County, Others Okay Tax Abatement
by Randy Pierce
MADISON COUNTY — Madison County has joined with other taxing bodies in approving a tax abatement for the pending Dayton Freight Lines Inc. truck terminal development being located in the far west end of Collinsville.
Following the unanimous vote of the Madison County Board at its regular monthly meeting held on Wednesday, August 21, a significant portion of the property taxes that would otherwise be collected from the owners of this site is being abated as part of an incentive program designed to encourage this productive use of the applicable land.
Others whose elected officials have passed similar legislation earlier this month or sooner include the City of Collinsville, the city’s library district and Collinsville Community Unit School District 10 with the same anticipated to be occurring or having already occurred, as of this writing, as result of a vote of approval by the trustees of Collinsville Township and its road district, the Collinsville Area Recreation District and Southwestern Illinois College.
This abatement is occurring because the truck terminal is being developed within one of the county’s four enterprise zones, areas earmarked for business growth through the offering of incentives to entice business interests to locate within them.
This specific Discovery Enterprise Zone has land covering parts of the municipalities of Troy, Collinsville, Maryville, St. Jacob, Glen Carbon and Highland plus applicable nearby unincorporated areas of the county with total acreage covered being 8659.83 or a little over 13.5 square miles.
The Dayton Freight Lines facility being located on a 106-plus acre site development in Collinsville’s Horseshoe Lake Road Corridor is the road carrier’s second trucking terminal in its St. Louis market footprint.
Located along McDonough Lake Road, the industrial property development broke ground this spring for the first phase of development consisting of a 151+/- door truck terminal with an attached office building, warm storage area, employee break room and an after-hours office and drivers’ room. Also included is a four-bay fleet maintenance facility, a drive-through interior truck wash, dual interior fueling bays as well as office and parts space for the facility.
The Illinois enterprise zone program, which was set up by the state legislature to help spur economic development, includes incentives like sales tax exemptions for building materials and manufacturing machinery purchased and used in the developments covered by its provisions plus investment tax credits, utility tax exemptions, deferred property tax collection and job creation tax credits.
These types of financial breaks are intended to cause prospective developers to be more attracted to building in the enterprise zone areas by reducing their costs.
Along with the creation of jobs, the long-range benefits of the enterprise zone program include increased real estate tax revenue for the government units involved after a qualifying depressed or unused property is developed for a purpose yielding a higher assessed valuation.
Taxing units, such as school or fire districts, for example, affected by this program realize a greater amount of revenue in the long run from those tracts of real estate and structures located in enterprise zones because they produce much less income when existing in an undeveloped condition than when the assessed valuation goes up from the improvements made to the property.
It follows then that if such real estate tax income increases are funneled into the local taxing bodies, the impact on other property owners would be positive in terms of the amount of taxes they pay by the increased sharing of that burden.
When the abatement proposal was presented to the county board’s grants committee, chaired by Denise Weihardt of Granite City, earlier this month, one of its members, Stacey Pace of Troy, sought clarification of the location of the project and was told it is just off Horseshoe Lake Road.
The amount of property tax to be abated by the county will be connected only to the increased assessed valuation coming about as a result of the development of this project such as the new construction which is taking place at the site.
Those additional taxes, after the property value is assessed at a higher rate, are to be not collected by the county for the first seven years once the project is completed then incremental terms of the agreement with Dayton Freight kick in calling for 70 per cent to be abated in the seventh year, 40 per cent during the eighth year and 10 per cent the ninth. Starting with the 10th year, the full amount of taxes based on the property’s assessed valuation will be collected not only by the county but, as with all of these provisions, the other taxing bodies also.
All of this transpires in conjunction with provisions set down by the Illinois Department of Commerce and Economic Opportunity through state legislation that had been approved several years ago.
