What is TIF

WHAT IS TIF, THE BENEFITS AND HOW ITS USED

A RESOURCE GUIDE TO TAX INCREMENT FINANCING (TIF)

program that allocates future increases in property taxes from a designated area, or TIF district, to pay for improvements within that area. In Illinois, the TIF district can remain in place for up to 23 years after its creation. The district can be extended for another 12 years, but an extension requires an act of the state legislature. Other states’ laws regarding TIF vary, but the key principles are similar across the country.

What Is TIF? Tax Increment Financing (TIF) is a

How it Works

Normally, property is taxed by several different governmental jurisdictions: the municipality (City or Village), School District, County, Park District, Water Reclamation District, etc. The taxes levied are allocated to each district in accordance with its tax rate. (In this document, we refer to the municipality as the City, but it also applies to Villages).

Under TIF, the property taxes resulting from increased value due to new development, rehabilitation or improvement, property appreciation, equalization, or rate changes are all allocated to the City. Other jurisdictions continue to receive the property taxes generated by the base value of properties in the district.

All properties in the district are assessed in the same manner as all other properties and taxed at the same rate. TIF is not an increase in taxes. It is only a re-allocation of how they are used. Increases in property taxes experienced by property owners are due to reassessment and rate increases, not TIF.

Rationale

The rationale for TIF is that only the City has the responsibility and authority to support redevelopment and, more broadly, economic development. All taxing bodies benefit in the long run from the City’s activities. It is, therefore, appropriate to utilize “their taxes” to help pay for costs necessary to bring about redevelopment from which the entire City will benefit. Since only the City can incur those costs, it is fair to re-allocate those tax dollars for the use of the City for a redevelopment project.

TIF District Designation Eligibility

Illinois law provides for three different potential types of eligibility analyses that could result in an area being deemed eligible for designation as a TIF district:

1. Improved land

2. Vacant Land

3. Industrial Park Conservation Area & Jobs Recovery Act Eligibilities

1. Improved Land

If an area is improved, it can qualify for TIF eligibility in one of two ways:

Conservation Area. In this finding, over 50% of buildings within the area must be 35 years old or older, AND three (3) or more eligibility factors from the list below must be found to be present to a meaningful extent and reasonably distributed through the area:

• Dilapidation

• Obsolescence

• Deterioration

• Presence of structures below minimum code standards

• Illegal use of structures

• Excessive vacancy

• Lack of ventilation, light or sanitary facilities

• Inadequate utilities

• Excessive land coverage and overcrowding of structures and community facilities

• Deleterious land use or layout

• Environmental clean-up

• Lack of community planning

• Lack of growth in EAV

Blighted Area. In this finding, five (5) or more of the eligibility factors listed above must be found to be present to a meaningful extent and reasonably distributed throughout the area.

2. Vacant Land

There are two ways to qualify vacant land for TIF eligibility: the two-factor test or one-factor test.

Two-Factor Test. One way is to find that at least two (2) of the following six (6) factors are present to a meaningful extent and reasonably distributed throughout the study area:

• Obsolete platting

• Diversity of ownership

• Tax and special assessment delinquencies

• Deterioration of structures or site improvements in areas adjacent to vacant land

• Environmental issues

• Lack of growth in EAV

One-Factor Test. Vacant land may also qualify if the area meets one of the following criteria:

• Contains unused quarries, strip mines, or strip mine ponds

• Contains unused rail yards, rail tracks, or railroad rightsof-way

• Is subject to chronic flooding that adversely impacts real property or discharges water that contributes to flooding within the watershed (In order to consider this factor, the redevelopment project must provide for facility improvements that will contribute to the alleviation of all or part of the flooding)

• Contains unused or illegal dumping sites

• Was designated as a town center prior to January 1, 1982, is between 50 and 100 acres in size, and is 75% vacant land

• Qualified as blighted prior to becoming vacant

3. Industrial Park Conservation Area & Jobs Recovery Act Eligibilities

These two approaches are much less frequently utilized and are used only to designate industrial park TIF districts. They rely on findings regarding unemployment and inadequate infrastructure levels, vacant buildings, or environmentally contaminated sites.

These types of TIF districts only allow for industrial development and thus are rather limiting from a future land use perspective.

District Designation Required Findings and Tests

In addition to meeting the eligibility standards outlined above, to create a TIF district, the following tests must also be passed:

1. Lack of Growth & Development through Investment by Private Enterprise. This is a backward-looking finding that the area has not been subject to prior growth via private investment.

