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Tax Increment Financing

In March, 2017, the Village Council began reviewing its implementation process for the 2016 Downtown Master Plan (DMP), including possible financing strategies to fund improvements in Winnetka's business districts. One of the financial strategies the Council desired to further discuss was Tax Increment Financing (TIF).Downtown_Boundary

TIF is a program that allocates future increases in property taxes for a designated area, or TIF district, to pay for improvements within that area. In Illinois a TIF district can remain in place for up to 23 years after its creation. Normally, property is taxed by several different governmental jurisdictions:  the municipality, School District, County, Park District, Water Reclamation District, etc. The taxes levied are allocated to each district in accordance with its tax rate.  Under TIF, the property taxes resulting from increased value due to new development, rehabilitation or improvement, property appreciation, equalization, or rate changes, are all allocated to the municipal TIF fund. Other jurisdictions continue to receive the property taxes generated by the base value of properties in the district prior to the TIF designation.

All properties in the district are assessed in the same manner as all other properties and taxed at the same rate. TIF is not an increase in taxes. It is only a re-allocation of how the increase in tax revenues are used. Increases in property taxes experienced by property owners are due to reassessment and rate increases, not TIF.

Based on Council direction from March, in April, 2017 the Village Council reviewed Staff's recommendation to hire Ehlers & Associates for TIF advisory services.

April, 2017 Update:

The proposal from Ehlers & Associates outlined TIF implementation in three Phases, including: Phase I- Feasibility Analysis; Phase II- Preparation of the Redevelopment Plan; and Phase III- Adoption of the Project . As the Council wishes to explore TIF, the Village engaged only in Phase I of services from Ehlers.  The first phase of work will help the Village understand if the project area meets TIF area criteria.

July, 2017 Update:

Ehlers & Associates completed and presented the TIF Feasibility Report for the Council. Ehlers studied the eligibility designation for a project area mostly conforming with the boundaries of the Elm Street Business District; the area includes 41 acres. Of the four potential classifications available under the TIF Act, Ehlers recommended applying the "Conservation Area" category. Their findings concluded the Downtown Study Area is eligible for TIF designation as a Conservation Area.

For detail on the five Conservation Area criteria the TIF was found by Ehlers to meet, please see the July 11, 2017 Agenda materials below. For a study area to qualify, the TIF Act specifies it must meet three (3) of  thirteen (13) conservation criteria.

The Council also reviewed the projected potential tax increment revenues with Ehlers; the projection for the twenty-three (23) year life of the TIF is also available in Agenda materials. At the conclusion of the meeting, the Council authorized Ehlers to continue assisting the Village in evaluating a TIF District by beginning Phase II work.

Click here to see a Boundary Map of the Downtown Study Area's project boundaries.

October, 2017 Update:

Ehlers & Associates made a presentation about the necessary components of Phase II work, focusing on the Redevelopment Project Goals and Budget. This included a discussion of TIF-eligible expenses as well as the budget requirements. Council directed Staff to provide additional detail on potential projects and improvements in the Downtown Study Area that could have application for TIF funds.

December, 2017 Update:

The Village Council reviewed projects and improvements that would be eligible expenses for a TIF District. This discussion will help to form the cost component of a TIF Redevelopment Plan. In addition, they discussed the timeline of their TIF evaluation.

Past Council Action:

Other TIF Materials & Resources:



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