Emma’s Landing: More City of Geneva Wrong Answers that Provide More Indications of Fraud

On March 21, 2022, the City of Geneva released some closed session minutes. These minutes recently obtained via a FOIA request raise disturbing questions. This essay compares and contrasts prior City of Geneva declarations with what was said in secret. Two annotated documents and a meeting video are posted here as references.

The Illinois Open Meetings Act begins with the premise that all public business should be transacted in the open for public scrutiny. For understandable and good reasons some discussions should be confidential, but closed meetings are never required. One absolute requirement is that any action must be taken by a formal vote in an open session. The Act requires that the exceptions be construed strictly and narrowly: “The Provisions for exceptions to the open meeting requirement shall be strictly construed against closed meetings.” 5 ILCS 120/  Open Meetings Act. (ilga.gov)

Two OMA exceptions focus on public body property transactions: “5) The purchase or lease of real property for the use of the public body, including meetings held for the purpose of discussing whether a particular parcel should be acquired.” and, “6) The setting of a price for sale or lease of property owned by the public body.” Clearly, exception 5 has no relevance to the sale of the Emma’s Landing City-owned parcel. The motion made to enter a closed session on August 26, 2019, was recorded in the minutes as this: “Closed Session on the Setting of a Price for Sale or Lease of Property Owned by the Public Body.” This was a good start, but it was a Trojan Horse.

The ultimate irony in all this is that when the Ordinance creating the Planned Unit Developed Special Use that is Emma’s Landing was formally passed by the Geneva City Council and duly recorded with the Kane County Recorder, the City listed Joy Nelson as the owner of the parcel, not the City. This is inexplicably bizarre and still stands, rendering the whole process suspect. The solution to the riddle involves a procedural grease gun (vide infra).

The City of Geneva does not take the Open Meetings Act seriously. A motion to enter closed session should cite the exact chapter and verse of the Act’s exemption being invoked. Two issues should be considered: does the exemption cited meet the “strictly construed against” test. If it does, is secrecy needed or desirable? Secrecy is never required by the Act. An example from the set of closed session minutes here presented is the discussion about the old library building. Exemption 5 clearly is applicable. But the old library building is owned by another public body. An open deliberation would have better served the public’s interest. The old building remains as a sunk public asset and is a public liability.

Below are two questions the City posed to itself in July 2020 in a document titled “Just the Facts: Lewis Road Property Donation for Affordable Housing, Updated July 10, 2020.”

When did the City declare the Lewis Road parcel [Emma’s Landing] surplus and decide to make the property available for affordable housing?
On Nov. 18, 2019, the City passed Resolution 2019-97 reconfirming the determination from 2013 and authorized the City Administrator to advertise and negotiate any proposals for the purchase of the property, including monetary and in-kind considerations, subject to acceptance of any
contract proposal by the City Council. The Resolution further stated that “Contract proposals that proffer an ‘affordable housing’ project are encouraged and will be evaluated as a City preference.” A Notice of Sale was published and posted on the City’s website requesting proposals for the property by Dec. 4, 2019. “

False. On August 26, 2019, The Geneva City Council held a closed session during which, from the minutes, “The Mayor indicated the consensus tonight is whether the council is willing to consider selling the land, selling the land at a reduced value, or using the land as an investment to encourage development. [City Administrator] Dawkins indicated that it appeared there were no objections from the council regarding any of the options and staff could begin conversations with the Burton Foundation.” The Mayor and City administrator inferred that two City Council actions (one was the “willing to sell,” the other the “to the Burton Foundation”) occurred during the secret meeting. Neither conclusion can be construed as “setting a price for sale or lease.”

How many proposals did the City receive for the Lewis Road property?
In 2019, the Burton Foundation was the only proposal received for the property.”

False. During the same secret meeting of August 26, 2019, referenced above is this: “[Economic Development Director] DeGroot stated that the City has been approached by two developers regarding affordable housing sites; namely the Lewis Road site. Burton Foundation offered a letter of intent to build 49, 2-story townhome units with an initial offer of $700,000 for the City’s property. An additional letter of interest from MVAH Partners out of Ohio was also received, for the same property but with I-story units and a more diverse mix of income levels. Discussion centered on what type of development would be more attainable.” The concept of selling a public real property asset does not meet the “strictly construed against” requirement of the “sell or lease price” exemption 6.

Finally, during the June 7, 2021, City Council Meeting, the extension of the Burton Foundation contract arose. Mayor Burns said this per the minutes: “Burns clarified that, to correct the record, that the city administrator did not grant the extension without consultation with the city council as Nelson had alleged.” Here is the video – begin at about the 50 min mark to get the flavor.

This is what actually happened on the contract extension issue according to the Closed Session Minutes of January 19, 2021 (see document 1 above):

“The meeting’s goal was to determine if there were objections from the Council to granting this extension before Administrator Dawkins granted it, which she had authority to do… Mayor Burns noted that the meeting’s goal was to determine if there were objections that constituted a majority to extending the contract. Ald. Marks objected, several other Ald. stated they did not object, and no other objections were noted. Ald. Kaven asked what specific reason was given for the delay. Burns and Dawkins related that a 180-day limit is standard in such contracts and that the city has extended it in other contracts when the need arose. Burns added that a variety of issues had arisen, most notably the Covid pandemic which has impacted most aspects of doing business.”

Thus, almost a year after “Nelson” raised concern over the Burton contract extension, “Nelson” learns that Dawkins (allegedly) “had the authority to do so” and did it, then asked for permission illegally during a secret session called under a motion citing a non-existent OMA exemption: “CLOSED SESSION REGARDING THE SALE OF REAL ESTATE PROPERTY, Moved by Ald. Bruno seconded by Ald. Marks to adjourn to closed session.” ONLY THE SALE PRICE CAN BE LEGALLY DISCUSSED IN SECRET. Only official action by the City Council taken in open session can materially alter a governmental contract. “Consultation” ratification by a “majority” not objecting is not an action defined in state statute or municipal code. Geneva’s City Hall has been infested with January insurrectionists.

A “consultation” cannot abrogate Illinois law. A city administrator does not rule with the advice and consent of the City Council. In fact, a city administrator serves at the pleasure of the city council. Unauthorized alteration of a City of Geneva contract has Rita Crundwell vibes, even if it was done the “Geneva Way” with a wink and a nod from the mayor.

The mayor’s reference to Covid is shamefully reminiscent of Rahm Emanuel’s “You never let a serious crisis go to waste. And what I mean by that it’s an opportunity to do things you think you could not do before.” In his perpetual emergency proclamations, the Governor advised postponing non-urgent actions until normal face-to-face open meetings could resume.

Geneva had an offer on the table of $700,000 for the land and 49 units. MVAH Partners, a much larger LIHTC housing developer with many more than one employee, never came to Genevan’s attention until now. The City Council finessed the $700,000 down to $586,000 and sweetened the deal with fee and permit kickbacks and a grease gun in the form of an all-Burns-appointees puppet plan commission. Obviously, Burton also got an early secret guarantee that the “process was greased” since speed was of the essence to meet the Illinois Housing Development Authorities’ required deadlines for awarding millions in Low Income Housing Tax Credit grants. Hence the series of ambushes over the land donation issue and the myriad of procedural violations and improper secret decisions not allowed under the Open Meetings Act.

For the record, the Geneva City Council, in the process of breaking the community’s trust, gave away for nothing its most valuable asset, its credibility.

Pop-up PUDs and the Geneva Way: The Cornerstone Moment

“The owner of the property for which a planned unit development is sought may initiate a request for a special use planned unit development. (Ord. 95-28, 5-1-1995)”

The above quote is from the Geneva Municipal Code. The provision describes how a Planned Unit Development Special Use is to be lawfully considered in Geneva. In less than 60 days between early March and early May of 2022, a 250-unit LIHTC affordable housing project was floated and withdrawn by an out-of-state developer identified as “Cornerstone” for the SW corner of State Street and Kirk Road.

The process was initiated in violation of the plain language of the Geneva Municipal Code. The would-be developer was not “the owner of the property.” Several reasons make this trip-over-the-starting-line comedic pratfall less than hilarious.

First, if rules matter then those who intend to obey them and those who must enforce them should agree on their meanings. Statutes and Codes provide specific meanings for words that their framers judged to be so important that ambiguity should be removed. An example is that the Geneva Code defines “shall” as “must.” For non-defined words, a standard Mirriam Webster dictionary is cited.

The “Geneva Way” of applying words and rules is a wink and a nod.

“Common law” (also known as “case law”) is established by courts of law when a dispute cannot be resolved by reaching a mutual agreement on both the law and the facts. Few ordinary citizens can afford the keys to the courthouse if they believe their rights have been violated by the City of Geneva. 

Zoning and land use disputes have given rise to the colloquialism: “In Geneva, you have all the rights you can afford.” This is because the Geneva City Council treats stop signs as suggestions while  Illinois law 625 ILCS 5/11-1204(b), “requires drivers to obey all stop signs. Drivers must stop at any intersection with a stop sign before entering the crosswalk or, if there is no crosswalk, at a clearly marked stop line.” 

In fact, Geneva Mayor Burns was formerly so zealous in his passion for code-related public welfare that he was a vocal supporter of red-light cameras in Geneva. Or at least he was until the political backlash changed his reasoning. The problem for Geneva property owners now is that the mayor-for-life believes that when the Municipal Code reads “shall” it really means “maybe,” and entire provisions may be totally ignored when they are inconvenient. The mayor orders his appointed and employed underlings to adopt his definitions and unscrupulous tactics.

So, a Genevan whose property rights are ignored by the Geneva City Council when it misapplies its own code has few affordable options. Trust in the process evaporates, ratifying the ever more widely held proposition that rules are only made to be broken. 

Second, the Cornerstone application demonstrates a reason the Geneva Municipal Code requires the owner of the property in question to initiate a Planned Unit Development Special Use. The applicant must have “skin in the game” so that the taxpayers are not on the hook to pay for the staff time and expense when a tire-kicker comes to town. The Batavia experience with its One Washington Place project should be a learning experience. Batavia incurred hundreds of thousands of dollars in expenses over many years only to have the developer walk away literally the day before construction was to begin.

Third, if the provision that only allows the property owner the privilege of initiating a Planned Unit Development Special Use is ignored (as it was in the case of Cornerstone) the process will just end with an Approved Planned Unit Development Special Use like Emma’s Landing. Emma’s developer “initiated” the privileged process, and the “official” “owner” never owned the property. The Emma’s Landing fraud, where the City was the real owner and partner in the crime, also literally began with the first step.

Who would trust this puppet Geneva City Council?

 

Liberty Dies in Darkness and the City of Geneva Loves Its Dimmer Switch

Questions about Emma’s Landing, Dunkin’ Donuts, abuse of TIF Funds, Open Meeting Act Violations, ignoring Robert’s Rules, treating the Municipal Code as a list of suggestions, and many more actions of doubtful probity lurk in the shadowy back-rooms of Geneva City Hall. Fraud is too feeble a word to describe the clandestine fabrication of a fake deed land-plat to hustle through the Emma’s Landing swindle. The word fraud inadequately describes the “overlooking” by the City of the required Dunkin’ IDOT Route 38 permit. What about the $31,000 “refund” of electric hook-up fees made to the Dunkin’ developer who does not pay the property tax (in blatant violation of its contract with the City.) What about the corn-maze Special Use for Malone’s Funeral Home where illegal paved street parking encroaches on the public ROW to the sidewalk, handicapped parking encroaches, and code-mandated 2-way parking access is one-way? Much of this was fraudulently described by City Staff and accepted by the Plan Commission and City Council as “pre-existing non-conforming.” Code enforcement for public safety is a distant secondary priority when the political agenda is primary.

https://kaneil.devnetwedge.com/parcel/view/1202355001/2021#Exemptions3

Above is a link to the 2021 Dunkin’ property tax bill. Note the “parcel taxes sold” red flag. Also, note that in spite of three years of tax-payer TIF investment “improvements” Dunkin’s taxes are falling. Mine aren’t. Dunkin’ paid $710,000 for the property before the “improvements.” $710,000 is about double the value of my home. The assessor has the Dunkin’ valued at $390,000, about 55% of the purchase price of the parcel in its “TIF” blighted state.

