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- Tax Increment Financing District (TIF) - Green Bay Road Redevelopment Project
Tax Increment Financing District (TIF) - Green Bay Road Redevelopment Project
- TIF Quick Facts
- TIF Frequently Asked Questions
- Redevelopment Plan & Project for the Green Bay Road Redevelopment Project
Tax Increment Financing (TIF) Quick Facts
- Our school districts will not lose any money due to the proposed TIF District. In truth, the TIF is designed in part to increase school revenues over the long run.
- The Village Board has not discussed the issuance of bonds for revenue generation. In fact, the Village Board has discussed taking a slow and measured approach to any development.
- Should a landowner approach the Village Board with a project, the approval of that project MUST be done in a public meeting. Fact - A TIF District does not supersede the requirements of the Illinois Open Meetings Act.
- The Village restricts commercial buildings to no more than 35 feet or 3.5 stories, or with special use granted by the Zoning Board no more than 40 feet in height. There will be no high-rises coming to Kenilworth.
- There is a possibility that the eminent domain regulations may grant the Village additional authority in a TIF District. Therefore, if the Village Board adopts a TIF District, language will be included to forbid the use of eminent domain authority upon residential properties within the TIF District.
- A TIF District does not give the Village new authority to secretly issue debt. The fact is that the Village has had authority to issue debt for decades and chooses to use that authority conservatively and wisely.
- The expenditure of all TIF Fund dollars must be approved by the Village Board and the financial activity will be audited on an annual basis.
What is a TIF District?
- It is an area identified by the Village that is in need of redevelopment due to declining conditions and tax base.
- Incremental increases to property taxes from within the district are reinvested in that area in an effort to stimulate improvements.
- The goal is to provide a temporary financial stimulus to the redevelopment area that otherwise would not occur.
- The planned redevelopment may be in effect for 23 years but can be retired sooner.
Why do we need a TIF?
- Our Business District has been showing signs of decline for quite some time.
- A healthy Business District contributes more to property taxes, reducing the pressure on residential property taxes.
- Improvements have not come on their own and creating a TIF is a way to spur growth.
- A TIF District is the best tool to achieve the goal of improving the Business District.
What it Does
- Acts as an economic development tool to encourage revitalization and redevelopment within an area lagging in economic vitality.
- Directs the incremental growth in tax revenues based on improvements that grow a TIF District's EAV solely to the TIF District.
- Requires a formal budget and annual audits to track expenditures and activity.
- Ensures that received funds are utilized to improve the district.
What It Does Not Do
- Limit the budgets or taxing authority of other taxing bodies.
- Give the Village new authority to issue bonds.
- Give the Village new authority for eminent domain.
- Decrease tax revenues from current levels in the TIF District for other taxing bodies.
- Change the Village's obligation for public meetings, budgeting, and auditing of financial records.
How Big is the TIF District?
- The area is relatively small at approximately 15 acres.
- It represents just 0.23% of the New Trier High School District's Equalized Assessed Valuation and 4% of the Village.
- It provides approximately $1,000,000 of tax revenues for all taxing bodies.
- $411,613 to Joseph Sears School
- $236,100 to New Trier High School District
- $160,360 to the Village
- The Goal is to increase the health of the TIF District so the $1 million of support grows to $3.6 million over the life the TIF District.
Tax Increment Financing (TIF) Frequently Asked Questions
What is a TIF?
The simple answer is that it is an economic development tool that provides financial resources for Villages to improve an area that is in decline. The goal being to revitalize the area that, but for the TIF, would likely continue to decline. The acronym stands for Tax Increment Financing District and it is enabled by the Tax Increment Allocation Redevelopment Act.
Why do we need a TIF District?
Our business district is in a state of decline and absent intervention from the Village, it is believed that the declining conditions will continue. This state of decline was noted by the group of resident volunteers that helped craft the Village’s Comprehensive Plan in 2008 (reference page 28 of the Comprehensive Plan). Now, some 11 years later the conditions have not improved and the business district is negatively impacting property taxes for all residents.
Why is the business district in decline?
There is no single factor causing the decline, so the answer is complex. Likely causes include: age of buildings, narrow lot depth, lack of adequate parking, lack of pedestrian orientation, and strain on the retail markets.
With retailers moving away from brick and mortar stores, can we achieve our goals?
We certainly believe that the revitalization of our business district can be achieved, even in today’s market. Having a TIF district provides the Village with important economic development tools that can help minimize or eliminate impediments to development that currently exist. The improvements will not occur overnight, but more likely in a slow and steady fashion over many years.
Why are there residential properties in the TIF if we are hoping to improve businesses?
