ELWOOD, Ill., Feb. 7, 2013 /PRNewswire/ -- The Village of Elwood filed a lawsuit today in Cook County Circuit Court to force CenterPoint Properties to detail how it spent the $150 million in local tax money it received after the village created a tax increment financing (TIF) district for redeveloping a 1,820-acre site located on the former Joliet Arsenal property.
Despite repeated requests from village officials to release information relating to the project, the Oak Brook-based developer has steadfastly refused to reveal how it spent the money that was allocated to construct the Deer Run Industrial Park. In addition, CenterPoint's promises of new economic development, jobs and incremental tax revenue have not materialized, the village noted in the lawsuit.
In 2000, CenterPoint requested the former village administration approve the creation of a TIF district that enabled the real estate company to secure up to $125 million in village tax breaks, which was increased to $150 million at the urging of CenterPoint in 2003. CenterPoint touted that the project would serve as "one of the nation's largest private developments."
CenterPoint insisted that the project was not economically feasible without public subsidies from the village. The TIF was created in exchange for CenterPoint's commitment to invest $840 million of its own money to develop the Deer Run project that called for industrial, retail, restaurants and hotels that would create up to 12,000 jobs and generate $20-$40 million in annual incremental tax revenue. But no hotel, retail or industrial facilities were ever built and only 3,800 jobs have been created, the lawsuit contends. The project has turned out to be mostly warehousing, with lower wage jobs. Now CenterPoint is refusing to turn over documents to the village as required by the TIF.
"CenterPoint made a lot of promises in order to secure $150 million in taxpayer dollars," said Village President William E. Offerman. "CenterPoint received public tax money and is obligated to tell us where the money went and why the promises of economic development, jobs and revenue never followed. CenterPoint has refused to produce any records or information that shows their own financial contribution to the project, what investments were made and if the public money was properly spent. We as the Village of Elwood have a fiduciary duty to our taxpayers and the public trust. At this point we need the court's assistance to get answers."
The Redevelopment Agreement between Elwood and CenterPoint clearly states that the developer must "keep and maintain, separate, complete, accurate and detailed books and records necessary to reflect and fully disclose the cost of the TIF Funded Improvements and disposition of all funds…"
The lawsuit notes that the industrial park has not come close to producing $20-$40 million in annual incremental tax revenue that CenterPoint had projected when it requested the TIF. In 2012, Deer Run generated just $7.7 million. The incremental revenue Deer Run has generated is not even enough to pay the annual interest, let alone retire the principal balance on the TIF, which is set to expire in 2023.
SOURCE The Village of Elwood