STAR bonds dead for now; newer version could be sweeter for cities

Ann Knef Nov. 6, 2009, 5:51am


When state lawmakers return to Springfield next year, they will likely take up a controversial sales tax and revenue (STAR) bonds bill that failed to gain enough support in veto session last week.

State Rep. Tom Holbrook (D-Belleville), sponsor of a bill that would support development of a 900-acre retail project in Glen Carbon, said a newer version has been drawn up and will be introduced in the next legislative session, according to a report in the Belleville News-Democrat.

Holbrook was called for comment but did not return a call by press time.

A newer version of the bill would collect all sales taxes generated by "destination" and "entertainment" users for STAR bonds, but collect no sales taxes generated from smaller "non-destination" or "non-entertainment" sites, according to proposed revisions obtained by the Record.

Various news reports identify Legoland amusement park as a potential anchor tenant, or destination site, at the proposed University Town Center (UTC) in Glen Carbon.

The STAR bonds bill that passed in the General Assembly this summer would have captured at least $15 million a year in state sales tax and channeled 100 percent to developers. Bonds would have been repaid with proceeds from the five percent tax that the state would normally have collected.

Gov. Pat Quinn did not sign the bill, which was originally introduced by Sen. James Clayborne (D-Belleville). Instead, Quinn offered an amendatory veto that would have split taxes with developers on a 50-50 basis. No action was taken on the bill in veto session.

Bruce Holland of Holland Construction is president of UTC. John Costello, son of U.S. Rep. Jerry Costello, is a principal of UTC.

According to a two page summary of proposed revisions, a newer bill could also redistribute property taxes to offset the loss of sales tax revenues attributable to the STAR bonds district for municipalities and counties within 10 miles of the district.

"Note that this plan is not expected to make surrounding communities whole, but will reduce their loss," states one of the proposed revisions.

The revised bill continues to give authority to an appointed official -- rather than an elected official -- in the project's approval process.

"Requires political subdivision (Glen Carbon) to apply to IDOR (Illinois Department of Revenue) for project approval," the proposed revision states.

As legislators convened for the second week of veto session Oct. 28-30, Troy Mayor Tom Caraker said he and a group of city leaders were in strong opposition to STAR bonds.

"It is the most unfair, irresponsible piece of legislation that has passed the General Assembly," Caraker said regarding the original bill.

"The Illinois General Assembly is going to give away $15 million a year when they can't reimburse Medicaid ...let alone not pay the schools?" Caraker said. "The State of Illinois is borrowing $1 billion to make payments on these things...then turn around and give $15 million to a private developer?"

Caraker said University Town Center would "absolutely stop any future development" in surrounding communities within 25-50 miles.

He called the developers' assertion that 10,000 jobs would be created in the project "irresponsible."

"I am a strong union supporter," he said. "But, there could never be 10,000 jobs. It would be virtually impossible."

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