City, Town Dispute Over Tax Zone 'Erodes Trust'

A water tower visible from Interstate 55, signaling for many that they're approaching the twin-city community.
Credit Ralph Weisheit

Bloomington and Normal are headed for a showdown over a 30 year old agreement that shares tax revenue from the west side of town.

Bloomington Mayor Tari Renner says the city council will consider a resolution next week to terminate the Metro Zone agreement. That's something Mayor Chris Koos of Normal says can't be done unilaterally.

"The agreement says it can be terminated by mutual agreement of the parties. We're at the table to discuss that right now," said Koos.

The council signaled during an executive session Monday night to move forward with dissolving the sales tax, property tax, infrastructure, and service cost sharing zone. The pact came about in 1986 to give both municipalities an incentive to improve the west side of Town as part of the arrival of the Mitsubishi plant. Both cities made infrastructure investments.

The reason given for the executive session of the Bloomington Council Monday evening to talk about the issue was "pending or probable" litigation.  There is no current court case.

"While the Mayor is hopeful the dispute involving the Metro Zone will not end in litigation, the city is fully cognizant of the claims made by Normal and the differing legal interpretations," said Jeff Jurgens, the city's attorney. "No one can predict the future, but the City Council is optimistic the Town will accept its invitation in the resolution to meet and begin discussing other ways to collaboratively work together on new regional economic development initiatives and that talk or concern of litigation will quickly subside."

Renner said he doubts there will be a lawsuit.

"I don't think it helps anybody to go into litigation. And second, I think they are probably getting the same advice we are getting. There is no agreement that is perpetual. Under Illinois law, either side can terminate," said Renner.

"Going forward, the trust between the two municipalities is going to be critical and this has certainly eroded that trust,"said Koos.

The Mitsubishi auto manufacturing plant, now owned by Rivian Automotive, helped to spur the creation of the Metro Zone in 1986.
Credit Ralph Weisheit

Renner said for the first decade of the pact, Bloomington benefited disproportionately from the agreement. For some years after that revenues roughly balanced. But, in the last decade, Renner said, Bloomington has been sending more to Normal, including about a $1.2 million last year because of the healthy sales tax receipts from the west side Walmart and other retailers.

Koos pointed out Normal agreed to abate taxes on that store for the good of the community even though the town knew sales tax receipts from the east side Walmart would drop by about 15 percent as a result.

Renner said, over the history of the Metro Zone, Bloomington has sent to Normal about $12 million and Normal has sent to Bloomington about $5 million.

"So there is clearly an inequity in this agreement. And that, I think is what the council is responding to," said Renner.

Koos resisted that comparison. Koos pointed out both parties split the cost of infrastructure improvements 50-50. The City of Bloomington approached Normal about support for the Walmart under the Metro Zone agreement, Koos said. And Normal City Manager Mark Peterson said the agreement also divides the cost of services such as police and fire protection.

Renner maintained the agreement is no longer in the best interests of Bloomington taxpayers.

"Both parties have been made whole 20 years ago in terms of their investment. So, It's not like anybody is really out any of their initial investment," said Renner.

Normal town council member Kevin McCarthy compared the arrangement to a business partnership.

"From our perspective there is no inequity. We both invested equally. We both received revenue equally," said McCarthy.

Koos said the town has tried to have a conversation about the agreement and had been stiffed.

"We're not looking at the Metro Zone agreement in black and white. We're not saying it either stays or goes away. That's not our position. Our position is we want to talk to the city of Bloomington and see if there is anything salvageable in the agreement, if it's amendable and if it needs to change. If it needs to go away how does it go away? How do we come out of it ok? How do they come out of it ok? That's the discussion we're trying to have," said Koos.

Renner said the issue has been a topic for several years and talks have been going on for four or five months. Koos disputed that saying that there is a history of sporadic contact on the topic between City Managers Mark Peterson and David Hales and that actual discussions have been much more recent.

"We've been talking about it since December," said Koos.

Kevin McCarthy was part of a small team from Normal that met twice with like representatives from Bloomington.

"We had a business partnership on investment and revenue, a joint investment in an area. One partner says they're not happy with how the investment is going. And we try to have a conversation about how we update the partnership. And you don't even get to have that discussion. We have a talk about how to have that discussion and then one side says 'nope, we're just going to dissolve it. And p.s., we're going to take all the assets,'" said McCarthy.

Alderman Amelia Buragas was on the Bloomington team that held discussions with the town.  Buragas declined comment.

Renner characterized the talks as involving several proposed compromises on both sides and said the cities were not able to reach common ground.

"I want to make it clear that the Bloomington city council is not acting rashly or quickly. In fact there were many that were concerned that we were dragging our feet on this," said Renner.

Koos said, at the last meeting of the working groups, there was a common agreement that they would continue to move forward and keep talking about this. After that, Normal representatives contend, Bloomington went silent.

Koos said the agreement is "one of the most enduring and successful" in the history of the two municipalities.

Renner had a different take.

"If you look out there, at this point anybody can see that the type of development or economic growth that we thought might happen has not really happened or has been uneven at best," said Renner.

Normal City Manager Mark Peterson noted the entire community has had little growth in commercial and manufacturing development over the last decade as have many communities around the nation.

Renner said the Town has spent most of the last decade focused on Uptown.

Mayor Koos had a rejoinder: "And most of his focus has been on downtown Bloomington." 

City Manager Mark Peterson of Normal disagreed with Renner's premise.

"I would first of all dispute that. Look what we have done in support of Mitsubishi. The Town has been very active and aggressive in supporting Mitsubishi. Unfortunately, the plant was not successful at the end of the day. And then we participated in a very robust community effort to try to attract a replacement that was successful," said Peterson.

Renner also discounted the potential impact on the Metro Zone agreement of the Rivian automotive project. He said he doubted it would prove to be significant.

At the time of the Rivian announcement, the City of Bloomington declined to participate in incentives, even though the plant is within the Metro Zone.

Koos acknowledged the impact of Rivian is unproven but holds out hope it could be significant.

Renner said he hopes a new and better agreements can be crafted that will help develop the community and be consistent with the BN Advantage initiative.

"Well, the BN Advantage is essentially looking at trying to make sure that we have the best trained workforce in downstate; that we are attracting IT jobs. There is any number of things that BN Advantage might work for," said Renner.

Renner acknowledged the Metro Zone issue has made the relationship between the two cities difficult. He said it is just one of those things that they have to agree to disagree on and move forward because obviously neither entity is going anywhere.

"I think that there is some strain and I think that some of that is because of some misunderstandings over this and some other issues. We're going to work together. We have dozens and dozens and dozens of intergovernmental disagreements on police and fire. We work together all the time. And so obviously we will get past this and we will move forward and we will have some sort of BN Advantage agreement to promote the economic development of the entire community moving forward," said Renner.

The City of Bloomington news release on the topic cites a resolution calling for a new process of joint collaboration.

Renner explained what is meant by that.

"I would like at some point in the very near future to maybe get a fifth Monday where we get the nine members of the city council with myself as Mayor and the seven members of the Normal Town Council together in the same room in an open public forum and begin to talk about what the next phases might be," said Renner.

Even after expressing distress at the development, Mayor Koos tried to make nice.

"We've heard from the city of Bloomington that they're interested in new agreements, whether it's Metro Zone whether it's other things in the community, but collaborative agreements. And we would like to pursue that as well," said Koos.

The Metro Zone is a sector based approach to economic development. Mayor Renner said the twin cities needs to come together in a fresh approach for something that is community based not sector based.

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