Tax Increment Financing (TIF) Districts
What is TIF?
Tax Increment Financing (TIF) is tool available to municipalities to promote economic development in areas that are deteriorating or blighted. TIF districts are created jointly by the local taxing bodies (i.e. Village, School District, Park District, Library District, etc.) to create opportunities for private-public partnership with developers and businesses. The purpose of TIF is to promote growth and opportunity in underperforming areas.
How does TIF work?
Once a TIF district is formed, the amount in taxes collected by the local taxing bodies is frozen for the life of the TIF. TIF districts may last for up to a maximum of 23 years but may be extended an additional 12 years in rare cases. As equalized assessed values increase, local taxing authorities continued to collect the same taxes that were collected prior to the creation of the district, with the additional tax revenues (the increment) are collected into a special TIF fund (Figure 1). These new TIF funds can be used by the municipality for eligible investments in the district area to generate economic development. As the district area improves, equalized assessed values improve, and all local taxing authorities benefit from the growth when the district dissolves.
What can TIF funds be used for?
The state statute (65 ILCS 5/Art. 11 Div 74.4) outlines that TIF funding may be used to reimburse eligible public or private redevelopment costs such as:
- Property acquisition, renovation, rehabilitation, demolition
- Construction of public works or improvements
- Studies, surveys, plans
- Marketing related to the TIF
- Professional services (architecture, design engineering, etc.)
- Administration of the TIF redevelopment projects
- Job training related to TIF
How many TIF districts are in Western Springs?
There are two (2) TIF districts in Western Springs: the Downtown North TIF (shown below outlined in yellow) and the Downtown South TIF (shown below outlined in blue).
How have TIF funds been used?
There are several public projects that the Village has used TIF funds for within the downtown area. The Village commissioned a guide for refreshing the streetscape along Hillgrove Avenue. One of the recommendations of the guide was the installation of the bistro tables for the Tower Green area. The planting areas along Hillgrove Avenue were also updated through the removal of the deteriorated cement planters and installation of new landscaping.
To date only one development has received TIF funds. The Foxford Station development (4441 Wolf Rd.) applied for and was granted TIF funding for streetscape improvements such as landscaping and planters, utility service upgrades, streetlights, and other eligible costs related to the development. The TIF was established as a "pay-as-you-go" funded district, which means that incremental tax revenues are used to pay the developer. No bond or other debt financing was issued to pay for the developer. As such funds are generated through year-to-year increases in the EAV of the district funds are dispersed to the developer.
Pending TIF Requests
The Village is currently reviewing a request for a development within the Downtown North TIF District. The property at 514 Hillgrove Avenue is being developed with a mixed-use building comprised of two commercial units on the first floor and 10 residential units between floors two and four. Similar to the Foxford Station request, the applicant is requesting TIF funds for improvements within the Hillgrove Avenue right-of-way, utility upgrades, and other TIF eligible costs. The Village's Economic Development Commission (EDC) reviewed the request on July 31, 2023 (LINK) and made a recommendation (LINK) to the Village Board. The application and the recommendation of the EDC is then reviewed by the Village's Finance Committee. The application is then considered by the Village Board, along with the recommendation of the EDC and the Finance Committee's discussion. The Village Board will then make the final determination on the request.
Property Improvement Grant Program
The Village is considering adopting a property improvement grant program to assist property owners and tenants in funding improvements to the existing building stock located within the downtown TIF Districts. Please click here [LINK] for more information.