There are many reasons for this, but foremost it is for the benefit of those homeowners. Having property within the TIF overlay allows those homeowners to have access to financial resources that can help improve their property, fund modifications that add screening and landscaping, and even make the property more attractive to potential future owners.
Is the Village really issuing $23M of bonds?
No! The Village Board has not discussed issuing bonds for the TIF District. The Board has discussed taking the “pay-go” approach where projects are not initiated unless funds are in-hand to pay for the improvements. This does not preclude the Village loaning the TIF Fund money from available fund balances (our savings account) with a payback plus interest. The creation of a TIF District does not give the Village Board new authority regarding the issuance of bonds.
Is it true that the Village is planning on taking homes and constructing parking lots?
No, it is not. The Village Board of Trustees has not discussed that, nor has any developer proposed that to the Village.
Does the TIF district allow the Village to kick people out of their homes?
No. When this question comes up, people are often thinking of the state-granted power of eminent domain. Each community in Illinois has the power of eminent domain for the taking of land for public purposes. To the best of our knowledge, the Village has never applied that authority and to do so would be contrary to the vision and approach of your Village Board.
Do properties in the TIF District pay different taxes?
No, property owners within and outside of the TIF boundary are taxed exactly the same way by the County Assessor. To the property owner, being in or out of the TIF area would be practically invisible on the tax bill.
Does the TIF mean that the school districts don’t get any additional tax revenue?
The school districts will receive their tax levy in exactly the same manner that they have previously and their revenue will not be diminished. The TIF Act even provides an opportunity for the schools and library to receive per student payments for any new students created by the TIF. The only exception to the school levy would be any amounts generated for “new property” within the district. Those new property funds would be tolled until the end of the TIF District, at which time the funds would then be available to all taxing districts.
If it is created, how will the TIF District affect me as a homeowner?
That question has multiple facets to the answer.
- Regarding property taxes, in the short term the impact will be dependent upon how much the taxing districts increase their levy. If their levy does not increase, your property taxes would not change at all due to the TIF District. If the Joseph Sears School district were to raise their levy by 1%, homeowners would pay approximately $4.82/year more. In the long term, by increasing the overall value of properties within the TIF District, the potential to generate an additional $2.6M exists. If this revenue were available today, the burden upon residential property taxes could be reduced by roughly $2,800/home on average.
- Regarding the business district, the goal is for the TIF District to become a vibrant gathering place for residents and visitors to dine, shop, and gather. Having these new places within walking distance to your home would add value to living in Kenilworth.
- Regarding home values, the goal is to generate more property taxes from the business district, thereby decreasing overall property taxes, provide a vibrant business corridor, and help generate a new gathering place for the community. As a result, living in Kenilworth will have added value to current and future residents.
How long has the Village been discussing a TIF District?
The Village Board has been looking at TIF as an option to improve the business district for approximately one year.
Is there a way to achieve the goals without a TIF District?
We believe that this is the only viable alternative. The wait-and-see approach has not worked and other options were considered. However, those options would increase the tax pressure on an area already in decline.
What properties does the Village intend to redevelop?
At this time, the Village has not been approached by any developers with a request to assist in redevelopment activities. Also, the Village does not have any property identified for development aside from the potential to develop the new property on the west side of Green Bay, south of Roger Avenue. If either a property owner or group of property owners are interested in a redevelopment, they are encouraged to contact the Village to discuss their goals. Until then, the Village will use the 2008 Comprehensive Plan to help guide decision making.
How can TIF funds be used?
The general answer is only upon things that are intended to redevelop the land within the TIF District. The TIF Act establishes requirements for allowable TIF fund expenditures which may include: façade improvement grants, streetscape improvements, new street lighting, new sidewalks, environmental remediation, remodeling expenses (to some extent), and the purchase of real property. Please refer to our Redevelopment Plan and Program which may be found by following a link on the TIF page of the Village website.
Who controls how the TIF funds are used?
The Village Board does. This is done through the annual budgeting process whereby the Village Board authorizes projects and general categories of expenditures, approves expenditures on a monthly basis, and undergoes an annual audit process.
So, what is a real world example of TIF funds being used for redevelopment?
For example, a restaurant owner wants to lease a property to locate a new restaurant in the Village. The intended space has never been occupied by a restaurant and therefore needs a number of enhancements such as a vent hood, automatic fire suppression system, and remodeled restrooms. However, neither the property owner nor the restauranteur have the resources for the improvements. The TIF Fund could help fund some of the remodeling necessary to bring in the new restaurant if the Village Board so approved.
Who checks to ensure that the funds were properly used?