2. “But for” TIF, the study area “would not reasonably be anticipated to be developed.”

3. Contiguity. A finding must be made that only those contiguous parcels of real property that are expected to benefit substantially from the TIF district are included in the district boundary.

4. Conformance to the Plans of the Municipality. The future land use plan for a TIF district must conform to the comprehensive plan or other land use plans or regulations for a City. TIF plans are not permitted to be used to make new land use policy.

5. Housing Impact Study. If the redevelopment plan would result in the displacement of residents from 10 or more inhabited residential units, or if the redevelopment project area contains 75 or more inhabited residential units, and no municipal certification that displacement will not occur is made, then a housing impact study is required.

Providing TIF Assistance to a Project

Public Project Review Considerations

The review considerations for supporting a public project, such as a park, streetscape or other public capital project, are relatively simple.

1. Are there sufficient TIF funds available or projected to be available to pay for the project?

2. Does the proposed project support the goals and objective of the TIF plan?

Private Project Review Considerations

For projects that are driven by private sector developers or business owners, providing public TIF funding should be considered an extraordinary intervention in the largely privately-driven real estate market. Accordingly, such interventions are worthy of a good deal of scrutiny, and any agreement to financially support a private project must be structured carefully to provide the City with reasonable protections and assurances regarding outcomes. We recommend that projects requesting City TIF assistance be reviewed in the following ways:

Project Feasibility Review – Before getting too far into detailed financial and legal work, some level of market and/ or other higher-level feasibility testing may be warranted. Assuming the project passes this initial test, further research and analyses may be desired.

Public Benefit – This analysis is crucial because an inability to get private financing does not necessarily mean a project warrants TIF funding. The core question here is: “What is the benefit that the City is receiving that warrants an extraordinary intervention?” Public benefits can include bringing a contaminated site back into productive use, employment growth, and tax base growth, among others.

Eligible/Extraordinary Costs – State law only allows for certain types of costs to be paid for with TIF funds. A close inspection of the project budget is required to ensure that the City is reimbursing for legally allowed costs.

Gap Analysis – Assuming a project is providing sufficient public benefits to potentially warrant TIF funding, a detailed review of the project’s financials is recommended. Examinations of projected revenues, costs, absorption pace, financing plan and other key elements of the project are necessary to determine whether the project needs TIF money to achieve a market-level return for the developer. By subjecting the project’s financial projections to close scrutiny, the City also demonstrates to taxpayers and other taxing bodies that they are careful stewards of these funds and seek to use TIF only when the project legitimately requires assistance.

TIF Revenue Projections – In addition to validating the need for assistance, a City should also assess whether there will be sufficient revenues to provide the required assistance. Revenue projections based on market-validated comparable assessments and absorption levels provide a sense of the scale of potential assistance.

Balancing Risk and Structuring Deals – Once the level of assistance has been negotiated based on the work conducted above, the form, timing and terms of that assistance must be negotiated. For example, in this process, cities often introduce “go dark” provisions; if a project stops operating within a certain period of time, the TIF payments can be stopped and prior payments can be recaptured.

Bond Feasibility Study

If, in the course of reviewing the project’s pro forma, it is determined that TIF bonds are required by the developer and/ or desirable for the City, additional research regarding revenue projections will be required. Refined TIF revenue projections along with substantial supporting documentation must be prepared to make the bonds saleable both legally and from a market perspective.

Compliance and Reporting Considerations

TIF payments must be made as reimbursements for costs already incurred. Documentation of costs incurred and paid must be submitted and approved before releasing TIF funds. In addition, state law requires cities to prepare regular reports on TIF districts to help ensure that adequate public scrutiny is given to these funds.

Project Compliance

It is common practice for a City to review the documentation regarding TIF-eligible costs prior to making a payment. Documentation of project costs often includes:

1. Lien waivers for lienable costs such as hard construction costs

2. Copies of invoices and canceled checks for non-lienable costs (soft costs)

3. Transfer tax documents for land purchases

4. Interest cost statements from lenders

Some cities require a total investment amount as a part of their agreement(s) with developers. That figure can often be verified by reviewing an Owner’s Sworn Statement in concert with other documents.

A close review of these documents ensures that a City is only reimbursing for costs that were incurred at the right time, in the right location, and used for legally allowable purposes. Again, close scrutiny of these issues can help show the care with which a City is utilizing TIF funds.

State Reporting Compliance

In addition to reviewing project costs to be sure that TIF funds are being spent legally, Illinois state law requires that cities generate reports to explain the activities occurring within a TIF district to other taxing bodies and the public. There are two major types of reports that must be generated:

1. Annual Reports – These reports are generated within a template provided by the State Office of the Comptroller. They provide a summary-level reporting of revenues and expenses for the most recent year and cumulatively since the creation of the TIF district. These reports must be completed prior to the annual Joint Review Board Meeting, also required by state law.

2. 10-Year Status Reports – Illinois law also requires cities to provide a status report after a TIF district has been in place for 10 years. State law provides general guidance in terms of report content. However, these reports are much more narrative in nature and can vary from one TIF district to another. For an example of a 10-Year Status Report completed for the City of Chicago, please visit: http://bit.ly/K7309A.

Conclusions

Tax Increment Financing (TIF) is a powerful tool that allows municipalities to make targeted investments to help spur economic development. The right combination of experience and expertise is essential to ensure that TIF districts are created and managed in accordance with applicable state statutes and maximize the public benefits of investing property tax dollars in public and private projects. In addition, following best practices in eligibility analysis and reporting can help ensure that public funds are well-managed and increase public confidence in municipalities’ TIF programs. Enabling legislation requires a variety of findings when establishing a district, defines eligible costs that can be funded with TIF money, and requires ongoing reporting and compliance to help ensure transparency and accountability to taxpayers and other taxing bodies.

A well-managed TIF program can help certain communities spur development and/or redevelopment while being sensitive to legal and public policy concerns of other local stakeholders.

Note: This document is only a brief summary of the requirements and conditions for Tax Increment Financing. The full text, including recent reforms, of the Illinois Tax Increment Allocation Redevelopment Act, 65 ILCS 5/11-74.4-1, can be found online at: http://bit.ly/1ghRAuP | http://bit.ly/K74f8B

The full text of the Industrial Jobs Recovery Law can be found online at: http://bit.ly/1dgCDek

For more information on Tax Increment Financing and/or TIF consulting services, please contact SB Friedman Development Advisors at (312) 424-4250 or info@sbfriedman.com

TIF Districts in Illinois

01/09/2023

Tax Increment Financing (TIF) Explained

The information below was adapted from the Illinois Tax Increment Association (ITIA).

What is Tax Increment Financing?

Tax Increment Financing, or TIF, is a tool state lawmakers gave local governments in the 1980s to help communities restore their most run-down areas or jumpstart economically sluggish parts of town. With this tool, financially strapped municipalities can make the improvements they need, like new roads or new sewers, and provide incentives to attract businesses or to help existing businesses expand without tapping into general funds or raising taxes.

Since the federal and state governments have greatly reduced their support for economic development, TIF allows municipalities to accept some of this responsibility without raising local property taxes.

TIFs help local governments attract private development and new businesses. New businesses mean more jobs, more customers, and, in turn, more private investment. TIF designation also helps retain existing businesses that might otherwise find more attractive options elsewhere. The jobs and additional investment private and public mean more money for the community. TIF also helps to overcome the extraordinary costs that often prevent development and private investment from occurring on environmentally contaminated and other properties. As a result, the TIF area itself improves and property values go up.

Without TIF benefits, a deteriorating area will not improve. Businesses do not sink capital into decaying areas and most communities cannot afford the needed costly improvements without raising taxes. But in a TIF district, dollars for improvements are generated by businesses new and old attracted by the TIF benefits. Specifically, money for infrastructure improvements and other incentives comes from the growth in property tax revenues the tax increment.

What is a “Tax Increment”?

A tax increment is the difference between the amount of property tax revenue generated before TIF district designation and the amount of property tax revenue generated after TIF designation.

Establishment of a TIF does not reduce property tax revenues available to the overlapping taxing bodies. Property taxes collected on properties included in the TIF at the time of its designation continue to be

distributed to the school districts, county, community college and all other affected taxing districts in the same manner as if the TIF did not exist. Only property taxes generated by the incremental increase in the value of these properties after that time are available for use by the TIF.

How do TIFs improve communities?

TIFs create short and long term benefits for communities. TIF benefits include:

No tax increases Increased property values Private investment and development New jobs Job retention Job training programs Stronger, broader tax base Stronger economic base Locally controlled development Incremental revenue is reinvested in the TIF district Stimulates investment outside TIF district boundaries

Are TIFs widely used?

