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It's Like Coming Home |
| MAIN STREET REDEVELOPMENT PROJECT TAX INCREMENT FINANCING DISTRICT FACTS
WHAT IS TAX INCREMENT FINANCING? Tax Increment Financing (TIF) is a technique that cities use to attract private development and investment. TIF may only be used when private development is not likely to occur without City sponsored improvements or incentives. The cost of the improvements or incentives funded by the TIF is repaid by the increased property tax revenues that arise from the redevelopment. This increase in tax revenues is the "tax increment." A key to this financing tool is that funding does not rely on the taxing power of the municipality alone. The property taxing power of all taxing districts with jurisdiction over the land within the Project Area can be employed to retire the necessary financial obligations. This taxing power is only applied to the increase in Equalized Assessed Valuation (EAV) generated within the designated Project Area during the limited term of the redevelopment project. Thus, it is anticipated that the project can pay for itself without the need for additional taxes. HOW IS THE PROPERTY TAX INCREMENT CALCULATED? Incremental property taxes are derived from the increase in the Equalized Assessed Value (EAV) of real property within the Project Area over the initial EAV of such real property. Any increase in EAV is then multiplied by the current tax rate, which results in Incremental Property Taxes. Tax increment financing does not generate tax revenues by increasing tax rates; it generates revenues by allowing the municipality to capture, temporarily, the new tax revenues produced by the enhanced valuation of properties. Under TIF, all taxing districts continue to receive property taxes levied on the initial valuation of properties within the redevelopment Project Area. Taxes are not "frozen" under TIF. Taxing districts can, through normal means, increase their tax rates. They can also receive distributions of excess Incremental Property Taxes when annual Incremental Property Taxes received exceed principal and interest obligations for that year and redevelopment project costs have been paid. Taxing districts also benefit from the increased property tax vase after redevelopment project costs and obligations are paid. HOW IS PROPERTY DETERMINED TO BE ELIGIBLE FOR TIF? Only areas that meet certain specifications outlined in State law are eligible for Tax Increment Financing. A Project Area must be found to be a "conservation area" as outlined in TIF Statutes. In order to qualify as a conservation area, at least 50% of the building in a Project Area must be at least 35 years of age or older. Additionally, a Project Area must also show a reasonable extent and distribution of at least three of the 14 factors defined in State Statutes in order to be eligible as a conservation area. The City has retained the services of Teska Associates, Inc., to evaluate the eligibility of the Project Area for TIF. Based on their findings, the Main Street TIF Redevelopment Project Area is eligible for designation as a "conservation area" based on the predominance and extent of parcels exhibiting the following characteristics: age, deterioration, depreciation of physical maintenance, obsolescence, excessive coverage, and lack of community planning. Each of these factors contributes significantly toward the decline of the Project Area as a whole. WHAT WILL TIF FUNDS BE USED FOR? The improvements which may be funded through TIF are defined by State law and may include such items as:
WHAT WILL BE THE LONG-RUN RESULT OF THESE ACTIVITIES IN THE CITY OF WHEATON? Currently, the equalized assessed value of the Project Area is approximately $11,512,070 dollars. Upon the completion of the proposed Redevelopment Program, it is estimated that the equalized assessed valuation of real property within the Project Area will be in excess of $25,000,000 in 1999 dollars. This figure is based upon estimates of value for the rehabilitation and redevelopment projects that are anticipated. This results in nearly a 100% increase as compared to the original EAV of the project area and will be a substantial contribution to the long-run stability of the tax base for all taxing bodies. HOW WILL TIF BENEFIT DOWNTOWN WHEATON? As in the first district, it should encourage new investments on the part of new and existing property owners by providing assistance in two ways: Those interested in beginning a larger project can bring plans to the City for the rehabilitation of the entire structure. The cost of the requested incentive would be evaluated against the potential for incremental revenue. If the City can be paid back through increased revenue over the life of the TIF district the City can grant funds through a development agreement. A rehabilitation fund pool where smaller projects could be created for aesthetic and code improvements to the TIF district can also be considered. This program would be similar to the City's Fa�ade Grant program where specified improvements would be made to a building and assistance with the project would come in the form of a grant for low interest loan. It is hoped that these programs will encourage new investment, which should result in stabilizing the condition of buildings Downtown and improving the aesthetic character of the district. HOW COULD VACANT BUILDINGS IN THE TIF DISTRICT BE EFFECTED? TIF programs would make a purchase or lease of vacant buildings more attractive to prospective investors. In extreme cases the City would be able to or acquire vacant or underused structures and turn them over to prospective investors. HOW COULD EXISTING BUSINESSES IN THE TIF DISTRICT BE EFFECTED? In most cases existing businesses would not be effected by the existence of he TIF district. In the case where the city acquires property, all efforts would be made to relocate existing businesses within their existing market area, and particularly, at an acceptable location within Downtown Wheaton. |
Downtown Wheaton
Association 129 West Front St. Wheaton, IL 60187
(630) 682-0633