Dunkin’ is in violation of its contract with Geneva taxpayers. The City Council has a fiducial duty to move to void the contract and recover the taxpayer’s expenses in doing so.

Now the City wants to limit my access to information. They claim I am a burden. Yes, transparency can be annoying. They sent me 400 pages of redundant documents that include less than 40 unique pages, then claimed it cost the City hundreds of dollars and published their pull-a-rabbit-out-of-the-hat cost numbers to intimidate me.

“The condition upon which God hath given liberty to man is eternal vigilance; which condition if he break, servitude is at once the consequence of his crime and the punishment of his guilt.”

Here is my appeal letter to the Illinois Attorney General.

From: Rodney B. Nelson, M.D., F.A.C.P.

May 14, 2022

To: Public Access Counselor Office of the Attorney General

500 South 2nd Street

Springfield, IL 62706

Fax: 217-782-1396

E-mail: publicaccess@atg.state.il.us

RE: Appeal of Recurrent Requester Determination

Dear P.A.C. Counselor:

The City of Geneva has designated me as a “Recurrent Requester.” To that charge, I plead nolo contendere.

The value of many items of information decays exponentially. Actions of local governments often take place within a two-to-three-week period from first appearing on the agenda to final action. This makes standard F.O.I.A. procedures of limited usefulness. The City of Geneva has declined to respond to my informal questions, choosing instead to “ghost” me. Extending the response time to three weeks would render many of my inquiries moot.

Attached is a copy of my F.O.I.A. request that triggered the City’s determination (without due process) of my restricted F.O.I.A. status. Also attached is the City’s response. The issue involved is a successful applicant to the City for public subsidies (T.I.F. and sales tax rebates, etc.) to support a new “Dunkin'” store. The City also granted a special use to the applicant. The store is about 300 feet from my home.

I noted that the approved special use plan included (among many other code violations) encroachments into the public R.O.W. of a city street (Crissey Avenue) and an Illinois state highway (Illinois Route 38). Over a year ago, under F.O.I.A., I requested a copy from I.D.O.T. of the required State of Illinois R.O.W. permit. The Dunkin’ store’s construction was essentially complete, but an I.D.O.T. Permit was required even before the construction started. I.D.O.T. informed me that it had not received an application for a permit.

I.D.O.T., under F.O.I.A. or by phone, has declined to respond to my queries about the status of the permit. In the interim, the applicant has asked for an occupancy permit. My F.O.I.A. request that triggered this appeal is “recurrent,” as indicated in the request. The problem for me is that the letter from the City to the Dunkin’ applicant with a specific list of requirements before an occupancy permit will be considered does not include a due date. So, I cannot get timely information from either I.D.O.T. or the City of Geneva without recurrent F.O.I.A. requests.

The above is background information.

My appeal to P.A.C. is based on the fact that I am the owner, proprietor, editor, and writer of a Geneva-centered news media and non-profit, scientific, and academic entity known as “genevanotes.com.”

Among the purposes of genevanotes.com is to (i) to access and disseminate information concerning news and current or passing events, (ii) for articles of opinion or features of interest to the public, and (iii) for the purpose of academic historical, scientific, or public research or education. 

As such, the following Illinois Statutory provision applies: “For purposes of this definition [recurrent requester] requests made by news media and non-profit, scientific, or academic organizations shall not be considered in calculating the number of requests made in the time periods in this definition when the principal purpose of the requests is (i) to access and disseminate information concerning news and current or passing events, (ii) for articles of opinion or features of interest to the public, or (iii) for the purpose of academic, scientific, or public research or education.

I believe reading a sample of the content on my media outlet over the years will demonstrate an honest attempt to provide the information described in the above statute.

Rod’s Ramblings and Ruminations – Lore & Legend of Geneva, Fox Valley, Illinois & Beyond (genevanotes.com)

Thank you for considering my appeal.

Sincerely,

Rodney B, Nelson, M.D., F.A.C.P., Former Major, USAF

Fact Check at Property Tax Time on 12-08-225-002 Emma’s Landing LIHTC

Most Geneva real estate property owners received their property tax bills within the last week. 

Here is what Genevans were told about property tax on Emma’s Landing – presented in a “Just the Facts” publication on July 10, 2020, by the Geneva City Council as an incontrovertible “fact.”

“Do affordable housing developments pay real estate taxes? If so, are affordable housing developments assessed at the same rate as market-rate developments?”

Affordable and market-rate developments are taxed at the same rate as determined by the Geneva Township Assessor.”

True or False?

Correct Answer: FALSE.

Parcel 12-08-225-002 is the Emma’s Landing Low Income Housing Tax Credit project on Lewis Road in Geneva. 

This morning at 5:03 am a Geneva Tax Assessor search-by-parcel returned this: There is no record for parcel 12-08-225-002. This morning at 5:04 am a Geneva Tax Assessor search-by-name “Burton Foundation” returned this: Internal Server Error.

However, a search of the property tax map yields a 2021 tax bill for Burton Foundation for parcel 12-08-225-002. The link is here: Parcel Details for 1208225002 (devnetwedge.com)

The owner is listed as “Burton Foundation” and the legal description is listed as “EMMAS LANDING PUD LT 14.” The details are:

Property Class8000 – ExemptTax CodeGE005 –Tax StatusExempt
Net Taxable Value0Tax Rate0.000000Pay TaxesPrint Tax BillTotal Tax$0.00

Here is the “Sales History:”

2021 2021K067794 Special Warranty Deed 7/2/2021 CITY OF GENEVA THE BURTON FOUNDATION $576,000.00

The Mayor signed the warranty deed authorized by the City Council by passing Ordinance 2021-03 in March 2021. That Ordinance contains a fraudulent Final Plat of Planned Unit Development. The officially recorded Plat of Survey was not signed by the owner of the property as required. The owner was the City of Geneva in March 2021. The person who certified that she was the owner was not then, nor ever, the owner.

Special Warranty Deed 2021K067794 is invalid as it is based upon a fraudulent document.

Eventually, a non-zero-dollar property tax bill will be created for Emma’s Landing, but the City Council’s “TAX FACT” will still be false, because the Council’s assertion that “Affordable and market-rate developments are taxed at the same rate as determined by the Geneva Township Assessor” is false.

LIHTC affordable housing is taxed under a totally different statute and procedure than “market rate” homes like yours and mine. Call your alderperson and ask for a detailed explanation of how this mess came about (and who benefitted?) and what is planned to correct the fraudulent basis of Emma’s LIHTC affordable housing project.

Back to When the River Made Pearls, not Stenches

To: The Geneva City Council,

Soon, maybe not tomorrow, the Geneva dam on the Fox River will be removed. The long-term health of the river and human safety concerns demand removal. The water skiers will be gone but the kayaks and canoes will abound. If the money can be found, the removal might be done in an orderly planned way. Or the fickle river itself may remove the dam just as the river removed Geneva’s wooden bridge in 1857, and dams before that.

In the above file, you will see two map images that both show the river now and in 1872 but with different transparencies of the overlay. Both maps were created after the Galena & Chicago Railroad assault of 1854 that cut the river in half. Through the link in the file, you can see what 150 years have wrought. If you are really interested, the 1841 surveyors’ map shows that the east channel was wider than the west and the island was a much longer narrower snake that extended only a bit further north but a lot south of its current state. The City of Geneva water treatment plant is on the tail of that snake. Geneva is dotted with old dump sites from Wheeler Park in the north to the man-made bayou south of the tracks that had been the east channel. Mercury-rich coal fly ash is a major component of landfills all over the old town. Then we created a police practice range so that lead can contribute to human misery and wildlife extinction.

You are about to “de-landmark” The Mill Race Inn site, one of the last remaining open parcels of land on downtown Geneva’s riverbank. Your arbitrary historical “period of interest” of 1846-1946 is absurdly legalistic. Usually, rules mean nothing to you except on those occasions when you use them to justify your short-sighted poor decisions. Do not make this one of those occasions.

A public park is obviously the best choice for this 1.4-acre parcel on the river ford of an ancient buffalo trace. The Viking ship and Bristol Farmhouse are obvious candidates to join the industrial shop of Alexander and Rystrom to commemorate one fleeting century of one species’ history. The new park should also celebrate Geneva’s natural history, which is centered on the Fox River.

But until the clammers can again find pearls in the river, our debt to the river will remain due but unpaid.

Sincerely,

Rod Nelson

Of Charettes and Charades: The Costs of a Failed Geneva City Government – an Open Letter to the Geneva City Council on the Mill Race Inn TIF Site

Dear Geneva City Council,

Below please see pages 10 and 11 of the attached document. On these pages, you will note that the value of the contract for the peurile planning Charrette for the Mill Race Inn Site increased by $4750 without explanation. A pittance of other people’s money to an alderman but the sum is more than a retired couple’s monthly social security check. By 08312019 the entire “opportunity analysis phase” cost of the Mill Race Inn planning Charrette (French for chariot, but nearly rhymes with charade) was paid per the contract amount. BUT the total contract amount then changed from $268650 to $273400. HOW? Who authorized it? Etc. The ~$300,000+ total was to be split with the developer, but that never happened. The taxpayers paid the full amount.

I found this $4750 discrepancy by spending 10 minutes looking over the 17-page document. That document was the result of a FOIA request to the City of Geneva that was denied initially because the request was deemed “overly burdensome.” I agreed with the city staff that the request, as they explained, was burdensome. But then so are my property taxes. I submitted a revised request that was based on the staff description that resulted in obtaining the above 17-page document.

Now, if any one of you is reading this, you have already concluded that I am nothing more than an annoying nitpicker. The devil is always in the details except when the most basic tenets of human decency are “sent to Coventry.” Examine the One Washington Place debacle in Batavia. One Washington Place Project In Batavia Terminated By Developer | Batavia, IL Patch The City of Batavia bought the property on the misguided assumption that IDOT would do what it said it would do and straighten out Route 25. Then Batavia solicited a developer (the very same one that owns the Mill Race Inn Tax Increment Financing site) on the equally misguided assumption that Batavia’s Tax Incentive Financing district created for the project with taxpayer money would be a sound investment. Batavia spent hundreds of thousands of dollars on environmental remediation of the One Washington Place site that included a leaking underground storage tank. But at least the City of Batavia’s site at the now-permanent corner of Route 25 and Route 25 is tidy and green. The foundation of the historic church is gone so it cannot look like an abandoned swimming pool that harbors bird flu and West Nile viruses. Batavia’s environmental issues are fixed. Their east side site is safe and does not offend the eye. 

Geneva’s ulcerated, necrotic, malignant wart at the southwest corner of Route 38 and 25 has metastasized to the surrounding neighborhood where five antebellum structures have been demolished within the space of a couple of years. Others are literally abandoned and destined for the same fate. The lead, mercury, arsenic, and asbestos cocktail remains uninvestigated and thus not remediated from Geneva’s industrial and automobile-related legacies on its east side. All we have from our TIF districts is blight on blight, squandered money, increased taxes, and missed opportunity.  For the public cost of the failed Mill Race Inn Charrette ($300,000+) and a high-end meat market ($750,000+), the City of Geneva could have bought the Mill Race Inn site. The City bought the Prairie Green site on the west side, so the precedent exists. The Shodeen Foundation bought the MRI site for $550,000 in 2014. It had been purchased for triple that number in 2004 by the now-bankrupt restaurant. The East State Street/Route 38 Improvement Project has been on the books since 2007. Has anyone noticed any improvement? What about the four-year-old Dunkin’ project, funded by public TIF cash and sales tax kickbacks on an uninhabitable “lust” site? That developer, with a wink and a nod from the Geneva City Council, fraudulently skipped getting an IDOT ROW permit and cannot open. In spite of its contractual obligation to Geneva taxpayers to pay its property tax, it hasn’t, and the City Council doesn’t care. 

