Action Plan

3. 4.

a. Property tax abatement or sales tax sharing  Based on their current tax bill, staff estimates that the Village’s share of the taxes would be approximately $5,500/year.  In the event the property does generate taxable sales, the Village should explore sharing a portion of its sales tax generated by the use. b. Signage i. The Village could offer building and ground signage rights that are not currently allowed under County regulations. c. Water i. The Village’s water main is located directly in front of the property. The Village should pursue a pre-annexation agreement with the owner of the Wheeling Sale Barn. Key terms could include property tax abatements, signage, development rights and water. Develop a Corridor Plan to address future land uses and roadway connections. The plan should include the involvement of IDOT to identify future signalized intersections. Begin discussions with the owner of the landfill parcel. Furthermore, the Village should investigate any publically available documents concerning the environmental matters associated with the property. Prepare an analysis to show the limits of the floodplains/floodway and its impacts on the future redevelopment of all properties along the southern portion of the corridor.

Implementation Tools To assist with the implementation of the above mentioned strategies, staff has identified the following tools available to the Village:      

Annexation and Pre-Annexation Agreements Business District Tax Increment Financing (TIF) Sales Tax Sharing Agreements Property Tax Abatements Favorable Zoning and Signage Regulations

2017 Actions For 2017, Village staff will complete the following strategies identified for the area: Action Prepare a term sheet for an annexation agreement with the Office Building Prepare a term sheet for a pre-annexation agreements with Speedway Prepare an analysis to show the limits of the floodplains/floodway Provide a status report to the Village Board concerning the interest of annexation for all parcels

Deliverable Draft terms and update to the Village Board Staff analysis and update to the Village Board Draft terms and update to the Village Board Staff analysis and update to the Village Board

Target Date Q2, 2017 Q3, 2017 Q4, 2017 Q4, 2017

December, 2016