The Short Life of the Geneva Pharmacy, Another Tragedy from Tax Increment Financing: An Open Letter to the Geneva City Council

Dear Geneva City Council:

The Geneva Pharmacy at 501 East State Street is for sale for $400K. It opened less than a year ago. The for-sale ad does not suggest that the business is being sold as a going concern.

501 E State St, Geneva, IL 60134 – Retail Property for Sale – 501 E. State Street (crexi.com)

By the way, the for-sale ad lists a drive-thru on State as an amenity. Of course, you denied the Geneva Pharmacy applicant a drive-thru because one of you lives up the street. Somehow the truth is always the first of the many casualties when the City of Geneva acts. The applicant said his business plan would not work without a drive-thru. He was right.

Thanks only to inflation, TIF 2 “worked” at 501 E. state…the property tax doubled from 2002-2021 even in the face of the “Great Recession.” Last year TIF2 took $4K of the $7k total property tax while the schools got $2K. The Geneva Tax Assessor now lists the fair cash value as $247K. But the TIF only worked to fund your slush fund. The only other thing that “incremented” was the tax bill of every City of Geneva property owner and many others outside the City.

Property Tax for 501 E State Street During TIF2. The City gambled away $93.5K with a TIF gift to Geneva Pharmacy, snatching defeat from the jaws of victory. The Sage of Sandholm predicted this result: everyone loses.

So the news is not good. You might recall that I suggested that the pharmacy use was ill-advised and inconsistent with Geneva’s Comprehensive Plan. Plus another drive-thru was the last thing needed on East State Street. (How’s that Dunkin’ coming?) May-13-Public-Comment (geneva.il.us) But with the 2023 end of TIF2 fast approaching and the cash burning a hole in council members’ pockets, you greased through a TIF grant of $93.5K by amending text in the B3E zoning ordinance specifically for this one applicant (“spot zoning” in its purest form). See: Geneva OKs two TIF projects worth nearly $200,000 (dailyherald.com)

The applicant paid $265K for the property in 2021 (see tax bill) and claimed he invested $517K total in it, plus the $93.5 TIF2 gift for a total of $610,500.00. The applicant hopes to get back $400K for a 900-square-foot building.

So “but for” the TIF gift from the City of Geneva taxpayers (plus the money stolen from the taxpayers living outside the City but within other Geneva taxing bodies like school, library, and park districts), this fiasco might have been avoided. Geneva Pharmacy is yet another example of “Cummins’ Rule” which states “When the City of Geneva gets involved, it makes losers out of everyone.”

Please suspend all further activity in TIF2 and refund the remaining balance, if any, to the other taxing bodies in 2023 at its expiration. Help make Geneva affordable again.

Thank you.

Rod Nelson

ps: Let us hope that another even heavier shoe won’t drop due to this blunder. (See: Has Geneva TIFed Away Both Net Tax Revenue and the East Side CVS Pharmacy? – Rod’s Ramblings and Ruminations (genevanotes.com))

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