The 74-acre parcel on the southwest corner, near the intersection of routes 12 and 120, is where Lakemoor hopes the proposed Woodman’s Foods will be developed. (Photo by Gregory Harutunian/for Chronicle Media

The status of a Woodman’s foods, slated for a 74-acre parcel in Lakemoor, is in a holding pattern awaiting the resolution of a civil suit that threatens a tax-increment financing district enfolding the site.

Village officials have approached the three taxing entities involved with the suit, by attending convened public meetings, and are seeking an accord that would allow the development to proceed.

“Basically, we have no movement on this issue to report presently although we are hopeful that change will occur soon,” said Matt Dabrowski, the village’ Economic and Community Development director. “We have attended their meetings, and spoken during the public comment sections, most recently at the Wauconda Public Library session.

“There are time constraints, as Woodman’s has held the purchase of the property in abeyance, pending the outcome of this challenge to the TIF district,” he said. “We have also maintained our communications with them, and we’re working toward finding a resolution.”

At issue is a TIF district totaling 114 acres, created near the intersection by Lakemoor in February 2015, which is the subject of a civil lawsuit filed by the Wauconda Unit School District 118, the Wauconda Library District, and Wauconda Township. The three plaintiffs contend the site does not meet the “blighted and unimproved” criteria for a TIF district, as it has supported farm crops for decades.

Lakemoor president Todd Wiehofen has said the move is posturing, and fueled through obtaining a larger share of the potential tax apportionment returns while damaging the opportunity for development with protracted efforts to continue the legal challenge. He also cited the economic advantage to the area with “about 1,200 construction jobs, 220 employees at the site, and more at the outlets.”

All sides, including the Woodman’s group, have concurred that without the TIF district, the commercial development at the intersection will not take place.

The purpose of a TIF is to help improve blighted areas within a municipality. Once a TIF District is established, the base value is determined. As improvements are made to the property within the TIF, the assessed valuation increases. Any increase over the base value is deposited into a TIF account that is used for economic development. The maximum length of the TIF is 23 years.  The hope is that once the TIF expires, the improvements to the property and subsequent increase in property tax revenue will help local taxing bodies, such as schools.

The Janesville-based Woodman’s Foods, Inc. had been in negotiations to purchase 74 acres of the parcel, for their building and parking areas. A 240,000-square foot store, similar to their Pleasant Prairie location, is in the mix. Essential to the project is the site’s water and sewer infrastructure, pegged at $12 million, with the latter coming from the Northern Moraine Treatment Facility in Island Lake.

The TIF district was designed to supply a funding mechanism for the work, and additionally, it added a talking point for the village and company to equally share the infrastructure costs. Dabrowski had said the village’s $6 million allotment would be generated through the TIF money, although there is no amount in the fund currently.

Woodman’s vice president and director of real estate, Brett Backus, indicated that the TIF district is crucial to the commercial development, and more importantly, consummating the purchase of the parcel.

“This public funding mechanism is necessary to the project, and without that … it doesn’t happen … we’d like to see this resolved, clarified as weeks, not months, or years.”

The lawsuit was filed one day following the TIF’s creation, by the school district. The township and library district joined as plaintiffs June 4. A position statement, given to media and public outlets, said, “(The TIF) will wrongly divert millions of dollars in property taxes from the districts and other local governments to pay for improvements that are properly the responsibility of the Village of Lakemoor and the developers who build there.

“But tax increment financing can only be used when the area is blighted and when there would not be any development without the use of a TIF district.  The eligibility report commissioned by the Village concludes that this property qualifies for TIF status because it is subject to ‘chronic flooding.’ But the land…has been farmed continuously for decades.  And on several occasions, the Illinois Appellate Court has recognized that an ongoing farming operation is evidence.”

Dabrowski has said he was “personally dumbfounded” by the lawsuit. “We are working toward a resolution, and we’re hoping it will take shape soon,” he said. Woodman’s has three Illinois stores located in Rockford, Aurora, and Carpentersville.

Phone requests for comment from Wauconda Unit School District 118 were not returned.