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Application of TIF in Illinois
- 1. The Application of Tax Increment Financing in Illinois An Overview 200 N. Broadway Suite 1000 St. Louis, MO 63102 (314) 231-7318 PGAV URBAN CONSULTING By Mike Weber, Director
- 4. PGAV
- 6. Sale Street Looking North - Existing Sale Street Looking North - Restored
- 9. How TIF Works (Graphic Illustration) PGAV URBAN CONSULTING
- 26. PGAV
- 27. PGAV
- 28. PGAV
- 30. PGAV
- 34. PGAV
Editor's Notes
- That would not otherwise occur…. Because of: Lack of public infrastructure or - Extraordinary redevelopment costs Or otherwise not financially justifiable (i.e.., rehabbing an old building)
- TIF is available to all municipalities in IL. The TIF Act was originally enacted in 1977. Since then, just over 900 TIF’s have been established in over 400 municipalities throughout the state. TIF is initiated and controlled locally… no federal or state approval required. TIF is an economic development tool designed to achieve 2 principle goals: Removal of blight or conditions that may lead to blight Ultimately enhance the tax base of all taxing bodies All taxing bodies forgo tax revenue increases for a period of time… but benefit from the increase when the TIF district is dissolved. When pursuing the establishment of a TIF district, there are 3 key findings that the municipality must make. Qualify Lack of growth and investment… area as a whole “ But-for” test.
- The concept of TIF is straight forward Once the District is established, the County Clerk will certify the base EAV of the District. Taxes on this base EAV continue to be distributed as before the TIF. After redevelopment projects are complete, the EAV goes up and thus the real property taxes. This increase is the “increment” The increment goes to a Special TIF Fund and is used to pay for certain eligible costs such as public infrastructure supporting the redevelopment project.
- This provides a simple illustration of the TIF over time… maximum life of 23 years.
- A vacant Wal-Mart in Sparta
- Vacant Wal-Mart Center before
- Wal-Mart site & adjacent properties redeveloped with TIF financing
- The new Sparta Center
- Setting up a TIF district: 1 st – Feasibility analysis… determine qualifications 2 nd – Redevelopment Plan… certain findings and other information must be provided per the TIF Act…. Evidence on lack of growth and investment… but for test… estimated redevelopment project costs, etc.
- Once the Plan has been prepared on file with the City: Various notices required… availability of the Plan and the Public Hearing JRB meeting is convened to review the Plan and make recommendation to the City Council or Village Board. JRB made up of most taxing districts. Public Hearing is held. Not sooner than 2 weeks after the public hearing, the ordinances approving the plan and establishing the district may be introduced. Then ongoing implementation… could be a single project or many throughout the TIF district. Annually, the City must report on the progress of the TIF program to the State Comptroller and provide a copy of the report to all taxing bodies (e.g., status of redevelopment projects, where money was spent, fund balance, etc. Also, annual JRB meetings.
- Another vacant shopping center – DeKalb, IL
- The new Northland Shopping Center assisted by TIF Building demo & rehab Storm drainage Traffic signal
- The amount that can be financed with TIF is predicated on the amount of increment generated by the redevelopment projects (and to some extent inflationary growth) City can pay as you go (when funds are available)… issue promissory notes to the developer (they pay for eligible costs up front)… or issue bonds (usually requires the project to be complete) Area configuration is important… timeliness the clock is running… better to have projects in cue. Support of taxing districts is crucial… When thinking about establishing a TIF have early dialogue with them… All taxing bodies are buying into the program, even though the municipality has the final call.
- Old deteriorated neighborhood east of downtown Carbondale.
- Vacant gas station site
- Another vacant building (part of the old dairy building) typical…
- New bank building about complete… Carbondale’s 1 st TIF district is well underway.
- Within a year after adopting TIF No. 1 in Carbondale
- Building rehab in downtown Springfield.
- Building rehab in downtown Springfield.