Loves Park City Council members have approved a pay-as-you-go redevelopment deal with the developers of the Rockford Speedway. (Photo by Kevin Haas/Rock River Current)
    By Kevin Haas
    Rock River Current
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    LOVES PARK — City Council members have approved a pay-as-you-go incentive package that could provide developers of the Rockford Speedway with millions of dollars if their transformation of the 76-year-old racetrack is successful.

    The agreement approved this week with HJS Development provides the developers with 70% of the revenue generated from two special taxing districts surrounding the Speedway for a period of 17 years that starts as each lot is developed.

    The deal could be worth a maximum of $6.9 million over the 23-year life of the taxing districts. However, that amount could increase an additional $2.2 million if Contractors Drive just south of the track is rebuilt. There is no upfront cost to the city because the amounts are paid incrementally as the taxing districts generate revenue.

    “This is only money that is created as a result of their development,” said Attorney Gino Galluzzo of AGHL Law, which represents the city. “They’re limited on the number of years and their own success and what businesses are going to generate in sales tax.”

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    The incentives provide critical funding for building public roads, utilities, stormwater management and other infrastructure, as well as the demolition of the Speedway and Forest Hills Lodge, and the filling of a quarry west of the racetrack.

    The city gains new tax revenue, too, both from its share of the money from the special taxing districts and from the additional business activity that will generate revenue for its other sales taxes, such as the 1% road tax.

    “This is really a great structure because it aligns the developers’ interest with the long-term term financial future of Loves Park,” said T. Ryan Fitzgerald, partner for Shorewood Development, which manages HJS Development. “They are incentivizing us to invest, build and attract retailers that generate sales tax, which is the lifeblood of their community.”

    How it works

    The money comes from taxes generated from a business development district, which levies an additional 1% sales tax on purchases within the area.

    The total sales tax rate inside the district would be 9.75%, instead of the 8.75% rate they pay elsewhere in the city.

    That area is also part of a newly created tax-increment finance district, where increases in property taxes that come after improvements are made and property values increase are captured into a special fund.

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    The district covers about 278 acres of land that includes the Rockford Speedway and surrounding territory. It is generally bounded by Kimber Drive to the west, Forest Hills Road to the east, an east-west line north of residences near Painted Pony Lane to the south and Illinois 173 to the north.

    Loves Park City Council members approved these tax-increment finance district boundaries last year for land around the Rockford Speedway. (Image via city of Loves Park)

    The 70% that’s paid back to developers drops to 45% if the majority of the businesses located on a lot are not expected to generate sales tax.

    With demand for retail down — a big box retailer like Walmart isn’t expected — it will be tough for the developers to earn the maximum amount, Galluzzo said.

    “Without developing something in the back, they’re likely not going to get to those numbers,” Galluzzo said.

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    However, both Galluzzo and Fitzgerald anticipate new shops and restaurants will quickly fill the lots along Illinois 173.

    “We think the front outlots are going to go very quickly,” Galluzzo said. “If you go up and down 173 there, there’s not a lot of empty outlots.”

    What’s next

    The redevelopment agreement states that demolition and quarry work must be completed by January 2028, but Fitzgerald said the frontage lots will develop much quicker.

    This image from the city of Loves Park shows the frontage lots that would develop first along Illinois 173. (Image via city of Loves Park)

    Fitzgerald said his group is working with the city and state to ensure a right-in, right-out turn lane is available on Illinois 173 east of Kimber Drive. That lane will be key to provide easy access to future businesses.

    The Deery family, which owns and operates the racetrack, announced in February that this would be the Speedway’s final season. Forest Hills Lodge will close in June and is expected to be torn down shortly after.

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    Fitzgerald said the goal is to start construction on the infrastructure in fall. Buildings could start to be erected in late fall or spring 2024. No tenants have been announced yet. Developers plan to pursue a mix of commercial businesses.

    “There is no plan to do residential at this time,” Fitzgerald said. “We are going to attempt to do commercial for a period of time. We do anticipate we may have to go after some residential in the future.”

    Galluzzo said the development will reap long-term benefits for the city. Offering incentive packages like this help it spur development and more sales taxes, which the city relies on to fund its operations and services such as police and fire.

    “The city is going to have millions of new income coming in that will continue to help subsidize its services it gives to the residents,” Galluzzo said. “That way it can continue to provide those services without levying any property tax.”


    This article is by Kevin Haas. Email him at khaas@rockrivercurrent.com or follow him on Twitter at @KevinMHaas or Instagram @thekevinhaas.

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