The suburb of Lyons is delaying its plans to issue an unusual tax break that would have benefitted a major campaign contributor to the town's mayor following an investigation by the Better Government Association that detailed the plan.
Lyons village attorneys in late June withdrew a request from Cook County that sought to grant a tax exemption for several parcels of property that a campaign contributor to Mayor Chris Getty sold to Lyons. The move would have meant school districts in neighboring suburbs, including Riverside District 96 and Riverside-Brookfield High School District 208, might have lost tens of thousands of dollars in tax revenue.
The reversal by Lyons was made because the suburb is still in the middle of negotiating a development agreement with the owner of the property, Tom Koulouris, according to Lyons' village attorney Burt Odelson.
"We want to make sure we have something firm that will create jobs and create tax increment to the benefit of the village," Odelson said.
Odelson added that Lyons still supports the general plans for the property at the southwest corner of Harlem and Ogden avenues, which include a gas station, a coffee shop and restaurants. He said Lyons may still move forward with its initial plans once a final agreement with Koulouris is reached.
"It doesn't change anything as far as the developer and the village's plans," Odelson said. "It just delays things."
Last month, the BGA detailed the unusual tax increment financing district plan as part of an investigation into cozy deals and nepotism involving Getty, who has been mayor of Lyons since 2009. Kolouris has donated $27,000 to Getty's campaign funds.
According to the initial deal, which was signed in December, Lyons agreed to buy the large commercial strip from Koulouris for $10,000 -- far less than what public records list as the market value -- and overlay a tax increment financing district on it.
Then the plan called for Lyons selling the property back to Koulouris for the same amount after the town received county approval to declare the land tax-exempt government property.
The deal had several implications.
First, by Lyons government buying the property, it would reduce its value for tax purposes to zero and, for years to come, completely eliminate its revenue-generating capacity for schools and other governments.
Last year, the properties generated $55,000 in tax revenue for those government bodies. Second, by establishing a TIF district on the land, all tax dollars would be poured back into the development property, which would then be owned by Koulouris.
TIF experts criticized the plan as "strange" and "exploiting the letter of the law."
An attorney for a school district that stands to be affected by the maneuver applauded the decision, though the relief might be short-lived.
"Having those parcels as part of the overall tax base and being assessable, being taxable, is a positive thing," said Ares Dalianis, an attorney with Riverside Elementary School District 96, one of the districts that stands to lose money in the deal. "It gives [the district] a more robust tax base."
This story was produced by the Better Government Association, a nonprofit news organization based in Chicago.