A plan currently exists for MRI development that is known by the inner circle per the usual Geneva Way. The hearing the other night held by the Historic Preservation Commission had the usual vibe of a proforma this-is-a-done-deal. The applicant mildly complained about the width of the perimeter strip around the building, then said it all was acceptable. Subsequently when a couple of people (one was me) complained that if the remnants of the historic building should be restored it should be visible in something resembling its historic setting. So, the historically landmarked MRI parcel with its unique views of the River and Island shrank from about two acres to a postage stamp below the grade of Route 38 that no citizen could make financially viable.

How many more $’s gone down the drain would have been discovered if my request were not deemed overly burdensome? The Geneva City Council leaves everything to the staff who take direction from the mayor who appointed them all, and he controls the agenda. The Council views its Municipal Code as a book of suggestions, and it treats 65IlCS5/The Illinois Municipal Code with the same disdain. When the law reads “shall means must” the City Council and its legal staff translate the phrase to “maybe.”

One of you council members, in a comment on the wasted $300K, said he “would do it again.” I suppose his thinking was that the virtue in hitting yourself repeatedly in the head with a hammer is that it feels so good when you finally stop. You dug this hole but more digging is not the solution.

Sincerely,

Rod Nelson

TIFs and LIHTCs are Toxic for Geneva’s School Children, Seniors, and Lower Income Households

Tax Increment Financing (“TIF”) districts and Low-Income Housing Tax Credit (LIHTC) Projects might benefit current residents in some jurisdictions in Illinois. Geneva is not one of those places.

First, some background on TIFs is needed, plus an explanation of the failure of Geneva’s TIF1. Second, the harm done to existing property taxpayers and, more importantly, current school children will be described. The explanation for this net harm within Geneva Community Unit School District 304 can be found by first analyzing the School District’s specific revenue portfolio and then examining how the revenue portfolio interacts with the State of Illinois’ new Evidence-Based Funding formula.

TIF Districts have been around for decades. The enabling statute was designed to provide capital to invest in blighted areas or those at risk for blight. The devil is in the details. For example, a building is “at-risk” for blight based on age alone. Vacant parcels are also considered blighted. Ironically, by distorting property values, TIFs increase tear downs that add to the blight. Five antebellum structures that were the homes of eminent Genevans have been torn down in or near TIF3 in the last couple of years. These very definitions of blight are problematic for older towns like Geneva, and they are lethal for some Geneva neighborhoods, such as Dearborn’s Addition. Sufficient subjectivity exists in the criteria so that “blight” is in the eye of the beholder.

After the City Council defines a TIF district geographically, the property tax for each parcel within the TIF is “frozen” based on its assessment at the TIF’s inception. The various taxing bodies within the TIF district (schools, parks, libraries, townships, etc.) then collect tax dollars based on the frozen assessment for the 23-year life (which can be extended) of the TIF district. The municipal government then collects all the incremental tax revenue generated when the assessment of a parcel increases (“increments”) above the frozen baseline and deposits the proceeds in a TIF fund tied to the TIF district. These funds are supposed to improve infrastructure, but given the fungibility of cash, the TIF fund grants directly subsidize a specific developer.

Many generic risks exist for all TIFs and LIHTCs, but these risks are not borne uniformly. Here are a few of these risks with some Geneva examples:

  1. Over the past 75 years inflationary years have outnumbered deflationary years 72-3. This creates a powerful driver for increasing property values that favors the municipality’s TIF nominal value but magnifies the tax income losses for the other frozen out taxing bodies. (Inflation is not a law of nature. Steady deflation took place in the U.S. from 1800 to 1850.)

2) Long-term municipal bonds are often sold to directly fund long-life infrastructure assets (sewers, roads, sidewalks, etc.). Current taxpayers can use these assets early in the bond’s life. Bonds sold to provide the cash to fund TIFs immediately benefit only a subsidized developer. But the developer usually must pay income tax on the TIF funds, which reduces the taxpayers’ “bang for the buck” leverage compared to directly funded infrastructure. Tax Increment Financing – What you need to know – REJournals The TIF pot of gold for many taxpayers comes only after 23 years when the increment in assessed valuation suddenly starts flowing back to the frozen-out taxing bodies. Of course, during the 23 years, some taxpayers will be born, some will die (without any “death benefit” from their TIF investment), and many will move in or out of Geneva.

3) The premise of TIFs rests on the “but for” postulate: “But for” the TIF, no development over the 23 years would have happened. This hypothesis is not testable by the scientific method. But Geneva’s TIF1 (1982-2005) and TIF3 (2016-2039) are geographically substantially congruent, covering the same areas on both sides of the river near the bridge. (Tif3 is a gerrymandered, borderline legal oddity primarily focused on The Mill Race Inn and Nottolini Bottling works.) If TIF1 had been successful, why was the same area deemed blighted again only a decade later?

School District 304 publicly opposed TIF3. Mayor Burns went to the Middle School to speak in favor of TIF3 in 2016. His principal argument was that the City had no other tools to stimulate economic development. Hardly a year passed before the Mayor discovered the City could give away sales tax revenues, gift land assets, and waive permit fees to subsidize favored developers.

Here is what the City of Geneva website’s propaganda page says today about TIF1: “What happened during Geneva’s previous TIF[1] district?

Geneva TIF District #1 was established in 1982 and ended in 2005. During that time, the City of Geneva increased the EAV of the TIF district from $1.5 million in 1982 to over $20 million in 2005. When adjusted for inflation, this is over a 600% [nominal: ~1200%] increase in EAV. This was all done without raising taxes.” (FAQs • Geneva, IL • CivicEngage)

The above false claim assumes the “But for” hypothesis is as ironclad as one of Newton’s laws of physics. But the City’s numbers have no meaning in themselves and must be put in context. And the City’s claim that it caused the change in numbers is preposterous, as too many variables were in play. For example, $1.5mil in 1982 would have had to be worth $3.4mil in 2005 if adjusted for inflation to achieve the same buying power. What would have happened if the City of Geneva had invested $1.5mil in the S&P index in 1982? The pot of gold after 23 years would be worth $31.3mil cash in 2005, an increase of 2000%. $1.50 in 1982 → 2005 | Inflation Calculator (in2013dollars.com)  From 1982 to 2005 the total EAV in all of Kane County went from $2,097,298,889 to $12,204,273,167, an increase of 482%. StatsGrowthChart1978toPresent.pdf (kanecountyclerk.org)

One significant difference between TIF1 and TIF3 is that TIF1 contemplated immediate sizeable initial capital investment on parcels that were either undeveloped or obviously blighted (the Howell buildings north of State had been largely destroyed by fire earlier). TIF3 (runs from 2016-2039) is a “conservation” TIF that contemplates maintenance, not global redevelopment. The old Nottolini Bottling works in TIF3 may be an exception.

Sizeable and immediate increment in taxes was near-certain in TIF1 because shovel-ready development plans for the west riverbank developments were already in place and approved by the City Council. Interestingly, TIF1 was only “necessary” because a large commercial bank pulled out of a bond deal at the last moment. Read the December 9, 1982, issue of the Geneva Republican for details. Geneva Public Library District – Image Viewer (nmtvault.com)

4) When the City of Geneva freezes the assessed evaluation by creating Tax Increment Financing Districts, the City shifts the burden of the lost tax revenues in the ensuing years in equal proportions to all taxpayers of the other taxing bodies. About 70% of local property taxes go to School District 304. De facto, the Geneva City Council raises taxes for all District 304 taxpayers when it creates a TIF. To the extent the frozen library districts, park districts, townships, etc., overlap District 304, those taxes will also increase. Those affected include residents of parts of Batavia Highlands and parts of Mill Creek and all other residents in School District 304 but outside of the Geneva City limits. Taxation without representation was once celebrated in Boston with a Tea Party.

5) A TIF district creates an associated slush fund susceptible to corrupt practices, such as pay-to-play and kickbacks. These slush funds are like the landfill slush funds once used by Kane County to build a ballpark, canoe shoots, and other political pet projects. Chicago Real Estate Developer Convicted on Federal Fraud Charges for Swindling Banks and the City out of Millions of Dollars in Loans | USAO-NDIL | Department of Justice

Why Did TIF1 Fail to Prevent TIF3?

The short answer is that the Great Recession occurred a few years after 2005. The owners of many TIF1 commercial parcels that TIF subsidized successfully appealed their “increments” in assessed valuation. The only Geneva homeowner to appeal his increased assessment that I know of was Mayor Burns. The Daily Herald from Arlington Heights, Illinois on March 14, 2008 · Page 350 (newspapers.com) These were the “increments,” i.e., the “I” in “TIF” that were supposed to create the pot of gold. But the pot vanished.

TIF1 was implemented in 1982 (when a few citizens, including me, opposed it publicly). That TIF expired in 2005. Here are the tax records for three example properties within or near both TIF1 and TIF3:

(Tax History from assessor’s database):

10-16 West State (a Herrington Inn parcel)

YearBase Tax DueNet Taxable Value
201476,251.40748,442
201354,335.86544,257
201256,518.74601,755
201183,701.00818,559
2010119,827.521,268,993
200987,954.261,003,015
2008105,883.561,268,949
200796,085.261,212,217
200693,988.241,132,913

27 N Bennett (Geneva Place Retirement)

Tax History
Year Base Tax Due Net Taxable Value
2014 110,681.20 1,140,975
2013 108,409.60 1,140,975
2012 106,636.84 1,194,363
2011 100,674.52 1,199,833
2010 144,810.62 1,875,686
2009 133,022.86 1,875,686
2008 140,332.34 2,032,858
2007 139,901.12 2,032,858
2006 149,670.12 2,116,577
2005 51,043.82 700,442
2004 18,665.50 252,081

23 Kane Street (Nelson residence – directly adjacent to TIF3)

YearTAXNet Taxable Value
20149,987.72102,960
20139,782.74102,960
20129,757.98109,292
20119,754.88116,258
20109,384.08121,549
20098,739.36123,229
20088,541.28123,729
20078,151.80118,451
20067,919.26111,991
20057,578.22103,991
20047,320.2298,861
20036,965.3694,593
20026,891.8890,820

So between 2006 and 2014, the taxes on the Nelson Residence went up 28% (no significant capital improvements in that period). This increase is despite the homestead exemption and, after 2011, the senior exemption. Astonishingly, Nelson’s taxes never went down in any year during the “Great Recession.”

Between 2006 and 2014, the tax on a Herrington Inn parcel went down 19%. A drop from high to low of about 55% occurred. This property owner also filed a lawsuit against the City of Geneva when the infrastructure sewer improvements paid for by the diverted taxes of TIF1 catastrophically failed, resulting in flooding. 

Between 2006 and 2014, the tax on Geneva Place Retirement went down by 26%. A drop from high to low of about 55% occurred. 

During the school district’s scant few actual “pay off” years between the two TIFs 1&3, a homeowner’s share of school taxes went up substantially while the two TIF parcels’ share went down substantially. This is an anecdotal example, but considering the time value of money and risk, TIF1 was a terrible investment for Geneva’s taxpayers and school children between 1982 and 2005.

If TIF3 pays off, the winners will be the taxpayers 16 years from now. If it is unsuccessful, the school children will again be the losers. I submit that the school children of 1982-2005 were the proven losers in TIF1. Again, if TIF1 worked, why was TIF3 created?