Since the establishment of the first TIF districts in California in 1952, TIF has been used throughout the United States in both communities large and small, rural and urban. According the Council of Development Finance Agencies (CDFA), as of June 2006, 49 states and the District of Columbia were using TIF as a catalyst for local development and redevelopment. According to CDFA, Arizona is the only state that does not have a TIF law in place. Previous studies indicated that the Midwest leads the nation in TIFs. Four of the seven leading states in the use of TIF are Indiana, Minnesota, Wisconsin and Illinois. This being the case, TIF helps make Illinois communities competitive with communities in the Midwest as well as throughout the nation.

How long has TIF been around?

Tax Increment Financing was first used in California over half a century ago. Over 20 years ago, the Illinois General Assembly passed the Illinois Tax Increment Allocation Redevelopment Act that brought this development tool to Illinois. Illinois was the 25th state to adopt this economic development mechanism.

Why is there a need for Tax Increment Financing?

Tax Increment Financing has proven to be an enduring and widely used economic development tool nationwide. TIFs are more frequently used now than ever because other development tools like Industrial Revenue Bonds and Urban Development and Infrastructure Grants are no longer readily available to local governments.

Billions of dollars in federal and state aid to local governments have been eliminated. At the same time, unfunded federal and state mandates have increased the financial burden on most municipalities. Factor in state imposed property tax caps, and the funding problems facing local governments make it obvious that local governments are left to do more with less.

TIF offers local governments a way to revitalize their communities by expanding their tax base, offsetting, in part, the federal and state funds that are no longer available to them without imposing increased property taxes on the whole community. Select Language

Does TIF divert money from schools?

No – actually, TIFs can create money for schools.

1. First, schools continue to receive all the tax revenue they were entitled to before the creation of the TIF district.

2. Second, under most circumstances, a school’s state aid is greater when a school district overlaps a successful TIF district. The incremental growth in property values is excluded from the property tax base when the state calculates the amount of aid it should award to a school district. The “poorer” a school district, the more it stands to benefit from having a TIF district.

3. Third, the property tax revenue generated from private development attracted by a TIF designation is truly “new” money. Without TIF, development would not occur and the tax increment would not be produced. Not only would new tax money not be generated but also the area itself would remain economically stagnant.

Critics of TIF argue that school districts are entitled to immediately receive a percentage of the TIF increment. However, it is the tax increment that pays for the improvements that attract private investment and stimulates economic growth. If the increment cannot be used for financing improvements and incentives, private investment and economic development will not occur, and no increment will be made available to any taxing bodies.

4. Fourth, when the TIF district expires, the tax increment that had been used by the municipality to pay off the redevelopment costs is returned to the tax rolls and available to schools and other local taxing bodies even in areas where property tax “caps” have been adopted.

5. Fifth, from time to time a TIF district generates more incremental revenue than is needed to retire the TIF debt and pay redevelopment costs. That surplus is often distributed to the other taxing bodies, including schools.

How does TIF affect property owners or homeowners in or near the TIF District?

Homeowners and property owners benefit from a successful TIF District in several ways:

Property values are generally stabilized or improved, which can create a “spill over” benefit for adjacent neighborhoods.

Certain public improvements – water/sewer/streets, etc. – can be and have been paid for through sources other than general property taxes.

Increased business activity can mean that fewer homeowner property taxes are required to provide for essential services – police, fire, public safety, etc.

Does TIF result in increased tax rates?

TIF captures increases in tax revenue without any change in tax rates. If property values increase as redevelopment occurs, the municipality will receive increased revenues and utilize those revenues to pay for public improvements without increasing tax rates.

The general tax rate in the scenario above stays the same. Only property taxes resulting from any increase in property values, above and beyond the values in the current year, would be designated for future TIF projects.

How does Tax Increment Financing work?

Here’s an example of how TIF can work in an Illinois community:

Hundreds of acres of property in the northwest side of Anytown were left unoccupied following decades of decline in the steel industry. The area was characterized by dangerously obsolete, environmentally contaminated facilities, old and inadequate access roads and utilities, and vacant foundries. Furthermore, no building permits had been issued in the area in over 10 years.

Anytown decided that it could attract private investors to this part of the city if it could repair the access roads and clean up and rehab the dilapidated structures.

Anytown designated this area as a TIF district. A ball-bearing company that had been looking to expand its operations found one of the improved buildings to be ideal for its manufacturing and distribution facilities. This company brought 175 new jobs to the area, generated sales tax revenue in excess of $1.3 million, and increased the property value in the district significantly.

