1. Revitalizing the Local Economy: TIF Districts, Business Districts, and Other Development Tools
Presented by:
David J. Silverman Mary Thompson & Nicholas Greifer The Honorable Gerald Turry
Mahoney, Silverman & Cross, LLC Kane McKenna & Associates, Inc. Village President, Village of Lincolnwood
822 Infantry Drive, Suite # N. Wacker Dr., Ste N. Lincoln Ave.
Joliet, Illinois Chicago, Illinois Lincolnwood, Illinois 60712
(815) (Main Number) (847) (Main Number)
(815) (Facsimile Number) (312) (Main Number) (312) (Facsimile Number)

2. TO DE-TIF/RE-TIF OR NOT
I PROMISE THIS WILL NOT BE AS DRAMATIC AS THE FEIGNING HAMLET - BUT RATHER LIGHTER AND FLEETING LIKE JAQUES IN “AS YOU LIKE IT” WHEN HE SAYS
Sweet are the uses of adversity, Which like the toad, ugly and venomous, Wears yet a precious jewel in his head

3. TIF is a municipal financial incentive tool created by the Illinois State Legislature in 1978 to assist communities and implement sound economic development.

4. WHEN SHOULD YOU CONSIDER A DE-TIF/RE-TIF
Is the TIF Underwater?
Is a Portion of the TIF Completed but Some Areas are Still Floundering.
Is the Term of the TIF Not Enough To Induce Incoming Projects

5. THE MAIN QUESTIONS SHOULD ALWAYS BE THE SAME
Is there still a “but for”? Will the area benefit from a TIF designation? What is the current condition or past history?
To induce industrial projects…
To induce commercial/retail projects…
To induce residential projects

6. WHAT IS AN UNDERWATER TIF & HOW DID IT HAPPEN
An “Underwater” TIF occurs when the current EAV is lower than when the Redevelopment Project Area was originally formed and adopted.
For the most part – underwater TIFs were simultaneous with the downturn in the economy and the devaluing of property.

7. POSSIBLE SOLUTIONS Evaluate the RPA as a whole
Determine if any part is performing
Can current debt obligations be met?
Decide if a reasonable return can be attained with potential development projects.

8. RECENT TIF RE-ENGINEERING PROJECT EXAMPLES
South Holland – Gateway
Lansing – Bernice
Rosemont – TIFs 6 & 7
Bellwood –
Richton Park

9. POLICY CONSIDERATIONS
Is there a “but for”?
What effect will the TIF have on other taxing districts?
What type of developments should be funded?
What resources are available to the municipality?
How does the estimate of incremental taxes compare to the costs to develop?

10. IMPLEMENTATION Follow Normal Statutory Process
Determine Boundaries – Added and/or Deleted Property
Reaffirm Qualification Criteria
Meet with Taxing Districts
Prepare Development Proformas

11. Final Thoughts TIF is a means to an end (solving the problem).
Community acceptance of use of TIF requires front end community participation.
Level of TIF assistance must be justified based on rate of return analysis.
Communication of use of TIF is essential.

12. Amending TIF Redevelopment Plans 65 ILCS 5/11-74.4-5(c)
Changes to a Redevelopment Plan which require a formal process:
add additional parcels of property
substantially affect the general land uses
substantially change the nature of the redevelopment project
increase the estimated redevelopment project costs by more than 5% after adjustment for inflation
add additional redevelopment project costs to the itemized list of redevelopment project
increase the number of inhabited residential units to be displaced from the redevelopment project area to a total of more than 10

13. Process for these Changes
Municipality provides notice
Must convene a Joint Review Board
Conduct a public hearing

14. Changes to Redevelopment Plan which do not require a formal process
All other changes
Must give notice by mail to each affected Taxing District and Registrants on Interested Parties Registry

15. Informational Change Notice Requirements
By mail – certified recommended, but not required
By publication
Both must be done within ten (10) days after the change

16. How to Amend the Redevelopment Plan
The Redevelopment Plan amendment is accomplished by an ordinance approving an amendment to the Redevelopment Plan.
If property is added or deleted, all three (3) TIF ordinances must be amended.

17. TIF ISN’T THE ONLY GAME The New Enterprise Zones
All current EZ areas will expire December 31, 2014.
Re-apply using the new parameters
Multi-jurisdictional
Labor Market Area Study

18. OTHER POTENTIAL INCENTIVES
Cook County Classification Incentives
Special County Classification Considerations
Business Districts

19. WHEN CAN A BUSINESS DISTRICT WORK
Often non-home rule communities
Boundaries
Eligibility Criteria
Retail / Commercial projects
Supportive retailers
Overlaying a Business District with Other Incentives (TIF or County)

20. Consideration for Incentives
Economic Impact
Jobs
Investments in property and equipment
Fiscal Impact
Revenues for taxing bodies
Property or sales tax incentives not abated
Sales tax
Utility tax
Other
Stimulus for Additional Projects
Will this project bring others?
Gap Analysis
What do they need to locate here?

21. Property Tax Abatements
When to consider Property Tax Abatements:
Property does not quality for Tax Increment Financing
A shorter term incentive will cover the “gap”
Sales tax or other incentives are not appropriate

22. Property Tax Abatements (Non-Enterprise Zones)
- Majority vote of governing body
- Level I – 10 years - $4 million
- Expansions may be for a longer term
- Level II – if 500 acres or a high impact business with acres; 20 years - $12 million
- Other user specific amounts available

23. Tax Abatement Agreements – The Basics
Tax Abatement Agreements should include:
Authority for the Agreement/Incentive
Expectations – Define what the developer must do to receive benefits
Length of the Incentive
Amount of the Incentive
Time of Project Completion
Source of Funds for the Incentive
Operating Covenants – Claw Backs

24. Sales Tax Agreements 65 ILCS 5/8-11-20
Home Rule – Public Purpose Rule
Non Home Rule
-vacant property
-buildings not in compliance or underutilized
-promotes development of the area
-financial strength of developer
-strengthen commercial base
-enhance tax base
-best interest of municipality
-without agreement, project not possible

25. Other Municipal Tools Abatements of other local taxes Permit fees
Use of municipal property
Streamlined process
Business districts
Enterprise zones

26. Tax Increment Financing Intergovernmental Agreement
Meeting with taxing bodies
Ideally prior to Joint Review Board
Taxing bodies acknowledge the TIF is appropriate and covenant not to challenge
Municipality promises to declare a “surplus”
Surplus returned to all taxing bodies