At the December 11 City Council Regular Meeting, the City Council unanimously approved the creation of the Briergate Tax Increment Financing (TIF) District. The Briergate TIF District was created to support the cost of infrastructure improvements for the Briergate Business District (BBD) in order to encourage investment and revitalization. TIF funds will be used in conjunction with revenue from an existing Special Service Area (SSA) which was established in 2014 and will run through 2023 in the BBD. The City collects SSA funds from property owners within the BBD to help share the cost of physical improvements and marketing. Per State Statute, TIF designations run for a 23-year term unless terminated sooner by the designating municipality. TIF funds will cover the cost of improvements that could not otherwise be funded by the SSA. The City worked in collaboration with its sister governments, the Park District of Highland Park and school districts 109, 112 and 113 pertaining to the TIF review and assessment. The City of Highland Park, school districts 109, 112, and 113, and the Park District of Highland Park all unanimously approved an intergovernmental agreement recently at their respective public meetings which memorializes the parties’ support for the Briergate TIF District, sets forth mutual agreement concerning the use of TIF revenues, and establishes a process for reviewing the success of the TIF District.
The Briergate TIF District was created in response to Briergate Business Association District (BBAD) business and property owner desires to advance improvements within the district before 2025 resulting in revitalization of the BBD. The City plans to use TIF funds for infrastructure improvements in the BBD to increase safety in the area, including replacement of the roadway; and installation of curb and gutter, sidewalks, parking bays and lighting which presently do not exist in the district. The Briergate Business District is located along US 41, along Deerfield Road, Old Deerfield Road, and Old Skokie Road.
State law requires that prior to establishing a TIF District, a municipality must conduct a study to determine the eligibility of a TIF for a specific area. Earlier this year, the City engaged Camiros, Ltd. to conduct a TIF Eligibility Study and to provide a Redevelopment Plan for the BBD. Camiros, Ltd. determined that the Briergate Business District is TIF eligible and that a TIF District is an appropriate designation for the area. The City also worked closely on an intergovernmental agreement which establishes consensus and support from overlapping government entities for the creation of the Briergate TIF District. The agreement sets forth the parties’ mutual agreement and understanding concerning the use of TIF revenues and also a process for reviewing the progress of the TIF District.
For more information on the Briergate TIF District approved at the December 11 City Council meeting, please visit: http://highlandparkil.iqm2.com/Citizens/Detail_LegiFile.aspx?Frame=&MeetingID=1789&MediaPosition=&ID=2618&CssClass=.
What is TIF?
Illinois law allows local governments to designate areas within their jurisdiction as Tax Increment Financing (TIF) districts. These specially-designated districts are used by local governments as a way to spur economic growth within these districts. The concept behind tax increment financing is that by making infrastructure and other improvements to a district, additional private sector investment will be drawn to the district, thereby increasing property values and property tax revenue. Tax increment financing captures the difference in existing property tax revenue within a district and future (higher) property tax revenue, after improvements have been made, to finance the cost of the improvements. The difference in existing property tax revenue (base revenue) and future (higher) property tax revenue is known as “incremental revenue”, and this incremental revenue is the source of funds to pay for infrastructure improvements and other eligible TIF expenditures to attract private-sector investment to the district. The base revenue continues to flow to the various taxing districts that levy taxes within the district, which helps to mitigate impacts on units of local government. Thus, the funds used for TIF district expenditures are not new taxes imposed on property owners, but incremental property tax revenue generated from increased investment in the district.
In Illinois, once a TIF district is approved, the designation stays in place for 23 years, unless terminated earlier. During that period, any new property tax revenue generated by development in the district will be used by the City for infrastructure improvements or other development incentives intended to attract investment to the district. Other local taxing bodies, such as public school systems, park districts, counties, etc., continue to divide up the amount of property tax collected before the TIF district was created.
The TIF process splits tax revenue generated from properties within the TIF district into two components:
• Base revenues – This is the amount of property tax revenue being generated before the TIF district is established; base revenues are shared among the various local governments that have taxing jurisdiction within the district.
• Incremental revenues – These new revenues are revenues over and above the base revenues and are generated by new investment in property that occurred after the TIF district was established. By allocating exclusive use of incremental revenues for eligible purposes defined by the TIF Act, the process generates a revenue stream in successful TIF districts to pay for infrastructure improvement and other incentives to encourage growth.
Only property taxes generated by the incremental increase in value of property within the TIF district are available to be used for TIF expenditures.
School districts, park districts, or other taxing bodies continue to receive all the tax revenue from the TIF district at the time the TIF district is established. Taxes derived from future growth of the EAV are designated toward the TIF fund and for TIF eligible expenditures.
In this way, the TIF district stimulates the investment in property that generates the revenue the TIF district uses to incent reinvestment and development.