Tax Increment Financing (TIF)
Tax Increment Financing (TIF)
Local Development Incentives
Tax Increment Financing (TIF) incentives are designated sets of funds limited to specific areas in the City of Berwyn. Berwyn currently has three TIF districts and can be used to help you get your business off the ground. Through our comprehensive TIF program, the BDC provides redevelopment assistance to support property improvement and building activities, including acquisition, demolition, infrastructure, interior & exterior renovations, signage and site work.
Contact Division Director of Economic Development and Planning Services, Brett Michaelson at 708-749-6582 or firstname.lastname@example.org, or Executive Director of the BDC, David Hulseberg at 708-749-6580 or email@example.com to learn more about using local TIF incentives.
Roosevelt Road TIF
Harlem Cermak TIF
Depot District TIF
Additional TIF Information
Frequently asked questions:
Q: What is the Aldermen’s position on extending the TIFs?
A: Nothing has been officially voted on, but there has been unanimous support in favor of extending the TIFs thus far. The BDC intends to present our recommendation at the Committee of the Whole meeting on November 13.
Q: Would the extension expand the boundaries of the TIF Districts?
A: No, the extension of a TIF District only extends the duration of that TIF. While boundaries do not change, the extension will allow the TIF to remain active for up to an additional 12 years.
Q: How do we manage the debts within TIF Districts while leveraging funding for new development without affecting the City’s budget?
A: The City has the ultimate authority to establish a responsible budget for TIF funds. The BDC is recommending two programs which will directly benefit the business community. These new programs are the Finish Line Grant and “pay as you go” programs which will be established through the TIF to spur new development. The finish line grant program is proposed to be a 50/50 matching program where certain improvements made by a business property owner will be reimbursed up to $5,000. Whereas, the pay as you go program would provide up to 20% of a project cost reimbursed to a business owner for certain improvements provided that they generate new tax increment above the existing base.
Q: How does TIF funding benefit business owners and taxing bodies when a significant portion of the increment goes toward City debt?
A: TIF allows for many public amenities such as streetscape and infrastructure improvements that increase property values and create inviting spaces. These improvements attract visitors and enhance the overall character of community. New incentive programs will also be established with the TIF extension that will help to facilitate rehabilitation projects for businesses within the TIFs. Finally, new state legislation has passed that will help offset any contribution to the increment by school districts.
Q: Why should taxing bodies continue to contribute funding to TIFs?
A: The City is typically the only local governmental unit that provides for economic development. The TIF allows economic development to be shared between all the governmental units. Aside from the above-mentioned benefits, many of the expenses covered by TIF funding will still exist, with or without the existence of TIF districts. If the Roosevelt and Depot TIF districts expire, many of these costs will shift and become the responsibility of the City. As there are no new revenue streams for these costs, they will be accounted for by the City’s general revenue. These previous TIF costs will therefore be competing for funding against other City services and amenities, such as police and fire.
Q: How does the extension get approved?
A: If City Council approves the recommendation to move forward with the extension of the TIFs, we must then gain the support of all taxing bodies affected by the Roosevelt and South Berwyn (Depot) TIFs. This support must be unanimous to move forward for the respective TIF. With the support of City Council and the taxing bodies, the extension must then be approved by the State Legislature and signed by the Governor.
Q: How is the TIF budget established/who establishes the TIF budget?
A: The BDC will reach out the City to first gain a better understanding of the priorities of Council members to establish a recommended TIF budget. The BDC will present the budget and plan to the Joint Review Board for recommendation. The City Council has final approval.
Q: How would an economic downturn affect our ability to benefit from TIF?
A: Economic downturn would impact the increment above the base as property taxes fall within each TIF. However, we have several tools available to address these issues. In the past, whenever an individual property is reassessed to create a drag on the TIF increment, the TIF boundaries can be edited to remove that specific property (or properties). Additional properties cannot be added to the TIF but can always be removed as the need arises. Additionally, if it is deemed detrimental to continue the TIF district, it may be ended at any time by City Council.
Q: In the event of an economic downturn, is it beneficial to have TIF?
A: In the event of an economic downturn, it is safe to assume that development projects involving real estate rehabilitation and business investment will slow. The TIF district allows us to respond to these market factors and create additional programs such as business expansion grants or “pay as you go” property development agreements. These targeted programs act as a catalyst and can help to stabilize the property market within the TIF. TIF districts can provide a highly effective tool that the City and the BDC can utilize to mitigate economic downturn.
Q: Are TIF funded projects typically paid for up front?
A: Disbursement of TIF funds varies across municipalities, but we intend to move forward with a “pay as you go” approach in order to ensure that projects are completed, and property owners put forth the equity and commitment to overall improvements.
Q: Does the BDC pick and choose which projects are presented to City Council? If so, what is their criteria?
A: The BDC accepts and reviews all TIF project applications. Each application for TIF assistance will be evaluated based on short- and long-term economic development impacts, adherence to the City’s plans, priorities and goals, public benefits provided, amount of public assistance compared to private investment, term of public assistance and risks associated with the project. Priority will be given to development projects that facilitate increased permanent employment with family-supporting wages or expanded commercial opportunities.
Q: How are projects approved for TIF?
A: After a project is reviewed by the BDC, it is then brought to City Council for approval. The BDC follows specific guidelines during the vetting process to ensure that each project meets requirements established by State Legislature.
Q: What is the difference between the BDC’s Commercial Loan Program and TIF?
A: The Commercial Loan Program is independent from TIF and works to provide small businesses and startups financial assistance not otherwise available through traditional financing. The aim of the program is to leverage these funds to invest in our community, create jobs, and stimulate redevelopment of aging properties. Permitted uses of loan funds include construction, real estate acquisition, rehabilitation, and working capital expenses, among others. Applications are vetted by representatives from seven local financial institutions that also provide the lines of credit to fund these loans.
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