TIF3 should be subtitled “The Developers Relief Act of 2016.” The demise and decay of the iconic Mill Race Inn may have been the impetus for the TIF3 plan. Indeed, the initial TIF3 proposal maps included only the east river bank parcels.  Our current school children might be better served if the City used its condemnation powers to force at least the demolition of the increasingly dangerous eyesore that was Mill Race Inn. I write this as the person who lives in the house originally built by the second proprietor (John Rystrom, a carriage maker) of the Alexander blacksmith shop that was later the core of the original limestone Mill Race Inn in the 1930s. (The author has owned and lived in three historic antebellum “plaque” Geneva homes: McKinley House, William Conant House, and Hester House. He also successfully prepared and submitted the application for listing on the National Register for the William Moats Farm in rural Ogle County.) https://en.wikipedia.org/wiki/William_Moats_Farm

TIFs are real estate speculations made by amateurs on behalf of taxpayers for the benefit of politically connected developers. Few taxpayers would speculate on lottery tickets with an unknown payoff amount and with the drawing date unfixed decades into the future. Ironically, the original Town of Geneva was platted by land speculators just a few months before the Panic of 1837. Several of them filed for bankruptcy in 1843. One of the speculators, James Herrington, died insolvent and as a convicted felon after he assaulted his business partner, the one-armed Mark Daniels.

TIFs and School Funding in Geneva, Illinois

Understanding why TIFs are harmful in Geneva requires knowledge of the provisions of Illinois’ new Evidence-Based School Funding (EBF) plan.

In Illinois, state money for primary and secondary education is distributed according to two variables: Equalization Formula Grants plus Supplemental Low-Income Grants. The laudable goal of the EBF is to provide adequate funding for each district and each student. The process results in assigning each school district to one of four “tiers of adequacy.”

Tier 1 gets the most state money/pupil, and Tier 4 gets the least. Geneva is in Tier 4. The 91% number emerges as the percent of Geneva’s school funding sourced from local taxes (see graph above). The State average is 66% from local sources. The school tax is about 70% of a Genevan’s property tax bill, and about 75% of Geneva’s property tax base is in Geneva homes.

What does this have to do with TIF districts and LIHTC housing projects? The answer is “plenty.”

The ink was barely dry on the EBF legislation when strategies for gaming the formula were implemented. TIFs are the primary gambit. Chicago has 36% of its property tax base hidden or reduced from the State School EBF in 136 different TIFs. Share of City Property Tax Revenues Claimed by TIF Funds Grew 5% in 2 Years: Report | Chicago News | WTTW Geneva’s hidden EAV in TIFs would not be nearly sufficient to get into Tier 3, where EAV per-pupil determines State funding. Geneva would still get the nominal, fixed per-pupil State grant.

Even the short-run impact of a TIF district may be mitigated in some Illinois School Districts (but not Geneva) because Illinois’ school aid formula depends on the property tax base per pupil that compensate school districts, at least to some degree, for the loss of tax base due to TIF. For example, Illinois’ state-aid formula subtracts TIF increments [i.e., “hides” the increment] from the available tax base per pupil to calculate state aid.

The “some degree” of mitigation from a TIF in Geneva is zero since state support amounts to about 4.5% of the total. The sweet spot for this TIF-related mitigating effect on homeowners’ property tax lies somewhere in Tier 2, where State aid provides 40-60% of the total school budget. School districts in Tier 1 have such a small component of local funding that there remains a negligible effect left to mitigate. The local “tax mitigation” that results from hiding TIF properties from the funding formula phases out entirely for wealthier districts in Tier 4 (like Geneva). From the State, Geneva receives a “base grant” of a few hundred dollars per pupil that is fixed. This is analogous to the federal tax deduction for local property taxes that is capped at $10,000. A large percentage of Geneva taxpayers “lose” some of their property tax deduction from Federal Income tax.

Like TIFs, LIHTC affordable Housing Projects like Emma’s Landing in Geneva also serve to hide assessed valuation from the EBF state school funding plan. This is so because the applicable Illinois statute (35 ILCS 200) does not use the fair market value of such projects, but rather uses a tax algorithm based on the LIHTC project’s income. This is really an income tax, not a property tax. Again, for LIHTC projects this mitigating effect on property tax has a “sweet spot” somewhere within Tier 2 or 3 school districts. The mitigation has the same mechanism as TIFs – “hiding” assessed evaluation from the calculation that determines the amount of state aid. For Emma’s Landing This amounts to ~50% subsidy from the other Geneva property taxpayers.

For example, a LIHTC project (Water’s Edge) in Elgin District 46 cost $16+ million to build 50 units but is tax assessed at $3.3 mil and is also in a TIF district. Elgin provides 46% of the support for its schools from local taxes – half the 91% provided by Geneva. Last year, the Water’s Edge project paid school taxes totaling $1700 on all 50 households combined. A single household in Geneva’s Ridgewood neighborhood valued at $172,000 pays $1100 dollars a year in Geneva school taxes.

Water’s Edge, 418 N Center St, South Elgin 2000 Tax Bill – Same Developer as Emma’s Landing

Example of a Ridgewood, Geneva 2000 Tax Bill

Obviously, the Geneva household pays about 40 times what a LIHTC/TIF Water’s Edge South Elgin household pays in school taxes. The latter, of course, pays the tax through rent. Emma’s Landing is a LIHTC project, but it is not in a TIF district.

Property taxes are extremely regressive, that is, they hit lower-income households with limited discretionary income the hardest. If you lose your job, at least you lose your income tax liability. But your property taxes just keep rolling along, sometimes increasing year by year, until you are forced out of your home.

TIFs, Emma’s Landing, and the proposed 250 unit Cornerstone (?LIHTC) project will put upward pressure on Geneva’s school tax levy. If affordable housing is the goal, the City of Geneva should concentrate on putting downward pressure on property taxes. Lower-income households living in $172,000 homes should not be taxed out of town because they are forced to subsidize other lower-income Genevans living in new homes that cost $450,000 each to build.

A tier 4 school district like Geneva 304 (designated by the State as “over-funded” at 105%) accrues none of the TIF or LIHTC “hide-the-EAV” benefits that come through Illinois’ Evidence-Based school funding formula. These benefits accrue to low-EAV per-pupil Tier 2 districts like Elgin 46. TIFs and LIHTCs in Geneva create more problems and higher expenses but few, if any, benefits.

The Geneva City Council’s scramble to accept anything and anybody to give away tax money to is tactically foolish and strategically disastrous. Subsidizing with public money, much of the cash coming from Geneva homeowners, a drive-thru at the top of a hill at a busy un-signaled intersection that is in its 4th year of construction and a LIHTC project tucked up against the RR tracks next to a brownfield of roofless buildings and abandoned vehicles are examples of short-sighted and distorted decisions that are an embarrassment to the community.

Each of Illinois’s 7000 local taxing bodies must consider its unique set of circumstances.

ps: Significant resources are involved here:

Skewing, Kurtosis and Low-Income Housing Tax Credit (LIHTC) Subsidies Threaten Current Geneva Lower-Income Households

Skewing measures the symmetry of a data distribution, while kurtosis is a measure of the heaviness of the distribution’s tails. The distribution of the total cost of domiciling by household in Geneva is approximated in figure 16 directly below. This distribution, when compared with Batavia’s figure 16, shows that Geneva is skewed to the right towards a higher cost of living, and the distribution “curve” is kurtotic, i.e., the tails are heavier. Batavia’s cost distribution looks more “normal” (i.e., Gaussian/binomial) as it is more symmetric, more peaked in the middle, and has lighter tails.

Geneva Illinois Housing market data real estate research (towncharts.com)

Batavia Illinois Housing market data real estate research (towncharts.com)

The data for these above graphs are from the 2020 American Community Survey of the US Census. The 2016 version of this survey provided the data that resulted in Geneva’s landing on the relatively short list of Illinois communities deemed “deficient” in affordable housing. Geneva barely missed a passing grade. Batavia passed.

Geneva’s 7.7% affordability was the sixth-highest of the forty-six state-wide <10% “flunkers,” and Geneva was highest in Kane County among the five Kane “flunkers.” Campton Hills (twenty square miles to Geneva’s ten and with half Geneva’s population) leads the State in unaffordability at 0.8%. A thinking person’s approach to Geneva’s “affordability crisis” might have been to demand a recount, as the “count” was made by an algorithm, not an actual count.

The fatal flaw in these pseudoscientific affordability conclusions is that the denominators were determined by arbitrary and capricious community boundaries set mostly long ago but still evolving (such as Campton Hills, incorporated in 2007), and not on a rational sampling method. Plus, the smaller the denominator, the higher the random variance/sampling error.

As examples, most of the “failing” communities, like Naperville, Lake Forest, and Lake Bluff, simply ignored the toothless, feel-good Illinois law passed twenty years ago that required them to create a remedial plan. Geneva did create a plan. For some reason known only to an inner circle, Geneva hit on the Federal Low-Income Housing Tax Credit (“LIHTC”) program as the solution to its cherry-picked phantom “problem.”

Then, during a raging lethal pandemic that led to the emergency suspension of many laws and rules, the Geneva City Council solicited the single-employee Burton Foundation to solve its supposed affordable housing crisis. Despite the Governor’s Emergency Executive Orders that sought to “…encourage public bodies to postpone consideration of public business when possible,” the Geneva City Council found postponement impossible for its pet LIHTC project. In fact, Geneva accelerated, to the point of an ambush, the LIHTC process under the cover of the pandemic.

The graph above shows that Geneva’s “problem” with affordable housing is not a shortage of 45-unit LIHTC projects. Rather, the “problem” is a shortage of about 200-250 rental apartments.

The reasons for the housing difference between the two adjacent half-townships of Geneva and Batavia have many possible historical origins. Geneva’s SE quadrant is largely occupied by the legacies of the Kane County Poor Farm: the landfill, the ballpark, the sheriff’s office, and former jail sites, plus a forest preserve, courtesy of Col. Fabyan. Elsewhere, tax-exempt County Government buildings occupy considerable real estate as does the not-for-profit tax-exempt cash-cow hospital.

The monthly owner-cost graphs above that compare Geneva with Batavia reveal the biggest difference is that the “left tail” of the Geneva graph is “missing.” This left tail is where the “missing” Geneva apartments would have been concentrated. Batavia’s ratio of rented to owner-occupied households is roughly twice that of Geneva’s ratio.

Ironically, Geneva has just received a proposal for a 250-unit “attainable rent” development at Kirk and Route 38. See: https://www.geneva.il.us/1453/Cornerstone-Apartments

If built, this development would have “solved” Geneva’s affordability “problem.” However, while Geneva focused on a small scale, staggeringly expensive, and local property tax-subsidized LIHTC project, other nearby communities were and are building apartments in exceptionally large numbers. Mill Creek has apartment complexes. The former Charlestown Mall site is a formidable potential competitor. The apartment complex (Prairie Centre) at the former St. Charles Mall on Route 38 just west of Geneva is already built, etc. Look north to Pingree Grove and south to Route 59 at the toll road. No regional shortage of apartments is apparent.

WARNING: Cornerstone Housing Group of Nebraska has done LIHTC projects. If this project is simply a 5x Emma’s Landing it could create a 5x squeeze on existing Geneva lower-income households by multiplying the impact times five of the special deeply discounted property tax treatment of LIHTC projects. Searches of the 18-page preliminary narrative document for “low income” and “LIHTC” return zero hits. In many other respects, the narrative describes a LIHTC financed project. If this turns out to be the case without mentioning it in the narrative, transparency remains absent without leave in Geneva.

Geneva has approved the 45-unit Emma’s Landing LIHTC housing project at an average construction cost of over $450,000 per unit. Geneva used a low-ball, “Made As Instructed” appraisal to sell the Emma parcel for at least $400,000 less than its value – a gift to the Burton Foundation. Geneva spent $300,000 on a “Charrette” that resulted in a failed Mill Race Inn 130-unit apartment proposal, a double-cross of the developer, and hard feelings all around. Geneva is giving away sales tax money and grants to a failed Dunkin project whose owner has not paid the property taxes. Geneva subsidized a meat market to the tune of 36% of the total startup costs or about $700,000. This project abuts Harrison Street Elementary School, which has the lowest ratio of playground area per pupil in the district, and Geneva gave away that adjacent property just as 250 units of housing are looming nearby. Geneva gave away $400,000 to a burger/sushi restaurant in an architectural box, causing the re-developer of the historic Little Owl/Wrate Building directly across the street to abandon and board up its far more important project.

The neighborhoods in Geneva comprised of homes valued in the $200,000-$300,000 are where residents of more modest means generally live. These Geneva households with less discretionary income are most vulnerable to upward pressure on the highly regressive property tax. Geneva is also locked into an expensive long-term electricity contract with Prairie State Power, the largest carbon polluter in Illinois:

https://prairierivers.org/uncategorized/2021/07/prairie-state-coal-plant-debunked/

Batavia, which has a smaller piece of Prairie State Power than Geneva, has already diverted funds from other sources (sales tax) to subsidize electricity to soften the blow on households. Geneva gives its sales tax revenue to developers who will play football against existing Geneva businesses on a tilted pitch.

According to the various inconsistent and politically slanted “fact sheets” promulgated by the Geneva City Council, Emma’s Landing will produce somewhere between ten and one hundred new school children. The fiscal impact risk on school costs from Emma’s Landing is confounded by the “law of small numbers” (Poisson distribution). About 12% of District #304 total students have Individualized Educational Plans (IEPs). Understandably, the expense of these students can be double the average or more. Of course, no member of the City Council probed this issue, and the School Board never weighed in. If twenty school children reside at Emma’s Landing require IEPs, the added expense for School District 304 could be $1mil/yr.

Geneva desperately needs new leadership. The City Council has not had a spirited public debate on any topic since the “chicken coops in the backyard” kerfuffle. Nearly every important issue is secretly decided before the public even knows about it. The City Council has no control over its own agenda nor seems interested in seizing control. No one in the city organization understands the plain language of the Geneva Municipal Code. Robert’s Rules are merely suggestions. And what about the sweetheart Emma’s Landing LIHTC deal with the Fellhauer couple/Burton Foundation and all the failed expensive give-away projects? Today’s Geneva is more akin to Madiganistan than the town I knew in the 1950s.

Next to be addressed in this series will be the harmful effects of Tax Increment Financing (TIF) districts on low-income Geneva households and on property taxes of all households in School District 304, including those outside the City of Geneva. Where was the School Board of District 304 when the City Council stole the kid’s assets and raised their parents’ liabilities? Could it be the School Board was properly focusing on the pandemic crisis at hand and overlooked the City of Geneva using the pandemic’s fog-of-war to pick the kids’ pockets?

Emma’s Landing: Persisting Questions about Geneva’s Low Income Housing Tax Credit (“LIHTC”) Affordable Housing Project

March 22, 2022

The Geneva Way: Always More Questions Than Answers, Last Night’s “Episode of the Secret Tapes

Dateline: Geneva City Hall, March 21, 2022:

The Geneva City Council went into another secret session last night. This time the topic was what to do with all those pesky secret minutes and tapes. For a time recently, the Council handled the required semi-annual reviews by simply not doing any reviews. The Council is very experienced in the tactic of ignoring statutes, ordinances, and municipal codes, and then cherry-picking the ones that suit its political agenda. When I questioned this lapse in the required secret meeting reviews, the reviews began again.

Last night on the Council’s agenda was the destruction of the tapes of the secret meetings that happened to occur during the time when the ordinance for Emma’s Landing was secretly under custom-fabrication to the applicant’s exact specifications in the skunkworks at First and State. When I saw this tape destruction plan, I immediately objected. As a ghosted and gaslighted citizen, I expected and received the predictable crickets’ song.

However, the procedure employed last night to dispose of agenda item 14 was improper. At about the 2:35 mark of the video of the meeting the chair properly addressed agenda item “4. AMENDMENTS TO AGENDA.” No motion to amend was offered. The disposal of an agenda item can follow several paths under Robert’s Rules. Simply skipping over the item is not one of those paths. “Item 14” addressed audio tapes vital to the transparency of the Emma’s Landing Geneva City Council legislation approved through Ordinance 2021-03 on March 8, 2021. The application for the Planned Unit Development Ordinance 2021-03 that contains the fraudulent final plat was made by the Burton Foundation on August 12, 2020. Of course, we know from the Manning-DeGroot email of Feb 25, 2020, that the plan was de-facto approved improperly in secret on February 24, 2020, or earlier. We must hear that tape to clarify the details.

Here is Agenda Item 14 from last night and the sole motion that came out of the secret closed session.

“Agenda item for March 21, 2022: 14. “OPEN SESSION TO APPROVE CERTAIN CLOSED SESSION MINUTES AND APPROVAL OF DESTRUCTION OF CLOSED SESSION AUDIO RECORDINGS JANUARY 2020 THROUGH SEPTEMBER 2020 PURSUANT TO 5 ILCS 12/2.06 (c).” [Actually, the correct statute is 5 ILCS 120/2.06 (c). But even this correct citation is incomplete in this context.]

Kosirog: “I’d like to make a motion to approve City Council closed session minutes approved for release on March 21st, 2022.  First the remaining minutes from January 22nd, 2013. Second the remaining minutes for March 4th, 2013. Third the full minutes from April 22nd, 2013. Fourth the remaining minutes from August 5th, 2013. Fifth the remaining minutes from December 2nd, 2013. Sixth remaining minutes from July 10th, 2017. Seventh the partial minutes from February 12th, 2018. Eighth the minutes from August 26th, 2019. Ninth the minutes of January 19th, 2021, and Tenth and lastly the partial minutes from September 7th, 2021.” The motion passed. The Feb 10 and Feb 24, 2020, minutes were not released.

Where are those audio recordings of the Special Meeting closed secret sessions of February 10 and 24, 2020 whose destruction was on the agenda? What, exactly, was the “use” for the “purchase of land for the use of the public body” that was cited on Feb 10 and 24, 2020, as the exemption from sunlight, transparency, and the Illinois Open Meetings Act?

Obviously, a clandestine vote was taken last night, and the destruction of audiotapes motion did not pass. But that “action” to dispose of an agenda item must be taken in an open session. If the issue was removed from the agenda, who made the motion to do so, who seconded it, and what was the tally? The vigilante insurrectionists are still occupying City Hall. Stockholm’s Syndrome is progressing to its most virulent and corrupting form. If a broken trust were so easy to repair, why are there so many divorces?

What could still be so “tip-top secret” about a contemplated land purchase under consideration more than two years ago that makes it inviolate? Release the tapes and minutes or resign.

March 21, 2022

Defund the Geneva Zoning Police

This commentary discusses two specific Geneva issues: Emma’s Landing and an unlawful secret City Council meeting. Specifically addressed are two documents, copies of which are easily accessed at www.genevanotes.com.

By the way, I cannot fathom why the low-income-housing-tax-credit (“LIHTC”) affordable homes at the “Landing” in Sterling Manor were named for Emma and not after Lucy Sterling Geneva’s first schoolteacher. But that is water over the first Geneva dam that the redoubtable Samuel Sterling built. The Sterlings also created the Geneva House Tavern, where today stands the Geneva City Hall of ill-repute.

Twenty years ago, in Klaeren versus Lisle, the Illinois Supreme Court, probably inadvertently, nearly extinguished the State’s statutory protections for individual property owners who special use permits could harm. One legal observer opined that the Court’s Klaeren ruling “…turned Illinois zoning law on its head.” Klaeren increased the significant pre-existing confusion over whether municipal zoning police power was fundamentally legislative or quasi-judicial.

Discussion of Klaeren’s Chaos

Subsequent decisions have clarified the Klaeren ruling somewhat. However, Klaren’s laser focus on procedure blinded or provided cover for the Geneva City Council (and its captive minions on the Zoning Commission) when it comes to substance. This fog-of-war has allowed the Geneva municipal zoning police (the municipal authority to zone is a police power) to abuse the individuals put most at risk by special uses. Nearby neighbors are among the persons most at risk for immediate harm. Required Special Use Standards were put in place primarily to protect them.

However, some special use zoning decisions can also harm whole classes of residents in a municipality. In the case of Emma’s Landing, the longer-term impact of higher local property taxes required to subsidize Emma’s will adversely affect current lower-income Geneva households disproportionally, as property tax is a highly regressive tax. Another entire class of people harmed by Emma’s Landing is comprised of residents living outside of the corporate limits of the City of Geneva but inside Geneva School District 304. These people, such as those in the Batavia Highlands and Mill Creek are victims of taxation without representation because they too must subsidize Emma’s Landing.

While a harmed citizen has the right to seek formal judicial relief, the keys to the courthouse are priced out of reach. Genevan Walter Stackman spent $70,000 to keep the new vinyl-clad windows in the historic district that he was induced to install by a Federal Green Energy income tax incentive of a few hundred dollars. A Geneva city official dismissed Stackman’s victory at the Appellate Court as “he found a loophole.”

The Geneva Zoning Police, the City Council, has badly, even illegally, misbehaved to the point of police brutality.

In Geneva, over the last two leaderless decades, what has evolved is an overweening devotion to Klaerenesque ceremonial public pomp but a near-total inattention to mandatory codified zoning standards. Special Use Permitting for a  Planned Unit Development is now a purely politically driven legislative process while masquerading as a due process quasi-adjudication. The plain language of the rules, i.e., the Geneva Municipal Code, is now irrelevant at best and unlawfully circumvented or ignored at worst. Political goals are determinative under this rudderless Geneva mob rule.

For example, the East Side Dunkin’ Special Use project, now well into its fourth year and under the threat of forfeiture due to unpaid property taxes, was permitted to begin construction without addressing encroachments on both Crissey and State Streets, as required to meet the mandatory Geneva Special Use Standard 8. A Geneva building permit was issued without the required IDOT permit. IDOT, not the City, stopped the project. Another recent City Council farce was simultaneously granting a Special Use and a Variance to Malone’s Funeral Home to replace a historic antebellum structure with a parking lot. Suppose a variance (permission to violate codes) is needed due to hardships created by the applicant’s prior misdeeds. In that case, a special use permit obviously fails to meet the required mandatory (“shall” means “must”) nine code standards so the permit must be denied.

My first concern is the Special Services Area for Emma’s Landing Planned Unit Development on the City Council agenda of March 21, 2022. The SSA consideration seems premature since Mr. Fritz, the Geneva Assessor, has not yet created an initial tax bill. Emma’s is unique in Geneva, and the State tax rules (see: HB2621) were altered in late 2021 for LIHTC properties. Not a single other Geneva parcel is taxed under Emma’s deeply discounted property tax paradigm.

In the material in the packet for March 21, 2022, was a copy of the recorded Final Plat of the Planned Unit Development that the Illinois Housing Development Authority required. Curiously, the IHDA copy of the required document is unsigned. That document, I believe, is fraudulent. Fraudulent because the owner of the parcel comprising Emma’s Landing on April 21, 2021, was the City of Geneva. The PUD document has a certification via a notarized and recorded signature of an individual swearing that she owned the parcel and caused it to be subdivided. Yet this signatory did not own the property then or ever, and the City Council knew this. How and why was this deception allowed?

I believe the City duped the person who signed the PUD document as the owner, for it was she who provided the small access easement as “Emma’s Way” for access to Emma’s Landing PUD. This access portion of “Emma’s Way” was a small easement through parcel number 12-08-200-064 and this ROW easement is clearly not part of the PUD parcel, which is entirely confined to 12-08-200-073, the City-owned parcel.

Some weasel of a pettifogging loophole-Louie duped the signer into thinking she was a “part-owner” of the PUD and, as such, was entitled to sign as the (part) owner (see “owner” definition below) of the PUD Plat. This is the one minute detail of this whole repugnant Emma’s caper that most infuriates me personally. The signer was the then very recently widowed wife of a much-respected Genevan who was a personal acquaintance of mine.

The signer of the PUD Plat sold the 3.4-acre parcel 12-08-200-064 to James N. Bergman on June 29, 2021, for $650,000, or $195,000 per acre. This is double what Geneva Taxpayers received from the charitable Burton Foundation. The tax bills are to be sent to James N. Bergman, c/o The Burton Foundation, Tracey L. Manning, President, 2900 Larkin, Elgin, Illinois. Look out Genevans, another ethically less-than-sterling sweetheart backroom deal may soon become known involving the same gang of suspects.

One need not delve deeply into the Geneva Municipal Code pertaining to PUDs to find the legislative treachery inherent in this fraudulent PUD Special Use document. The Geneva PUD rules begin with this: “11-9-3: – INITIATION: The owner of the property for which a planned unit development is sought may initiate a request for a special use planned unit development. (Ord. 95-28, 5-1-1995)” Also, this rule for construction applies to all provisions of the GENEVA ZONING ORDINANCE: “11-1-2: – INTERPRETATION: A. In their interpretation and application, the provisions of this title shall be held to be the minimum requirements for the promotion of the public health, safety, morals, comfort, convenience, prosperity and general welfare.”

As the sole owner, the City of Geneva unlawfully applied to itself for a PUD approval and then tried to camouflage this fact through a clumsy and vicious ruse. All the City Council’s political chips secretly and long before had been wagered unanimously on Emma. But this was not a gamble at all, for the Council, acting as zoning police, controlled the Roulette wheel. And they say racketeering is a thing of the past. Then the Council, with faked diligence and in a feigned quasi-judicial manner, considered the objections of people like myself but never applied the mandatory standards in its code before ruling against me and others.

If this was not a kangaroo’s court, it was at least its biological cousin’s the wallabies. How, in God’s Green Earth, did the City Council leap over the ownership hurdle presented by 11-9-3? The answer, the Council furtively ran around that hurdle to grab its virtue-signaling political gold medal. Then, at the end of that artificial rainbow, the pot of 3.4 million dollars in LIHTC fees and profits went to the eventual owner, the one-employee Burton Foundation. In the strange case of the feigned owner, the City Council Zoning Police acted as insurrectionists who unlawfully stormed and occupied City Hall to impersonate sworn police officers.

Now someone (probably a lawyer for the City) might claim “owner” or “initiate” could mean many things. But the rules for construction contained in the Municipal Code require the strict definition to be applied. For example, please see 1-2-2: – GENERAL DEFINITIONS: Owner: Applied to a building or land, shall include any part owner, joint owner, tenant in common or joint tenant of the whole or of a part of such building or land.

More importantly, when Herbert Hoover, Frederick Law Olmstead, and others framed the template for the Geneva Municipal Code and Comprehensive Plan almost 100 years ago, they correctly focused on the current residents’ health, safety, morals, and general welfare.

For example, these framers did not envision a scenario where an anonymous LLC (a “person” per Code definition) could become an “owner” by buying a call option from the owner for a nominal fee. This option could be made contingent on a successful application to the City for any combination of the following examples: TIF grant, sales tax rebate, waiver of permit and hook-up fees, a special use PUD containing such things as a vape shop, massage parlor, cannabis dispensary, adult bookstore, meat market, donut drive through, sports betting parlor, tavern, or even an abortion clinic all on a parcel abutting the Harrison Street School.

Second, but related, is the Council’s consideration on March 21, 2022, of whether to destroy tapes of its secret sessions. The Council secretly approved (was unanimously “comfortable with”) Emma’s Landing in early 2020 or even before. Contained in an email to the President of the Burton Foundation from the Geneva Director of Development dated February 25, 2020, is this:

“Good News, we were able to discuss your incentive request with the Council again last night. They are comfortable with a full donation of the land and capping the amount you pay in permit fees at $150,000.”

“Again last night” was February 24, 2020, when a closed secret session was held by the Geneva City Council Zoning Police . The City Council cited and invoked the “purchase of land for public use” exemption from the Illinois Open Meetings Act to go sub rosa. The gifting of public property and permit fees is explicitly not exempt from the sunshine of an open meeting.

The conclusion is inescapable that the unanimous “comfort” decision expressed by the Council Police occurred during the closed session of February 24,2020. The email passage cited above is contained in a 48-page document titled “Site Control” that I obtained via a FOIA request from IHDA. I suspect the document was provided by Tracey Manning of the Burton Foundation so as to create plausible deniability of involvement in a ruse. Of course, she threw her correspondent under the bus.

“Site Control” was required to be confirmed to IHDA before its deadline to consider LIHTC funding of Emma’s landing. In its reckless abandon, the City Council was ultimately forced to drop the secretly prearranged gift of Emma’s parcel and then ambush the community at the last moment with a steeply discounted sale from an MAI appraisal.

Please remember that the City sold to UPRR in 2019 in an arms-length transaction the least valuable residential one acre of the site (the narrow strip along the existing trackage) for $261,000. Then the City Council got a “Made As Instructed” appraisal of the remaining 6.2 acres of $732,500 or $118,000 an acre. The City Council “sold” the parcel to Burton Foundation for $95,000 an acre. The “basis” of the land sold for the steeply discounted $586,000 was set at 1.3 million dollars by IHDA for purposes of determining the Developer’s remuneration. This represents the typical Illinois “smoke and mirrors” creative approach to money laundering. This also represents the exact type of feared “personal gain” mentioned in passing by Attorney Ostfeld, who Geneva residents hired to address the Council. The comment sent the Geneva mayor into a boorish Lightfoot tirade on July 13, 2020.

 (2171) City Council Meeting July 13, 2020 – City of Geneva, Illinois – YouTube 

Geneva was one of 22 LIHTC projects funded by IHDA during its 2020 cycle. Twenty-two applications were denied. The Geneva City Council cheated to make the application playoffs. A moral community would confess to crimes committed in its name and request to be disqualified. If Geneva in the persons of its City Council lasts a thousand years, people will say this was their foulest hour.

March 10, 2022

Ambushes and Smoking Guns at Emma’s Landing: The Geneva Zoning Police Cite Fraudulent Open Meeting Act Exemption for Land Purchase, then Discuss Land Gift in Secret and by a Gambit Known as Noah’s Arking

“The Geneva Way” is a two-decade-old system whereby the Geneva municipal authorities only let an issue reach the public’s notice or the City’s posted public agenda until if and when the issue is already secretly decided. By the time a citizen hears about it, it is a done deal. The process that led to Emma’s Landing was a typical example of a favorite “Geneva Way” tactic: the ambush. An item is placed on an agenda late in the afternoon on a Friday and then is approved without discussion by 9pm on Monday. The last-minute and unscheduled “Special Meeting” ruse is also a Geneva City Council favorite form of treachery and was deployed more than once in this example.

Please examine carefully the two attached documents. Take particular notice of the “again last night” phrase in the second document. Also watch the video (link is below) from July 13, 2020, where the mayor sanctimoniously berates an attorney who asks that the Emma’s Landing train be slowed down to give citizens time to examine the proposal (during a historically unprecedented pandemic). Watch the attorney, Mr. Ostfeld, only gently and politely hinting that sometimes in Illinois quick. secret, back-room deals can obscure fraud. He was on to something.

One assistant U.S. attorney [click on:] called the Low Income Housing Tax Credit program a “subterranean ATM, and only the developers know the PIN.”

It must be noted that the “Developer’s [i.e., Burton Foundation] Fee” for Emma’s Landing according to IHDA’s undated “Common Application Spread Sheet” (circa spring 2020) was set at $1,715, 683. But this figure is only part of the story and about half the total take. The Burton Foundation had one employee: President Tracey Manning Fellhauer. (See Burton Foundation IRS Form 990 at GuideStar.org)

Burton Foundation 2019 IRS Form 990

Genevans should know that the ~$1.8mil fee paid to Burton is based on the total cost basis, including the waived permit fees and property value before the steeply discounted sales price discount. About 11% of the basis value of Geneva’s “donation” goes to Burton Foundation in the form of cash. The “basis” of the land sold for the steeply discounted $586,000 was set at $1.3 mil by IHDA. Talk about smoke and mirrors. Bryan Fellhauer, a principal of Door Creek Construction, is the General Contractor who did the cost estimate for Emma’s Landing. Fees and profits from Emma’s will total $1,370,799 paid to Door Creek. (See: IHDA 11831 Construction Cost Breakdown.) This means a total of roughly $3.4mil will go to small entities controlled by Tracey and Bryan Fellhauer. “Personal Gain” takes many forms in Illinois and cash, after a good laundering, can defy gravity by flowing uphill.

The two documents above tell a sordid tale. A secret meeting was held on February 24th, 2020, and was falsely cloaked as a discussion of a mythical land purchase by the City of Geneva. The meeting’s real purpose was to discuss gifts of public land and taxpayer cash to a private entity, the Burton Foundation. The Illinois Open Meetings Act does allow a closed session for the purpose of negotiating the purchase of land for public use. However, the only sale-of-public-land topic that can be addressed secretly is the selling price. The concept and decision to sell the public land asset must be discussed and voted upon in an open session. Obviously, a cash gift of public funds (in the form of waiving of developer fees) requires that both deliberations over the concept and the decision to make the gift occur in an open session. In this case, illegal action was taken during a fraudulent secret session. Then the decision was communicated only to the beneficiary of the chicanery: The Burton Foundation.

The “again last night” phrase suggests previous improper deliberations and decisions. On February 10, 2020, a secret topic was on the agenda of another “Special Meeting.” This topic was also cloaked by the “purchase or lease” exemption of the Open Meetings Act.

IHDA improperly accepted the red-lined second document as proof of “site control” that was required before acceptance of the Emma’s Landing application. (see IHDA document 11831_”D3_Site Control_Emmas Landing_The Burton Foundation, undated.”) The red box in the “site control” document is in the document as received by the author from IHDA via a FOIA request.

The music played during this tap dance has a certain Madiganistan RICO beat to it, similar to the soundtrack of the Illinois “Greylord, the Musical.” The band for Greylord was “The Ides of IRS.” Ironically, Dan Webb had a lead role in “Greylord,” just as he had in the more contemporary drama, “Smollett.”

“Special COW Feb 24 2020” contains this: “CLOSED SESSION ON THE PURCHASE OR LEASE OF REAL PROPERTY FOR THE USE OF THE PUBLIC BODY.” “DeGroot to Manning 25 Feb 2020” contains this: “Good news, we were able to discuss your incentive request with the Council again last night. They are comfortable with full donation of the land and capping the amount you pay in permit fees at $150,000. Third party costs will be charged at the normal rate. We will be working with our attorney on how best to memorialize this moving forward.” (The “full donation” fell apart because an IHDA application deadline was looming, and outside voices were beginning to ask how many votes were required on the council.) In July 2020 the mayor and council ignored a request for a 2-week delay made by the lawyer representing Geneva citizens because the IHDA 2020 LIHTC gravy train was scheduled to leave the station before the two weeks would be up.

Remember, during its February 2020 clandestine meetings, the Council did not discuss purchasing or leasing land “for the use of the public body.” These fraudulent sessions were discovered through a FOIA to the Illinois Housing Development Authority, and the sessions leaked approval provided the grease needed to slide through a badly tainted application for millions of public dollars.

The mayor stated on July 13, 2020 (see link to video below): “At no time did any council members, myself, or staff communicate with the Burton Foundation as to what’s the landscape looked like, what the prospects were of either passage or failure.” The truth is that the City Council approved the Emma’s Landing Project and a “full donation” of land and waived fees several months prior and informed Burton of this fact on 25 February 2020. The mayor’s boorish performance on July 13th attests to the validity of the adage “Truth welcomes questions, a lie attacks the questioner.”

The Geneva City Council must immediately explain its violations of the Open Meetings Act and release any other improper secret deliberations, communications, and negotiations that took place. An honorable group would institute measures to reverse its prior misconduct.

The mayor is on record in this video as polling the Council individually by phone, i.e., “Noah’s Arking” about these matters:

 (2171) City Council Meeting July 13, 2020 – City of Geneva, Illinois – YouTube 

This “Noah’s Ark” deceptive gambit may have been legal in Illinois (a state that is hardly the paragon of moral political behavior), but it was not ethical or consistent with transparency. “In order that the people shall be informed, the General Assembly finds and declares that it is the intent of this Act to ensure that the actions of public bodies be taken openly and that their deliberations be conducted openly.” (5 ILCS 120/1)(from Ch. 102, par. 41). Did each alderperson receive the same information during the ten private one-on-one conversations? Did each benefit from the answers to the other’s questions? How can a body “deliberate” when each member is isolated individually in a soundproof booth? Where are the transcripts from these individualized arm-twisting sessions?

The “Good news” described in the second document is bad news for existing Geneva households with below-average incomes living in homes whose property tax bills will go up on the “news.” These Geneva families will subsidize affordable housing costing much more than their own homes. The Emma’s Landing LIHTC homes are subject to minimalized tax bills that are paid through their artificially low rents. Emma’s wealthy investor-owners will be taxed by a completely different mechanism (A more detailed summary of all property tax provisions in HB 2621 is available here. The legislative language in HB 2621 [Public Act 102-0175] provides additional details.) that lowers the local school tax bill by 35%%. Taxing current non-subsidized lower-income families, including seniors, out of Geneva in order to bring new families in is also a fundamental principle of The Geneva Way.

The Geneva City Council owes the taxpayers of the Batavia Highlands and Mill Creek and all other taxpayers who live in Geneva School District 304 but outside the City an explanation as to why the City of Geneva defrauded them by increasing their school tax liability. City of Geneva residents must demand an immediate explanation of how and why improper non-disclosure of identity of interest by the developer and contractor, fake documents, unauthorized administrative approvals of contracts, and multiple Open Meeting Act and FOIA violations are allowed to remain entrenched in The Geneva Way.

March 2022

City Council Ready to Double Down on Fake Certificate of Ownership of Emma’s Landing

The motto of the current Geneva City Council Zoning Police: “Badges? We don’t need no stinkin’ badges.”

The City of Geneva is an Illinois municipality governed by an elected City Council. The mayor, the creator of the “Geneva Way,” is little more than a parliamentarian (and a poor one at that). The Council has abrogated its responsibility and has let the long-entrenched twenty-year+ mayor and his hand-selected city staff usurp its agenda. The Council gets both its information and its political agenda from the mayor.

The Council has limited powers defined by the State of Illinois based on the Illinois Constitution and enumerated State Statutes (65 ILCS 5/) Illinois Municipal Code. Among these Council powers is a duty to act in a quasi-judicial role in certain zoning matters. (The distinction between quasi-judicial administrative and legislative function seems to have baffled the Illinois legal community, much like when Supreme Court Justice Roberts conflated “penalty” and “tax” in the Obama Care case).

NOT among the Council’s powers is the right to apply to itself for a Special Use Permit (i.e., PUD) as the owner/developer of the Emma’s parcel in question. The creation of a special use for a municipally owned parcel when said use does not directly address certain specific needs of the citizens at large is not a power delegated to municipalities. Fire stations, water treatment facilities, storage for streets and sanitation equipment, police stations, and even Council meeting rooms, etc., are public uses. In the case of Emma’s Landing, the City Council’s lawful role in the PUD application was to weigh the application’s effects on all Genevans carefully and impartially by applying the standards contained in the Geneva Municipal Code.

Who may bring an application for a PUD? The Geneva Code is precise and succinct: 

  • 11-9-3: – INITIATION: The owner of the property for which a planned unit development is sought may initiate a request for a special use planned unit development. (Ord. 95-28, 5-1-1995)
  • The 10 members of the Geneva City Council were never the “owner” when the PUD application was considered. The legal entity known as “City of Geneva” was the owner. Obviously, the Council recognized the dilemma it created for itself. The proper sequence would have been to first sell via an arm’s length negotiation the City-owned parcel 12 08 200 073 to a private entity. Then the Council could proceed with the required process for approving or disapproving a planned unit development as submitted by the new owner. But Council did not follow the requirements of the Geneva Municipal Code. Rather, to “facilitate” and, crucially, to accelerate building a path to large sums of public money for a specific non-resident married couple, Council committed fraud. Council used Joy Nelson to act as the straw-owner of the parcel 12 08 200 073 that was really owned by the City. I use the Joy Nelson name for the first time here because it appears on p32 of Council’s published agenda for its March 7, 2022, meeting. I have no knowledge or belief that Joy Nelson purposely participated in Council’s unlawful scheme.
  • The IHDA Qualified Allocation Plan contains deadlines. The Geneva City Council was so anxious to signal its collective virtue that it abandoned virtue altogether. Under the cover of a public health crisis, Council looked for an express gravy train. Council did not want its favored LIHTC collaborators to miss that public money gravy train. Here in Madiganistan you do not need a ticket to ride. But if you know the right people, your boarding pass is a wink and a nod. Geneva City Council has dug itself into a deep ethical hole. Council should first stop digging. Then it should table Emma’s Special Service Area and reconsider its past improper actions. 
  • Here is the problem for current Geneva lower income households (the ones whose Emma induced property tax increases will affect the most): The Illinois Courts provide no meaningful judicial checks or balances to restrain the Geneva zoning police that are accessible to those who may be most harmed by the municipality’s abuse of its zoning police powers. Here is an Illinois Appellate Court ruling in a zoning matter (Hanlon v Clarenden Hills 2016 IL App (2d) 151233-U No. 2-15-1233).

The Village was not required to comply with the procedures set forth in its ordinances where the procedures were self-imposed and not required under State statutes; thus, the dismissal of plaintiffs’ claim that the preliminary PUD plan approval had lapsed and the judgment following trial that the Village either had followed or did not need to follow its own procedures was not erroneous. The Village’s grant of preliminary PUD approval was not unreasonable and arbitrary.”

That’s right, local zoning ordinance rules are very often optional even when the rule says something must occur or must be prohibited. A Geneva victim of zoning police brutality would need to spend about $100,000 to get her protest to the Illinois Supreme Court where Judge Ann Burke sits as Chief Judge. She is the wife of “Slow Eddy” Burke, currently under Federal indictment.

The Geneva City Council clearly has been schooled in this “Hanlon Principle,” and they all know that a Geneva zoning police brutality victim has only her own thin wallet. The City Council can dip into every Geneva taxpayer’s wallet (including the victim’s) for its legal fees and individually the alderpersons enjoy sovereign immunity (but with important exceptions). Local circuit courts very rarely overturn an action of a city council. (This may be influenced by the fact that all local elected officials, elected circuit judges included, have their snouts in the same public trough.) Occasionally an appellate court will rule in an objector’s favor. (Always remember Walter Stackman, one of Geneva’s forgotten heroes.) But a victim really must plan for a path that leads to the Illinois Supreme Court. In Illinois, a citizen can have all the justice she can afford.

Does the “Hanlon” decision cited above comply with the following? “A special use [PUD] shall be permitted only upon evidence that such use meets standards established for such classification in the ordinances, and the granting of permission therefore may be subject to conditions reasonably necessary to meet such standards.” (65 ILCS 5/11-13-1.1)(from Ch. 24, par. 11-13-1.1) “Conditions to meet” does not mean “deviations from” or totally ignoring “such standards.”

Obviously, the faked ownership document contained in Emma’s Landing PUD application does not comply with the City of Geneva Ordinance that defines who (i.e, “the owner”) may apply for a PUD.

The Geneva City Council’s perpetual first question is always “Will we get away with this?” The roots of this mindset lie in the pungent muck of despotism, the Putin-esque “democratic” doctrine.

Rodney B. Nelson, M.D., F.A.C.P.; Former Major, USAF

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February 2022

GENEVA HAS A CHARACTER FLAW: DISHONESTY

Fellow Genevans,

We Genevans have a fundamental problem at City Hall that is graver than any specific issue. The problem is an ethical one, not a political one.

Consider these facts about Emma’s Landing Affordable Housing project in Geneva: 1) Identity of interest creates a pathway for fraud in LIHTC housing projects; 2) The president of Emma’s developer (Burton Foundation) is the wife of a principal of the general contractor (Door Creek Construction); 3) Construction cost exaggeration is a common technique employed in LIHTC fraud; 4) When identity of interest exists a totally disinterested and independent person must perform the cost of construction estimate. See: GAO-18-637 Highlights, LOW-INCOME HOUSING TAX CREDIT: Improved Data and Oversight Would Strengthen Cost Assessment and Fraud Risk Management

Consider that Geneva Ordinance 2021-03: AN ORDINANCE (1) AMENDING THE CITY’S COMPREHENSIVE PLAN TO CHANGE THE LAND USE DESIGNATION OF THE SUBJECT REALTY FROM “OPEN SPACE” TO “SINGLE-FAMILY ATTACHED” RESIDENTIAL; (2) GRANTING PRELIMINARY /FINAL PLAT OF SUBDIVISION APPROVAL; AND (3) GRANTING FINAL PLANNED UNIT DEVELOPMENT PLAN APPROVAL TO ALLOW FOR THE CONSTRUCTION OF EMMA’S LANDING, A 45-UNIT AFFORDABLE RENTAL TOWNHOME DEVELOPMENT- THE BURTON FOUNDATION. Geneva Ordinance 2021-03 contains a fraudulent required document. The Final Plat of Subdivision is recorded and contained in the ordinance but with a fraudulent certificate of ownership (vide infra).

Consider that the Emma’s Landing Purchase Agreement, paragraph 2.03(ii) Governmental Contingency Period was altered for the benefit of the purchaser but without action by the City Council. The City Administrator made this alteration without authority. Consider that the motivation for this was to fraudulently facilitate and accelerate the application for LIHTC funds from IHDA. That process contains deadlines.

Consider that a citizen FOIA request for documents related to changes in paragraph 2.03(ii) was denied by City of Geneva based on the secret executive session exemption long after the Purchase Agreement had been signed by both parties. The negotiations were over. The need for secrecy was over. The “only” document authorizing the change in the agreement exists in at least three forms: unsigned, signed but not dated (see agenda packet for June 7th, 2021, meeting of City Council), and, in response to a recent 2022 FOIA, signed and dated January 20, 2021. Obviously, the date was belatedly and improperly added after June 7, 2021. 

In the Illinois Housing Development Authority LIHTC funding cycle of 2020 forty-four applications were received. Twenty-two were allocated millions of dollars in Low Income Housing Tax Credits and twenty-two were awarded nothing. Geneva, one of the 22 “winners,” cheated by gaming the application timing process. City of Geneva did this by creating fake and fraudulent documents, and by failing to disclose, as required, an identity of interest within the participants (one of whom being a schoolmate of the mayor).

Ironically, Emma’s general contractor/cost-estimator is the son of a former Geneva Alderman. This alderman also had been a City of Geneva employee (Electric Department Superintendent) who had been fired by a former Geneva mayor. The dispute was over (get this!) the choice between WEPCO and Com ED as Geneva’s electricity provider. The resolution of the wrongful firing lawsuit took a long time. Mayor Lewis prevailed, but it took six years for him to collect from the taxpayers the $70K he spent on legal fees. (The City of Geneva spent $40K.) What was the hold-up on the mayor’s money? The Geneva City Council was the hold-up. see: GENEVA EX-MAYOR TO BE REIMBURSED IN LAWSUIT FIGHT – Chicago Tribune

Are we really the sort of town that puts winning above sportsmanship in competition? Have we descended so far down into the political cesspool that winning at any cost, including committing fraud, is acceptable here? 

Rod Nelson

Crucial Emma’s Landing Document, the Final Plat of the Planned Unit Development, is fraudulent.

The largest Federal affordable housing subsidy is the Reagan-era LIHTC Program. The concept is simple. The application is a byzantine maze of bureaucratic twists and turns. This creates an almost impenetrable fog that can and has obscured significant fraud. In practice, the usual approach is to form an ostensibly charitable tax-exempt 501c3 “foundation.” This “developer” is a not-for-profit that invests negligible capital but can collect substantial fees from which large salaries can be paid. Then a cascade of LLCs is formed including the one where Federal Income Tax credits flow, usually to affluent corporate investors, often banks. “LIHTC” housing is also termed “Section 42” housing, as this is the applicable IRS regulation.

To keep this commentary contemporary, I looked to P.J. O’Rourke (who just died at about my age) for advice. In the Wall Street Journal of 23 September 1993, he described the Clinton Health Plan. I quote P.J. here verbatim except I substituted “LIHTC Housing Plan.”