The new jobs brought new residents to the district, and a private developer built 50 new townhouses in the area in response to the increased demand for housing. The local school district’s state aid increased due to the surge in enrollment.

The city used the additional property tax revenue the tax increment to pay for the clean up, new access road and improved utilities.

The Illinois Department of Commerce and Economic Opportunity (DCEO) has traditionally classified TIFs into five major categories:

Central Business District Shopping Mall/Commercial Industrial Mixed Development/Non-Central Business District Housing

How is a TIF created?

Illinois TIF law specifies a number of requirements that must be satisfied for an area to qualify as a TIF district, beginning with identifying the district and the physical and economic deficiencies that need to be cured. Then municipal officials and a joint review board made up of representatives from local taxing bodies must review a plan for the redevelopment of the TIF area. A public hearing is held where residents and other interested parties can express their thoughts on the subject.

The proposal must pass through the same approval process through the municipal governing board. Finally, the mayor or village president will sign the ordinance into law. No state or federal approval is required.

What kind of planning goes into the development of a TIF project area?

A Redevelopment Plan is an assessment of an area in need of economic assistance. The Plan demonstrates why the area needs to be redeveloped and how the municipality plans to revitalize the area.

Illinois law requires review by the major overlapping local taxing bodies and a public hearing on the Redevelopment Plan prior to TIF designation. The Plan must be made available for public review and inspection at least 45 days prior to the public hearing.

A Redevelopment Plan includes:

A description of the boundaries of the district recommended for redevelopment; Reasons for redevelopment of the area; Documentation of how the area satisfies the “but for” requirement in order to qualify for TIF eligibility; Redevelopment goals and objectives for the area; An explanation of how the land in the proposed TIF district will be used; A budget for the life of the TIF district, including the total TIF-eligible costs of the plan; An evaluation of the fiscal and programmatic impact on the overlapping taxing bodies; A description of the process to amend the plan; A statement of conformance with the municipality’s comprehensive plan; and A timetable for redevelopment of the area.

What major redevelopment costs are eligible for TIF funding?

What kinds of projects are permitted under the State TIF Act?

TIF funds may be used for costs that will permit previously developed properties to compete with vacant land at the edge of the urban area. State legislation authorizes that TIF funds may be used for:

Property acquisition; Rehabilitation or renovation of existing public or private buildings; Construction of public works or improvements; Job retraining programs; Relocation; Financing costs, including interest assistance;

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▼ Studies, surveys, and plans; Professional services, such as architectural, engineering, legal, property marketing, and financial planning; Demolition and site preparation; Day care services; A budget for the life of the TIF district, including the total TIF-eligible costs of the plan; An evaluation of the fiscal and programmatic impact on the overlapping taxing bodies; A description of the process to amend the plan; A statement of conformance with the municipality’s comprehensive plan; and A timetable for redevelopment of the area.

What conditions must exist for an area to be designated for TIF?

Illinois law includes three sets of conditions for qualifying areas as TIFs:

blighted conditions conservation conditions industrial park conservation conditions

To be designated as a blighted area:

Improved property (land that is not vacant) must contain at least 5 of 14 factors that make it detrimental to the public safety, health or welfare of the community. These factors must be present, with that presence documented, to a meaningful extent so that a municipality may reasonably find that each factor is clearly present and reasonably distributed throughout the improved part of the area. These factors are:

Dilapidation; Obsolescence; Deterioration; Illegal use of individual structures; Structures below minimum code standards; Excessive land coverage and overcrowding of structures and community facilities; Lack of ventilation, light or sanitary facilities; Inadequate utilities; Excessive land coverage; Deleterious land use or layout; Environmental clean-up; Declining equalized assessed value; and Lack of community planning.

Vacant land must have at least two of the following six factors that impair sound growth of the area, using comparable standards of evidence as for improved areas:

Obsolete platting; Diversity of ownership; Tax and special assessment delinquencies; Environmental contamination; Declining equalized assessed value; and Deterioration of structures or site improvements on adjacent land.

In addition, there are six other types of vacant land that can be designated for TIF. They include land that was blighted before becoming vacant; unused quarries, mines, or strip mine ponds; unused rail yards, rail tracks or railroad right-of-way; chronic flooding that adversely impacts on property in the area and is caused by improvements recently constructed in the area; unused or illegal disposal sites; and large areas that have been previously designated as a town center and meet other requirements.

