Kaneland School District considers legal action against Sugar Grove over development project's TIF district
Kaneland School District 302 may pursue legal action against the village of Sugar Grove to challenge the tax increment financing district planned for the controversial Crown Community Development project at Interstate 88 and Route 47.
In the latest backlash to Crown Community Development's 760-acre mixed-use project called The Grove, Kaneland is opposing the development on the grounds that it is being built in a tax increment financing, or TIF, district will limit property tax revenue to the school district.
In a TIF district, property taxes from the new development do not go to taxing bodies as they typically do. Rather, the extra or 'increment' taxes created by the development of the property go into a special fund used to pay for costs related to improving the area. It's meant to serve as an economic development incentive.
According to an original proposal, 10% of the TIF funds were to go to the village for any improvements it needs to make in the area, but in August, Sugar Grove Village President Jennifer Konen said that Crown had agreed to give another 10% of the funds to be distributed among the other taxing bodies, which could amount to $37 million over the TIF district's 23-year lifespan, according to past reporting. Kaneland is expected to get $26 million of those funds. The original agreement also included payments from TIF district funds to offset the cost of schooling for students living in TIF-supported housing.
Kaneland began negotiations with Sugar Grove, the entity that would be disbursing the TIF funds, to create an intergovernmental agreement about the TIF district, according to documents from the school board's Jan. 13 meeting. A final draft of the agreement was presented to the school board in January. It included the stipulation about an additional 10% of TIF funds being allocated to taxing bodies, among other provisions.
Now, not satisfied with the terms of the proposed intergovernmental agreement, the school district is considering a new approach: taking legal action against Sugar Grove over the TIF district.
'We're looking at the … both short-term and long-term health of our district,' Kaneland Superintendent Kurt Rohlwing told The Beacon-News on Thursday. 'The health of our district dictates the experience and the education we're able to provide the students of Kaneland. And so, we don't believe that what is proposed is in the best interest' of the school district.
Rohlwing characterized the proposed intergovernmental agreement as the village's 'last best offer,' and said legal action was the next possible avenue.
On Monday, Kaneland's school board authorized its legal counsel, boutique K-12 education law firm Kriha Boucek, to draft a complaint. While any official legal action must be first approved by the school board, Rohlwing said, this move is the district's latest attempt to fight the TIF district.
The Grove is a proposed 760-acre mixed-use development, commonly referred to as the Crown development in reference to its developer, the Naperville-based Crown Community Development, according to past reporting. The developer, through a subsidiary, owns the site of the planned development and 23-year TIF district, located at the intersection of Interstate 88 and Route 47.
Plans for the development include nearly 400 acres of residential properties, over 120 acres of commercial development and about 240 acres for a business park, according to past reporting. According to its website, the project could hold as many as 1,500 residential units.
As public discussions over the project took place over months and the proposal drew substantial community criticism, a Joint Review Board formed by the village of Sugar Grove reviewed the proposed TIF district and its financial impact on the area in May. It ultimately made no recommendation to the Sugar Grove Village Board.
According to a document from the Kaneland superintendent presented to the school board with a timeline of the district's position on the development's TIF impact, the district's legal representation recommended that the district abstain from voting for or against the TIF district at the Joint Review Board meeting, so as to 'allow ease in working with the village of Sugar Grove and allow for more concessions to be given.' Kaneland abstained in the May vote.
Despite months of public opposition, however, the Sugar Grove Village Board voted in September to allow the Crown project to move forward.
Residents opposing the project have said previously that the development will burden the taxing bodies such as school districts that will have to provide services to the residents and businesses the project draws in without receiving the additional tax revenue the development would ordinarily bring in due to the TIF district, according to past reporting.
'The interest of the (Kaneland) district is intertwined with the interests of our homeowners,' Rohlwing said on Thursday. 'The additional revenue not only … would allow us to provide better facilities, better educational opportunities and experiences for our students, it also would provide us a possible way to alleviate the tax rate on individual homeowners,' saying that, were the development not in a TIF district, commercial and retail properties from the project would provide a greater share of tax money to taxing bodies.
Crown Community Development's Jennifer Cowan previously said their goal was to begin work on the site in fall 2025, completing engineering on the first part of the project and obtaining the necessary permits before then. The first lots for the development are expected to be sold and builders are set to start constructing houses sometime in 2026, according to past reporting.
The public relations firm representing Crown Community Development did not respond to The Beacon-News' request for comment on Friday.
But, even after the Sugar Grove Village Board's approval of the development in September, public opposition has continued. A non-binding referendum on the April 1 ballot will provide residents another opportunity to express their support or opposition to the project.
And Kaneland, for its part, is one entity making a final effort to oppose the current TIF plan, and the terms of the intergovernmental agreement with Sugar Grove.
'If they want this incentive, then they need to, the way I see it, they need to invest money back into the community,' Kaneland board president Addam Gonzales said at Monday's meeting. 'And we are nowhere near what my expectations would be for that.'
Should the school board approve the legal complaint, which would need to identify the defects in the TIF district, the complaint would then be filed in Kane County Circuit Court, an attorney from Kriha Boucek told the board on Monday. But it could take years to make its way through the courts.
Despite the possibility of a legal battle, Sugar Grove, however, does not seem to be going back on its plan for the development or the TIF district.
'While I respect the Kaneland school board's decision and understand their concerns, I stand by the Village Board's approval of the project,' Sugar Grove Village President Jennifer Konen said in a statement to The Beacon-News on Thursday. 'This project creates opportunities for families, children and local businesses while strengthening our tax base and ensuring long-term, sustainable growth that benefits homeowners and the entire community.'
But Kaneland doesn't appear to be backing down, either. The school board noted Monday that, since the district is one of the largest taxing bodies affected by the TIF district, they need to be the entity to take the lead in opposing it.
'Who else can fight the village, right?,' school board member Aaron Lawler said. 'I mean, the fire district probably can't, the library district probably can't, the park district probably can't. So it falls on our shoulders.'
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