Development could mean boost in tax revenue for Oak Forest

A warehouse development planned in Oak Forest could be a property tax windfall for the city and other taxing bodies, including school districts, according to a redevelopment agreement.

Logistics Property Co. plans 1 million square feet of warehouse space on a 43-acre site east of Cicero Avenue near the interchange of Interstate 57 and 167th St.

Initially spread across two buildings, the project now calls for one building, according to the city.

The project is projected to significantly increase property tax revenue for Oak Forest and other taxing bodies, but it could take more than two decades for that benefit to be fully realized.

Oak Forest in February approved a tax increment financing district, the city’s eighth TIF, for the Logistics Property project. With a TIF district, incremental increases in property tax revenue can be used to pay for costs including buying land, public improvements such as sewer and water lines, and demolition of buildings on the property.

A developer such as Logistics can be reimbursed by the city for certain TIF-eligible costs over 23 years. TIF districts can be ended sooner, and they can also be extended.

Within the TIF the equalized assessed value of all properties is used to establish a baseline, with incremental increases in tax revenue, due to redevelopment, held in a separate TIF fund.

Taxing bodies, including the city and school districts, continue to receive property taxes based on that baseline amount but won’t see higher amounts until the TIF expires.

According to a redevelopment agreement the City Council approved this month, Logistics Property Co. is “unable and unwilling” to undertake the project without such incentives.

The project will cost $76 million, and the city would, through TIF funds, reimburse the developer up to $15.6 million, according to the agreement.

The figure could fluctuate if the project comes in under $76 million.

The payoff for the city and other taxing bodies comes from the increase in the equalized assessed valuation of the land, used for property tax assessments.

City officials said the site Logistics Property plans to build on has an assessed value of $1.2 million, but that is projected to increase to as much as $35 million.

Also, the developer expects that, over the life span of the TIF, incremental property tax revenue will approach $64 million.

The project would be the second such largescale warehouse project announced in the south suburbs in recent months, while a third is well underway.

The development would be across I-57 from the company’s Logi Park 57-80 in Country Club Hills, with 1.4 million square feet of warehouse space on a site where plans for an outlet mall had languished for more than a decade before being dropped.

Another warehouse project, The Cubes at Country Club Hills, is nearing completion. On the east side of I-57 and southeast of the interchange with Interstate 80, the single-building development has a bit more than 1 million square feet of space.

North of 183rd Street and a few blocks west of Cicero Avenue, much of the 70 acres had been farmland, but developer CRG also purchased a 32-acre camp that had been operated by the Girl Scouts of Greater Chicago and Northwest Indiana. This summer in Matteson ground was broken on the 760,000-square-foot Matteson 57 Commerce Center.

The $70 million project is on the east side of I-57 and just west of Cicero Avenue, about halfway between Sauk Trail and U.S. 30, both of which have access to the interstate.

Developer Crow Holdings Industrial expects the building to be ready for occupancy sometime next spring.