To be designated as an industrial park conservation area:

The municipality must have had a relatively high unemployment rate and the area to be designated must be located within the municipality or within 1.5 miles of the municipal boundaries and be annexed to the municipality; be zoned industrial prior to the establishment of the TIF and contain vacant land suitable for an industrial park and a blighted or conservation area contiguous to the vacant land.

To be designated as a conservation area:

At least 50% of the structures in the improved area must be 35 years old; Three of the 14 factors for designation of a blighted area and another factor entitled “excessive vacancies” must be present.

What are the opportunities for public input?

In the establishment and operation of a TIF district, there are many opportunities for public participation.

Before a TIF district is created, the Redevelopment Plan must be available for public review at least 45 days prior to the public hearing. The public hearing offers the community an opportunity to raise questions and voice their concerns about the proposed redevelopment. A member from the community,

representing the public, serves on the Joint Review Board along with representatives of the major taxing bodies overlapping the TIF.

A registry of interested residents and organizations must be created for each TIF, and a notice of important TIF activities shall be sent to those registered.

Committee meetings of the city council or village trustees afford the public another opportunity to voice support or opposition of the TIF district.

Extensive annual reports are required for each TIF and will soon be available to the public through the State Comptroller's web page.

Additional notices and public meetings are required for certain housing TIFs.

Who controls TIF funds?

Municipal officials control the allocation and disbursement of funds within the TIF district.

Does TIF require the issuance of debt?

The creation or amendment of a TIF district does not mean that any debt will be created or incurred. If the City decides to incur debt to provide for public improvements, then funds for debt repayment will generally come from taxes generated in the TIF District and not from any city-wide property taxes. The city possesses the option of using other revenues and issuing other types of debt-if it believes that a specific development project would justify such utilization of funds and/or taxing powers.

Can TIFs be changed?

Yes, TIFs can be changed.

In the case of minor changes to the Redevelopment Plan, notice must be given to all taxing bodies and to the public through publication in a newspaper of general circulation within the area prior to the TIF being established.

However, major changes to the Redevelopment Plan adding parcels of property to the TIF district, changing land use, changing the nature of or extending the life of a TIF, increasing the number of low income households to be displaced, add new redevelopment costs to the budget, or increasing the budget by more than 5% after adjustments for inflation, require another public hearing, and all the opportunities for public input that were available during the initial establishment of the TIF district.

Who monitors the TIF process?

Local governments monitor the progress of the TIF district. By law, all the school districts and major taxing bodies meet with the TIF municipality annually to review the progress of each TIF. Select Language

▼ Under Illinois law, municipalities have an obligation to cooperate with other taxing bodies in monitoring TIFs. By law, the Joint Review Board must meet annually to review the effectiveness and status of the TIF district.

When does a TIF terminate?

Illinois TIF law allows a TIF district to exist for a maximum of 23 years. Any TIF district may be terminated earlier if all financial obligations are paid off and the municipal board votes to terminate the district.

If no redevelopment project has been initiated within a TIF district within seven years following district designation, the municipality must repeal the TIF. Upon termination of the TIF district, the full tax base, including the increment which had been used to pay for improvements, becomes available to all taxing bodies for their use throughout the future.

Other TIF Benefits:

TIF is a local government value capture revenue tool that uses taxes on future gains in real estate values within an area known as a TIF district to pay for infrastructure improvements. TIF creates funding for public or private projects by allowing entities to borrow against future increases in property-tax revenues. TIF is based on the concept that public infrastructure investments support conditions that spur private development, leading to higher property values and other economic benefits, such as new jobs and higher sales tax revenues. The basic premise is that because these economic benefits would not occur “but for” the upfront public-sector investments, municipalities might decide to capture the new property tax revenue and use it to pay for the infrastructure investments that are expected to spark the growth.

Plans for specific improvements within the TIF district are developed with the intent to enhance the value of existing properties and encourage new development in the district. Although the specific rules and regulations for TIF districts vary from State to State depending on State and local laws, they share many similarities, and the basic principles are generally the same.

Other Miscellaneous TIF Funding Allocations:

Upon acceptance of the tif values a percentage of the TIF is allocated various entities during the coarse of the 23 year increments

1. On the Residential part of the Development a value of the TIF is determined and a percentage is negotiated between all parties, Village of Hazel Crest, School District and The developer. The percentage will vary between 5-20% based on the determined values.

2. On the remaining portion of the Development the Village of Hazel Crest will go into negotiations with the Developer to determine what percentage of the remain TIF allocations will be dedicated to the other Municipal Services such as, Police, Fire, and Library.