P.J. O’Rourke WSJ 23 Sept 1993:

“But my ignorance of the LIHTC Housing Plan is of little import. Understanding government programs is like looking at photographers’ models or being run over by trucks. Form is more important than content. The bare outline of the plan is so thick, detailed specifics to come, that you can stand on it to paint the ceiling. In my copy of the World Almanac, the U.S. Constitution and the Bill of Rights occupy 4½ pages. That’s 4½ pages to run an entire country for more than 200 years and half a ream of federal regulations if I slam my thumb in the car door.”

Many questions can be raised about how the City of Geneva, the Illinois Housing Development Authority, HUD, and the IRS have handled Emma’s Landing successful application for tax credits. Here the focus is on the smoke and mirrors obscuring “City of Geneva Ordinance 2021-03, an Ordinance amending the City’s Comprehensive Plan, granting preliminary/final plat of subdivision approval, and granting final planned unit development approval related to Emma’s Landing.”

The “Planned Unit Development,” (“PUD”), a form of special use, was improperly granted by the City of Geneva to itself, the City of Geneva. An “owner/applicant’s signature” appears on the document and is notarized, just below this appears the mayor’s signature along with that of the city clerk. But the “straw owner” never owned Emma’s Landing property parcel 12-08-200-073. That parcel was sold by the City at a price far below market value to the developer, the Burton Foundation, after the PUD was awarded by the City to itself. Thus, the City-owned the property when it passed Ordinance 2021-03 and Burton did not possess the required PUD document. The alleged and duly recorded “owner” of the PUD was a recently widowed surrogate who quite possibly was bamboozled into signing the document recorded as the “Plat of the PUD” that is officially incorporated into Ordinance 2021-03.

I have repeatedly asked all the aldermen and many staff members within the City of Geneva hierarchy to explain how Ordinance 2021-03 can be valid since it contains a fraudulent misrepresentation of ownership…. all the members of cricket’s choir are still humming the same shameful song.

You can find the Kane County Recorder’s PUD, Ordinance 2021-03 and Deed Transfer documents for parcel 12-08-200-073 (Emma’s Landing) here: (enter the parcel number)

https://lrs.kanecountyrecorder.net/Search/Advanced?previous=True

A Law Dictionary defines fraud thusly, “Fraud consists of some deceitful practice or willful device, resorted to with intent to deprive another of his right, or in some manner to do him an injury.” I believe, given Geneva’s particular characteristics that pertain to the tax burden on its residents, that lower income current residents, often including seniors, will be particularly harmed by the subsidies they will be forced to provide for Emma’s Landing. Property tax is a particularly regressive tax that disproportionately affects lower income households.

Ordinance 2021-03 is a willful and deceitful device invented to unlawfully advance a public policy. If you happen to be a Geneva resident and have stumbled upon this essay, please ask your aldermen to explain the signature in the Ordinance that misrepresents the ownership of the Emma’s Landing property. If you get such an explanation, please let me know!

Rod Nelson

ps: Some further background is provided below. Many other “irregularities” pervade the LIHTC application.

https://www.geneva.il.us/AgendaCenter/ViewFile/Agenda/_07062021-1788 This link will take you to the Agenda Packet for the July 6th 2021 Meeting of the Geneva City Council. See pages 8-11 which include the signed PUD Plat. The Mayor and City Clerk represent that they signed the document on February 22, 2021 as “accepted and approved.” The Plat was “Made For The Burton Foundation.” Did the document even exist on 22 Feb 2021? If it did, the mayor and clerk were the first to sign (two months before the “owner”) and before the surveyor certified the plat was accurate and that no surface water problem would be created. The Final Plat of Emma’s Landing was certified by the Kane County Recorder on April 28th, 2021. Even the invalid 60-day extension had expired in March. The Final Plat that the City approved was not granted to Burton and it was not timely recorded.

Below the reader will find a letter dated January 15, 2021, from Burton Foundation to “City of Geneva, Attn: Ms. Stephanie K. Dawkins, City Administrator”. The letter is annotated as “accepted and agreed” by the City Administrator for a requested 60-day extension of the 180-day Governmental Contingency. This 60-day extension expired on March 19th, 2021. Given the controversy and intense public interest surrounding this issue and considering the provisions of the Illinois Municipal Code 65 ILCS 5, the contents of this letter are disturbing. Only the City Council is empowered to pass, repeal, or amend any act of the Council. I cannot find any evidence that an amendment to extend the Contingency Period was ever considered, much less passed in an open session. The “deal” for “that property” described in the below letter expired on January 18th, 2021. The 60-day extension was not authorized by the City Council, the only entity with authority to amend the original agreement.

https://justthenews.com/accountability/watchdogs/sunlax-irs-oversight-leads-over-15b-questionable-low-income-housing-tax

Lax IRS oversight leads to over $15B in questionable low-income housing tax credit claims. Just-the-News awarded last week’s Golden Horseshoe to the IRS for a lack of oversight that led to $15.6 billion in questionable Low-Income Housing Tax Credits (LIHTC) on more than 68,000 claims, according to an audit report by the Treasury Inspector General for Tax Administration (TIGTA). The above link describes the deplorable situation and contains a link to the TIGTA report. The LIHTC program has so many Illinois and Federal governmental agencies involved that the program escapes virtually all oversight from any level, starting with the City of Geneva.

An Open Letter to a Geneva Mayor and an Alderman about Municipal Insurrections

Dear Mayor Hiram McChesney and Alderman Francis H. Blackman: [I have addressed this to Geneva historical characters of high moral standing in keeping with Forrest Crissey’s tradition established in his Tattlings of a Retired Politician, Thompson and Thomas, Chicago. 1904. But this letter is not fiction.]

I call your attention to the Emma’s Planned Unit Development and the Reverter clause in the Emma’s Landing Purchase Agreement.

First, The Burton Foundation is required to satisfy all of the conditions under provisions of Title 11, Chapter 9 and Chapter 16 of the Geneva City Code and receive approval of a final planned unit development (PUD) plan and plat for an affordable housing project compatible with the R-7 Residential District and the Sterling Manor Planned Unit Development (Ordinances 1991-30 and 2013-13) prior to the land ownership being transferred to the Burton Foundation. The proposed development required Annexation, a Comprehensive Plan Amendment, Preliminary and Final Plat of Subdivision Approval, and Final Planned Unit Development Plan Approval.

Burton never received approval of the PUD plat. The PUD plat is a fraud – I cannot think of a kinder word to describe it, though many cruder terms come to mind. If it were an honest mistake, the Mayor and City Council knew about it since at least June 7th, 2021, when I described it during public comment on the “Reverter.” They have not acknowledged any mistake – too late now. Premeditation must be assumed.

Second is the “Reverter.” Sorry to say, I do not think a single member of the Council understood the reverter. In addition, the agenda packet about the reverter contained a slipped-in a copy of the letter from Burton to Dawkins asking for and receiving a 60-day extension of the “Governmental Contingency” period included in the purchase agreement between City and Burton. This unauthorized extension had nothing directly to do with the reverter. Dawkins, on her own “authority,” agreed to the 60-day extension, apparently by email on Jan 15th, 2021, the day she received the request. I raised this on June 7th, 2021, and the mayor sanctimoniously called me a liar and off-topic. THE 60 DAY CONTINGENCY EXTENSION LETTER WAS IN THE REVERTER PACKET – the issue under discussion! The city made it part of the topic by raising it.

The City Council essentially put a gun to its own head (and to the heads of all Genevan’s objecting to Emma’s folly) by extending the reverter. The fundamental question Cui Bono? should have been asked. Burton requested the last-minute reverter extension!!! The fairy tale invented by Burns, Sandack, and Dawkins about taxpayer protection from the big bad wolf puts Mother Goose to shame. The reverter expired when Burton put the first shovel into the ground. AND, the reverter required the Council to grant all the permits before the expiration date under the threat that Burton gets all its money back and walks, leaving Geneva looking like the dunce it often plays on Youtube TV. Today, if Burton walks away from Emma’s house of sticks, where is the brick house reverter protecting the taxpayers?

The various States treat reverter clauses in LIHTC differently. Missouri prohibits them completely. Virginia allows them but only when they require the property be returned (reverted to seller/donor) if the land-use changes from affordable housing to anything else. Illinois, as usual, comes up empty. Historically, the first “reverters” caused land donated to Churches to revert to the donor when the Church goes out of existence.

Stockholm’s Syndrome is endemic at City Hall. This chronic affliction takes hold when the keeper of the participation gate lacks a moral compass. Statutes and Ordinances are cherry-picked to be enforced or ignored to fit an agenda. Something even more sinister is invoked when even this fails: the usurpation of the rule of law by issuing unlawful decrees such as the Emma’s PUD, sworn loyalty oaths be damned. Vigilantes acting unlawfully under the guise of elected or appointed office are insurrectionists, not public servants.

A small-town City Council sitting down with “Iceberg” Bergman (Mannings’ mentor) for a game of LIHTC is more tragedy than comedy for the taxpaying ticket buyers. You would have had a slight chance playing three-dimensional chess with Bobby Fischer, but he died in 2008.  I reflect on Burns’ June 7th comment to a hearing attendee about herding cats. A decent City Council needs a cat or two to counterbalance the flock of sheep.

Best,

Rod “The Wraith” Nelson

ps: Everyone looked at me on June 7th (figuratively, I was remote AND wearing a mask though not because of Covid) like I had three eyes when I described the reverter as a “free put option gifted to Burton.” But I did not invent the concept. You can bet Iceberg and P. Quigley, Esq., know such “risk-mitigating” “puts” like the backs of their hands.

See: “Review Part 4: Direct and Indirect Gifts of Real Estate

There are various options for accepting other than a binary yes or no—transfer of ownership is not the only way to complete the gift. A small but not insignificant proportion of nonprofits utilize a supporting organization to receive the property. They can also employ more complex, risk-reducing legal strategies, such as creating a put option, utilizing an agent, or working through an LLC. 

Finally, the nonprofit can outsource the gift to another public charity that will liquidate the real estate within a donor-advised fund.” book.pdf (charitablesolutionsllc.com)

Was Identity of Interest improperly bypassed to get the Emma’s Landing LIHTC Funds?

The Emma’s Landing sponsor, owner, and developer is The Burton Foundation. Tracey Manning Fellhauer is the President of Burton Foundation. (99+) Tracey Manning | LinkedIn Door Creek Construction is the General Contractor for Emma’s Landing. Brian Fellhauer is Tracey’s husband and is an officer of Door Creek Construction. Bryan Fellhauer Phone Number, Address, Public Records | Radaris Disclosure of Identity of Interest is required by HUD and IHDA to qualify for LIHTC funds. Emma’s Landing requested LIHTC funds and certified that no Identity of Interest existed among participants. Fraud in LIHTC frequently occurs during the construction cost estimation phase when padded estimates increase developer fees and general contractor profits.

Based on information that is available in the public domain I conclude that the safeguards built into the IHDA Qualified Allocation Plan were deliberately bypassed and ignored by City of Geneva and IHDA. No one from either agency has been willing to discuss this concern. I am not the only citizen who has raised this apparent impropriety. Even the appearance of governmental impropriety undermines trust. In this case that appearance is crystal-clear.

“Identity of Interest” shall mean the existence of any of the following conditions:

– When one or more of the officers, directors, stockholders, members, or partners of the Owner is also an officer, director, stockholder, member, or partner of any other Participant;

– When any officer, director, stockholder, member or partner of the Owner has any financial interest whatsoever in any other Participant. P7 IHDA 2020-2021 QAP

In cases where there is an Identity of Interest between a Sponsor and Project general contractor; between a Sponsor and the Project architect; or between the Project architect and Project general contractor; the Construction Cost Breakdown must be completed by an independent third-party construction cost estimation firm according to the Authority’s Standards for Construction Cost Estimating available on the Website. see: P51 IHDA 2020-2021 QAP