Proposed Main/ChicagoTax Increment Financing (TIF) District
City of EvanstonPublic Hearing
November 12, 2012
Chicago/Main TIF
TIF will give City ability to:
1. Invest in necessary infrastructure in Main/Chicago neighborhood;
2. Participate in public/private partnerships; and
3. Encourage transit-oriented development and improvements.
Plan for Implementation
• Guide for implementation of the Chicago/Main TIF District
• Four Major Areas of New Investment– Transit-Oriented Development– Public Infrastructure– Open Space; and– Private Development.
• Neighborhood Meeting for January 2013
Proposed TIF BudgetProgram/Improvements Estimated Costs
Land Acquisition, Assembly, Relocation $2,500,000
Site Prep, Remediation, Demolition, Site Grading $2,500,000
Utility Improvements $6,000,000
Rehabilitation of Existing Public and Private Structures;Taxing District Capital Improvements
$5,500,000
Public Facilities (Incl. Parking & Streetscaping) $4,500,000
Interest Costs Pursuant to the Act $2,000,000
Professional Service Costs $1,000,000
Job Training $500,000
Statutory School District Payments $500,000
TOTAL ESTIMATED TIF BUDGET $25,000,000
Proposed Chicago/MainTax Increment Financing (TIF) District
City of EvanstonOctober 2, 2012
Overview
I. Background on Proposed TIF District/Plan for Chicago/Main Corridor
II.Factors Qualifying Area as a TIF DistrictIII.Key Elements of TIF Plan
• The Chicago/Main TIF Area – One of the City’s oldest and important commercial/mixed use areas;
situated outside of the downtown district– Relatively dense land use, with multiple land uses
• industrial, residential, commercial, and transportation-related uses
– Area may be at an “inflection point” whereby it either continues to stagnate or it rebounds
• Strategic Importance – Important space for southern Evanston residents– Chicago/Main is a commercial and transportation center that for
decades has provided shopping options for nearby residents (including multi-family dwellings) and commuters
– Based on location and transportation assets, has potential for success and renewal
I. Background
The TIF Plan complies with key legal provisions of the TIF Act, including but not limited to:– TIF Plan conforms to the City’s Comprehensive Plan– Area consists of contiguous parcels – exceeds 1 ½ acres– “But-for” requirement is met - Redevelopment is feasible
only with the utilization of tax increment financing• As documented in the TIF Qualification Report (Appendix V of the
TIF Plan)
I. Background
I. Background
• City has considered alternative economic development tools, with only limited success
• The City has considered, in succession:– Ad-hoc use of financial tools other than TIF– “Corridor studies”– Now considering TIF
I. Background
I. Background
Review of TIF FinancingTIF involves splitting property tax revenue generated from properties within the TIF District into two components or “buckets”:
Bucket for Base Revenues – For All Local Governments
Bucket for Incremental Revenues – For Redevelopment within TIF
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
1 2 3 4 5 6 7 8 9 10
Year
As
se
ss
ed
Va
lue
(A
V)
Year Base AV Total AV
I. BackgroundReview of TIF Financing- Ideally, a successful TIF produces positive incremental revenue over
time
TIF Performance Adjusted for Project-Related Risks
0
20
40
60
80
100
120
140
160
180
200
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Base EAV Total EAV - Adjusted for Market Factors
Delay in Project Absorption
Reduction in Growth
I. BackgroundReview of TIF Financing- In practice, a successful TIF faces certain challenges in seeking to generate positive increment
ASS
ESS
ED
VA
LU
E
YEAR
• The proposed TIF District is found to qualify under the following criteria:– Improved property - As a “conservation area”, based
upon the findings that:• A combination of 3 or more of the 13 factors set forth in the TIF
Act are present in the areaAND
• A majority of structures (83%) are 35 years or older
II. Qualification Factors
Improved Property – Conservation Area Findings Underlined
8. Inadequate Utilities9. Excessive Land Coverage10. Deleterious Layout11. Environmental Clean-up12. Lack of Community
Planning13. Lagging EAV
II. