Real Estate

Mellody Farm's TIF Success: 77% Revenue Jump, Early Dissolve Plan

Mellody Farm's TIF success story: 77% revenue increase and potential early dissolution 14 years ahead of schedule.

By Doug Elli

4/4, 07:13 EDT
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Key Takeaway

  • Mellody Farm's TIF district in Vernon Hills may dissolve 14 years early due to a 77% annual revenue increase, outperforming projections.
  • The development, featuring high-end apartments and retailers like Whole Foods, has an appraised value of $46.6 million from a frozen $291,000.
  • This success contrasts with mixed outcomes of other local TIF districts, highlighting Mellody Farm's unique achievement in urban development.

A Model of TIF Success in Vernon Hills

Regency Centers' Mellody Farm development in Vernon Hills has emerged as a beacon of success in the use of tax increment financing (TIF) districts, showcasing a model that other municipalities might well aspire to. Nearly eight years ago, Vernon Hills officials embarked on a bold plan to stimulate development at a key intersection, leveraging a TIF district to attract high-end apartments, retail, and restaurants. The gamble has not only paid off but exceeded expectations, with Mayor Roger Byrne acknowledging the decision's significant positive impact. The Mellody Farm TIF district's performance has been so stellar that discussions are underway to dissolve it 14 years ahead of its scheduled termination, a testament to its success.

Surpassing Financial Expectations

The financial achievements of the Mellody Farm development are nothing short of remarkable. With an annual revenue increase of 77 percent, the TIF district has far outpaced initial projections. The stark contrast between the land's frozen assessed value at approximately $291,000 and its current appraised value of $46.6 million illustrates the development's monumental impact. This financial boon has been fueled by a $20 million reimbursement agreement with Regency Centers, transforming a 55-acre parcel into a vibrant mixed-use complex. The projections now indicate that the fund balance will exceed the outstanding debt by fiscal year 2026, highlighting the project's financial viability and success.

The Ingredients of Success

The triumph of Mellody Farm can be attributed to several key factors, including meticulous planning, upscale facilities, and a roster of high-profile tenants. The presence of notable brands such as Nordstrom Rack, REI, and HomeGoods, along with popular dining options, has played a crucial role in drawing visitors and residents alike. This success contrasts sharply with the mixed outcomes of other TIF districts in the area, underscoring the importance of strategic planning and execution in such development projects.

Implications for Future Development Projects

The success story of Mellody Farm offers valuable insights for municipalities and developers considering TIF districts as a tool for urban development. It highlights the potential for TIFs to significantly accelerate development and enhance property values when executed with precision and strategic foresight. Moreover, the early potential dissolution of the Mellody Farm TIF district serves as a compelling case study in achieving and surpassing development goals, setting a precedent for future projects.

Management Quotes

  • Roger Byrne, Mayor of Vernon Hills:

    "That was a good decision we made … to say the least."

  • Thomas Lyons, Vernon Hills finance director:

    "Revenue stemming from the Mellody Farm TIF has skyrocketed by 77 percent annually."

  • John Melaniphy, president of Melaniphy & Associates:

    "Mellody Farm’s success [is] due to meticulous attention to detail, upscale facilities and an array of high-profile tenants."