The holiday season is about giving, some people say, an expression that is easier said than done; not everyone is thrilled about reciprocating, especially if the gift they receive is not exactly what they want.
Likewise, Central School District 104 agrees with the City of O’Fallon, Ill., that a new hospital is a great gift, but the establishment of a $22.5 million TIF district is asking for too much in return.
The end result: a lawsuit filed in late November by the school district against the City of O’Fallon challenging the legality of the Green Mount Medical Campus TIF district.
“The board agrees with the goals of the TIF,” said Central School Board Superintendent Patrick Anderson in a prepared statement. “However, after the board’s investigation into the context of and details of the TIF, the board concluded that the TIF plan is not a good deal for job growth, for the tax payers of O’Fallon, or especially for the taxpayers of Central School district 104.”
The episode materialized when the Hospital Sisters Health System (HSHS), a not-for-profit organization that runs St. Elizabeth’s Hospital in Belleville, Ill., purchased 106 acres of land between Green Mount Road and I-64 for $18 million on Nov. 22, according to the Belleville News Democrat.
HSHS, which plans to build a $300 million, 144-bed medical center on the land, a development pending approval by the Illinois Health Facilities and Review Board, agreed to the project on the condition that the city would create a TIF district to cover $10 million remediation work on St. Ellen’s Mine, a hazard that lies just underneath the site.
The school district responded with a lawsuit against the city on the same day claiming the TIF, unanimously approved the day before by O’Fallon aldermen, did not pass the “but-for” test needed to prove an area is blighted and unable to be developed or renovated without tax increment financing.
According to Central School District Attorney Kurt Schroeder, the cost to remediate the mine should be covered by its owner, Peabody Coal company, not the school district and other taxing bodies.
“Of the $22 million of property taxes the City of O’Fallon would collect, Central School District 104 would normally get almost $9.5 million,” Anderson said. “With the TIF District in place, the district would receive nothing.”
However, Central’s assertion that the TIF is illegitimate is not left unchallenged by the city.
“Look at the law; the Illinois Supreme Court has ruled on it,” said Director of Finance and Administration Dean Rich, citing a case that ruled in favor of the establishment of a TIF district to redevelop an undermined area in Belleville. “The hospital said they love the land, they love the intersection, as well as the community, but they can’t build on a mine that is going to melt.
“They (HSHS) built St. Elizabeth’s in Belleville on account of the railroads, but today, we have the interstate,” Rich said. “The hospital will be an anchor to the O’Fallon community.”
The school district is currently expecting a response from the city’s attorneys.