There are multiple levels of control regarding expenditures. The control points include the Village Manager, Village Board, Village Treasurer, Joint Review Board (which meets annually to review TIF activity), and finally the audit process. Additionally, the Village must file annual reports to the state Office of the Comptroller that detail TIF Fund financial activity.
What if the TIF District does not improve and the redevelopment project stalls for an extended period?
Ultimately, if the Village Board determines that the TIF District is not generating revenue and thereby showing signs of revitalization, the Village Board may elect to terminate the TIF District early. It would be better to terminate an underperforming TIF District and start again at a future time, rather than maintaining an ineffective effort.
What is the Redevelopment Plan?
The Redevelopment Plan and Program is a document that is required by the TIF Act to generally outline the goals of the TIF District. It is not a plan that determines what is intended to happen at each property within the TIF District. Rather, it outlines the purpose of the plan, general land use plans, estimated project costs, and sources/uses of funds. The Redevelopment Plan does not consider an individual parcel, nor does is establish the underlying zoning for any parcels.
Will the TIF District reduce the property taxes received by the schools?
No. The school districts will continue to receive their levy amounts just as they had prior to a TIF District. The only change would be to any “new property” growth that would come from within the TIF District. This new growth would not be received by the schools until the TIF District is terminated.
Why does the value of the business district matter to us?
Think of property taxes as filling a bucket with water. Every property in Kenilworth must contribute some amount of water to the bucket to fill it up. An unhealthy business district does not provide as much water to the bucket as a healthy one. Therefore, the residential properties must each provide more water to make up for the shortage. The Village’s goal is to increase the amount of water contributed by the business district, thereby decreasing the amount that individual homeowners must supply.
What if we don’t do anything regarding the business district?
Indications are that, absent the TIF, the area will continue to decline, vacancies will continue to increase, and the pressure on residential properties to pick up the additional property taxes will increase.
If a TIF District is established, what happens next?
The Village President and Trustees will hold public meetings to discuss and prioritize the needs of the business district, work to establish a budget, and establish a 3-year plan for capital needs. During that time, the Board will also respond to any requests from property owners for access to redevelopment incentives.
Where can I find more information?
The Village website offers links to a number of information sources. The state Office of the Comptroller and Cook County are also excellent resources for independent information.
Redevelopment Plan & Project for the Green Bay Rd. Redevelopment Project
The Village’s Comprehensive Plan of 2008 envisioned a Green Bay Road Corridor that was transformed into a vibrant and attractive mixed-use pedestrian-oriented district reflecting the Village’s overall character and quality, which provides opportunities for alternative housing options for Village residents, and maximizes the opportunities to diversify and strengthen the tax base by maximizing revenue opportunities.
In the 11 years since the adoption of the plan, the vision for the corridor has not come to fruition. Over the past year, the Village Board has been investigating options to revitalize the long-stagnant business district. The option currently under consideration is a redevelopment plan and project for the Green Bay Road and Park Drive business district area, funded from the proceeds of a tax increment financing (TIF) district. Since the vision articulated in the 2008 Comprehensive Plan has not come to fruition on its own, the Village Board is now seeking vehicles to spur growth in the business district. It is hoped that, by making some strategic investments in the district, a seed of growth may be planted which will help revitalize the Green Bay Road and Park Drive corridor. A strong business district can help relieve pressure on residential property taxes and diversify the Village’s tax base.
If you are not familiar with what a TIF district is, please let us reassure you that it is not a method to increase property taxes at a faster pace than the non-TIF properties. A TIF district does not increase property taxes or change the amount of taxes you pay now or in the future. Rather, a TIF district is a financial tool that sets a base for today’s property taxes. Then, moving forward as property taxes increase for all properties in the Village, the entire increment (amount above the base) from within the TIF district boundary is directed to a special fund for use only within the TIF district. In essence, it is an economic development tool that allows the Village to set aside incremental property taxes to the benefit of the area within the district. Please consider reading the Green Bay Road Redevelopment Plan (linked below under “Documents”) to learn more about the effort.
The information contained herein is intended to provide those interested in learning more about the process of easy access to information. This page will be updated periodically as information is available. However, the TIF Act requires specific notifications and processes which shall serve as the official notifications from the Village.
As always, please feel free to call us with any questions that you may have.
|Joint Review Board||April 17, 2019 - 10:30 AM||Kenilworth Village Hall|
|Joint Review Board||May 8, 2019 - 10:30 AM||Kenilworth Village Hall|
|Public Hearing||May 20, 2019 - 7:30 PM||Kenilworth Village Hall|
|Village Board Discussion of Ordinances||June 17, 2019 - 7:30 PM||Kenilworth Village Hall|
|Village Board Vote on TIF Ordinance||July 15, 2019 - 7:30 PM||Kenilworth Village Hall|