Common TIF Questions & Answers

What is Tax Increment Financing (TIF)?

Tax Increment Financing (TIF) is a statutory economic development program that allows municipalities to carry out redevelopment activities for older developed areas with or the potential for deteriorating improvements, such as roadways and sewers, and conditions, such as flooding and drainage. The program is used to pay for public improvements and other activities necessary to improve the area of the TIF District to attract and support private investment. This private investment is intended to improve the physical and appearance conditions of the TIF District, retain and increase employment in the area, and ultimately, improve the tax base of the area whereby lowering the overall tax burden for individual property owners. 


How does a TIF District receive its funding?

In order to fund improvements under a TIF District, a municipality captures the increase in local real estate property taxes which result from redevelopment within the TIF District. The establishment of a TIF District does not add any property taxes. Under a TIF District, the current Equalized Assessed Valuation (EAV) of all taxable real estate within the designated boundaries is identified by the County Clerk as of the date of the Village's adoption of the TIF ordinances. This amount is the base EAV. Existing, annual, normal property taxes are levied on the base EAV in the TIF District and such taxes are distributed to all taxing bodies including: the Village, the County, school district, township, etc. However, the growth in annual property tax revenues in excess of the amount generated by the base EAV as a result of the private investment in the TIF District (i.e. the tax increment) is then deposited into a "special tax allocation fund". The Village of Green Oaks manages this special tax allocation fund and uses it on expenditures to improve the TIF District and attract private investment only as directed by action of the Village Board.  


What are the general boundaries of the proposed TIF District?

A map of the TIF District is available here: Digital TIF Map

The TIF is approximately 340 acres with the following general boundaries:

o   East of U.S. Interstate 94:

 

North: The northern border is generally formed on the west half by the Metra railroad tracks and on the eastern half by the northern border of the Village with the exception to this boundary being a parcel extending northward in the east central portion of the RPA west of the unincorporated Forest Knoll Estates subdivision and two (2) parcels consisting of the former Hill Top Center which front onto Waukegan Road (IL Route 43) and Atkinson Road.

East: The eastern border is formed by the eastern border of the Village adjacent to the existing unincorporated Knollwood residential area.

South: The southern border is generally formed on the east half by the southern property line of the properties in the North Shore Bike Path and on the west half generally by the southern property lines of those non-residential developments incorporated in the Village.

o   West of U.S. Interstate 94:

 

The first four (4) parcels south of IL Route 176 incorporated into the Village of Green Oaks west of Interstate 94.

What is the purpose of the TIF District?

The primary purpose for enacting the TIF District was to provide a funding source to improve the aging infrastructure of the Rondout area that was developed over the last approximately 100 years. The Village is also seeking to improve the conditions in the TIF District to attract private investment in the TIF District which sustain and increase the tax base.

 

The Village has adopted a Redevelopment Plan that provides the overall plan governing the implementation of the TIF District, particularly concerning the Goals and Objectives for the TIF District. As outlined in the Redevelopment the following are the primary goals for the TIF District:

 

  1. Encourage development through the conscientious investment of combined incremental revenues that will increase the tax base for governmental bodies servicing the RPA.
  2. Improve the deficient infrastructure and utilities in the RPA to modern and practical standards that will facilitate development/redevelopment. These investments could account for both current and future demands within the RPA.
  3. Address the chronic, detrimental, and potentially dangerous historic flooding and drainage issues persistent throughout the RPA.
  4. Remove the conditions of blight outlined in the Eligibility Study through encouraging and supporting the private market to make the necessary improvements to existing developments and site conditions.
  5. Coordinate development/redevelopment efforts between numerous public and private interests to attempt to create an appropriate level of improvements that will support the functionality and longevity of both public and private investments and infrastructure in the area to the benefit of the Village, overlapping taxing bodies, property owners, and businesses.
  6. Seek to improve the aesthetic character of the Village, especially the enhancement of the commercial corridors and areas along Illinois Route 176, Waukegan Road, and Atkinson Road, through the addition of streetscape improvements, such as landscaping, decorative streetlights, removal/relocation of unsightly overhead utility poles and wires, and other similar improvements.
  7. Provide any job training assistance, housing and other such services and programs required under the Act.

To achieve these goals, the contemplated Village actions and expenditure items include, but are not limited to:  the attraction of investment to redevelop underutilized properties and buildings; the construction of public improvements (including street and sidewalk improvements; utility improvements; signalization, traffic control and lighting; off-street parking; and landscaping and beautification); site preparation, clearance and demolition; rehabilitation; and related professional costs.

 

Will property tax assessment increase because of the TIF District?

No. The Township Assessor’s office determines the tax assessment on property, and that assessment is not affected by inclusion in or exclusion from a TIF district. Property is assessed based on its value just as any property within the community would normally be assessed.

 

How long will the TIF District last?

In Illinois, TIF Districts have a maximum statutory limit of 23 years without separate action by the Illinois State Legislature. A TIF District may be ended earlier if decided by the municipality that it has accomplished all of its stated goals and funding obligations are met. It is projected the proposed TIF District will expire by the end of 2037.

 

Does the TIF District affect property rights or zoning?

No. Approval of the proposed TIF District in no way affects property rights or existing zoning designations. The TIF District is an economic development program.

 

How does the Village decide whether or not to utilize available tax incremental funds?

As guided by the Goals and Objectives of the Redevelopment Plan, the Village has also adopted specific TIF Policies and Procedures regarding how, when, and to what extent funds are to be spent on projects. Projects brought forward by private interests are evaluated through a multi-tier application process with evaluation criteria as outlined in the TIF Policies and Procedures. Additionally, tax incremental funds may only be spent on eligible costs as outlined in the Illinois TIF Statue.

 

It is the Village goal that all funds utilized for private projects are "Pay As You Go”.  All expenditures of funds must be approved by action of the Village Board commensurate with a Redevelopment Agreement. For more information regarding the application process please contact the Village TIF Administrator, Ken Marabella at vilgrnoaks@aol.com or by phone at 847-362-5363

 

What is "Pay As You Go” and How are Private Projects Assisted?

Based on the Village’s commitment to fiscal responsibility, the Village seeks only to utilize funds with regards to private development projects on a "pay as you go basis”. "Pay as you go” means the Village will only expend tax incremental funds once it has received them from the incremental property taxes generated by a project from increased EAV on a property and only proportional to those funds generated. In simpler terms, a private project must first increase the EAV on a property and pay taxes before any reimbursement of funds to pay for eligible project costs as approved by the Village Board can occur. Additionally, the Village’s TIF Policies and Procedures place certain limits on the amount of tax incremental revenue that can be spent on a particular private project relative to the amount it generates.

 

What Public Project does the Village plan on spending funds on?

The primary driver for the Village pursuing the TIF District was to provide a funding mechanism to address the aging and deteriorated infrastructure that has been installed in the Rondout area over the last approximately 100 years. The Village’s Redevelopment Plan projects that between $35 to $55 million will be spent on public projects in the TIF District area, with the vast majority being targeted for infrastructure and utility improvements. These improvements could include, but are not limited to, roadway resurfacing and upgrading; water, sanitary sewer, and water improvements; streetscape and landscaping improvement; and other utility improvements. The Village might spend funds on other TIF Eligible Costs such as land easement acquisition, demolition and grading, engineering and other design services, and other similar costs to facilitate the infrastructure improvements in the TIF District.

 

What is the Base EAV for the TIF District?

As determined in 2014, the Base EAV for the TIF District was just under $35 million. The Base EAV remains constant for the entire life of the TIF District.