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The Lodge on Willow, a luxury student apartment building at 214 W. Willow St. in Normal, is one of 85 properties involved in a property tax settlement between local taxing bodies and properties associated with management group Young America Realty.

NORMAL — Local taxing bodies have reached another property tax deal for apartments near Illinois State University — and this one is much broader than the first.

McLean County Unit 5's school board signed off Wednesday night on a settlement covering 85 properties associated with management company Young America Realty that will end costly litigation over their taxable values but will cost local governments some property tax payments they otherwise would have received.

The taxing bodies, including Unit 5, the town of Normal, McLean County and Heartland Community College, will gain about $1 million over the seven-year deal, but they gave up about $950,000 in additional taxes they would have received if a state appeal board had confirmed recently increased assessments on the properties.

Heartland's board has agreed to the settlement, but has not officially approved it. The Normal City Council is expected to approve the deal next month. 

The deal mirrors one recently approved by Unit 5, Normal and Heartland for 26 properties associated with First Site, another management company. Under that deal, taxing bodies will receive $1.4 million more, but they gave up the opportunity to pursue another $280,000 in property taxes.

Both deals are the result of owners pushing back on increased assessments in 2015, triggering disputes that moved from the county's Board of Review to the state's Property Tax Appeal Board; both set taxable values for the properties from 2015 to 2022.

Both deals involved a compromise over the value of properties whose assessments were challenged, as well as slight increases in the values of other properties likely to be reassessed at much higher values in the future. Unit 5 attorney Curt Richardson said both were necessary to reach any deal.

The deals differ in conditions that could void them. They have similar conditions related to the properties' square footage and enrollment at local colleges and universities, but the Young America deal lacks a provision in the First Site agreement that would void the deal if employment at State Farm significantly drops.

“Nothing else is currently in the works” in regards to other apartment settlements, said Richardson.

“It puts the taxing bodies and school district in a good position. This was not agreeing to a reduction, this was protecting our tax base,” he said.

Unit 5 receives 58 percent of the tax money from the properties; the town, 11 percent; the county, 11 percent; Heartland, 8 percent; Normal Public Library, 5 percent; Normal Township, 3 percent; Bloomington-Normal Water Reclamation District, 2 percent; Bloomington-Normal Airport Authority, 1 percent; and Normal Township Road District, 1 percent.

Critics have challenged whether it is advisable for taxing bodies to enter such deals, which guarantee revenue and end legal fights over assessments but diminish their property tax base and ability to provide services.

"First Site has amassed enough wealth that they can afford punitive litigation that benefits its owners at the expense of every other resident in Normal," said resident Joel Studebaker at a recent Normal City Council meeting. "What comes next? If we cannot afford to win this battle, what other battles can we only afford to lose?"

Julia Evelsizer contributed to this report.

Follow Derek Beigh on Twitter: @pg_beigh

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Normal and McLean County Reporter

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