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Delavan City Council votes to revive downtown but does so carefully

DELAVAN — With anxiety and reservation, the Delavan City Council on Tuesday created a new tax incremental financing district that will encompass all of the city's historic downtown.

The vote was five to zero, with Alderman Dave Kilkenny absent.

That unanimous support didn't come without significant discussion.

In an extended debate, council members all agreed on one thing: Delavan's downtown is crucial to the heath and character of the whole city.

"The downtown is what makes Delavan, Delavan," Alderman Ryan Schroeder said. "It's not the Wal Marts out on the east side."

Tax incremental financing is a tool for governments to attract private investment. It allows municipalities to buy property, eliminate blight and make improvements and charge the cost to the district. Often, the properties are offered at a greatly reduced cost to businesses that promise to invest.

As the district's property values rise because of the new investment, the increases in property taxes are used to repay only the municipality's costs.

Spending and planning were the biggest concerns for the council.

City administrator Denise Pieroni stressed that the city would not undertake any improvements in the new district without cash in hand. The council's policy is not to do any new borrowing.

"We all want to revitalize downtown, it's just a matter of how we proceed," Alderwoman Mary O'Connor said.

O'Connor and Alderman Gary Stebnitz expressed concerns about:

-- The chicken versus the egg problem. Which comes first: downtown activities and attractions that attract people and business, or businesses and people that fill downtown and bring activities with them?

"You've got to have an attraction that's there," O'Connor said. "People say, 'Well, you've got Lake Comus,' but I live down there and I don't think that's going to be enough."

-- Relying on economic predictions, not certainties.

"I think the budget numbers are too optimistic," Stebnitz said.

He was particularly skeptical about the prediction that the long-empty downtown Delavan House Hotel would be up and running by the end of 2012.A development group currently owns the hotel.

Tuesday's meeting was the final step in a long process, and Schroeder said it was the first time he had heard so much opposition to it.

"If ever there's a time that a TID works, it's in areas like this," Schroeder said. "I'm pretty sure that no one will redo that hotel unless there's some incentives."

Schroeder said the council's "no new borrowing" policy made a significant difference.

"When I hear that we're rushing into something, I wonder how many more empty store fronts we need before we do something," Schroeder said.

Aldermen Bruce DeWitt and Jeff Johnson tried to put the issue into perspective.

Johnson said agreeing to the district didn't commit the council to spending any money.

DeWitt said he thought the council might be expressing the fear that if "we reach out our hands, no one will reach back."

In other business, the council approved an intergovernmental agreement with the village and town of Darien that will allow residents from all communities to participate in each other's recreational programs for a reduced rate.

Johnson said he was pleased with the agreement, adding, "Communities need to learn how to play nice with each other."