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A proposed new tax-increment financing (TIF) district, located at the Chicago/Main intersection and encompassing much of the Main Street shopping district, sailed through the introduction stage on the City Council’s consent agenda on Aug. 13 without debate or discussion. City staff labeled the area as “threatening to become blighted,” making it TIF-eligible and set a December 2012 timeline for full passage of TIF-related ordinances.
The next step will be to convene the Joint Review Board, which is composed of all taxing bodies, such as the two public school districts, with a stake in the property taxes generated by the site.
Under state law, property tax revenues in a TIF district are split. The base amount, the amount levied on the property before it is improve, is distributed as before among the taxing bodies. The increment, the additional tax revenue generated by improvement to the site, remains with the City to be used on infrastructure and other specified improvements – including “public-private” projects – within the TIF district.
An area may qualify as a TIF districts for several reasons: being currently blighted or at risk of becoming blighted (“conservation” areas), according to a staff memo. Under state law, in order to qualify as a TIF conservation district an area must demonstrate a number of “factors.”
The Chicago-Main area, one of the central shopping district in the City, qualifies as near-blighted, according to Kane-McKenna, the consultants hired by the City to evaluate and make TIF recommendations, for six reasons:
First, equalized assessed value has declined relative to the rest of the City in three of the last five years. In the other two years, the EAV outpaced the City. Second, “inadequate utilities.” The water and sewer infrastructure is over 100 years old. Third, obsolescence, “as manifested in part by lagging EAV.” Fourth, “deleterious layout” mostly caused by difficulty created by the two rail lines in the area, parking shortage, and “minimal buffering between commercial and residential uses.” Fifth, there is an overall “lack of community planning.” Finally, “deterioration,” much of which was found in “alleys and parking lot behind the stores located on Main Street” where “weed growth was observed” and in the Metra bridges.
The TIF, if passed, lasts for 23 years. Johanna Nyden, economic development coordinator, said the district boundaries had been drawn to exclude newer buildings. Just two blocks to the south of the district, a brand new AMLI development is nearing completion, funded by private investment.