Representatives of the proposed Forest Lakes subdivision made their final pitch for a tax increment finance extension to the Collinsville Unit 10 School Board Monday, and walked away with the intention to permanently shelve the development.
The beleaguered subdivision began more than nine years ago, has swallowed anywhere from $30-45 million in investment, was abandoned during construction and before any residents moved in and now, after the School Board denied the TIF extension request, it appears to have taken its last breath.
(Related story: Caseyville zombie subdivision attempts rebirth)
Caseyville Holding Company LLC, owners of the 500-acre site located at Illinois Route 159 and George E. Chance Parkway to the west, and Illinois Route 157 to the east, was represented at the meeting by Allen Schmale, and Joe Koppeis.
Schmale is an executive vice president at United Community Bank of Chatham – which holds the largest interest in Caseyville Holding, and was an investor in the original project Koppeis is owner of Admiral Parkway Inc., a development company in Columbia, Ill.
Schmale told the board that the district would net $147,000 in revenues over the lifetime of the project. A loss was projected until 2024, followed by a surplus during the final 11 years of the proposed 12-year extension. Rejecting the extension would cost the district $8.8 million.
The revenue and cost projections were based on home prices starting at $250,000 with the residential TIF extension and assumed an equivalent number of homes would be built in the same subdivision and sell for $125,000 each without a TIF extension. The agreement between McBride and Son Homes – the proposed homebuilder for the development – and Caseyville Holding called for the company to have exclusive building rights in exchange for building houses in the $250,000 range, Koppeis said.
The $125,000 price tag was an assumption derived from using sales of existing homes in the area. Koppeis said there were no recent built homes in the immediate area from which to draw data or comparisons.
The proposal put before the School Board called for school district to receive about 50 percent of the real estate tax revenue from the development it would receive without a TIF extension. Without the extension, lower priced homes will be built on the property, which generate less revenue in property taxes, Koppeis said.
Koppeis acknowledged that the deal was a difficult one for the Board to consider. “This is a bad situation, it’s not good for anybody,” Koppeis said. “The banks will still lose millions, the bondholders will still lose millions.”
Board members expressed concerns that the market would not hold the projected rate of home sales, that slow sales would result in property being re-zoned multi-family – which would add to the overcrowding problem in the district’s elementary schools – and that the projected 138 new students was a low estimate.
Schmale and Koppeis said there is a small portion of the property that can be used for multi-family house, but that would be used, most likely, as housing for seniors. The projected number of new students in the 337 new homes came from research about the actual number of students per household in the region, Koppeis said.
The taxpayers in the school district should not pay for the development of the subdivision, Board member Gary Kusmierczak said. “The home buyers should pay. The extra cost should be figured into the cost of the houses,” Kusmierczak said.
Koppeis said he agreed with Kusmierczak, under normal circumstances, but previous decisions to grant the real estate TIF had put everyone in a bad situation.
School Board President Gary Peccola told Schmale and Koppeis that he had two major concerns with the proposal. “We aren’t getting enough money to educate the students and we aren’t getting enough money to house the students,” Peccola said.
Earlier discussions included a request that Caseyville Holding build a new elementary school for the district. No agreement on the topic was reached and it was not part of the final proposal.
On two separate votes, one in favor of an extension and one opposed, the Board voted 5-1 against approving the extension. Jane Soehlke was the lone vote in support. Wayne White was unable to attend the meeting.
Collinsville Unit 10 Superintendent Bob Green said he understood the position of the Caseyville Holding representatives, whom he applauded for their professionalism. However, he said, the information presented was based on assumptions that would be risky for the School Board to make. “I think the board made the right decision,” Green said.
After the meeting, Kopeis and Schmale confirmed that the project will most likely not be resuscitated. Schmale will recommend, as early as today, that the property be sold, he said.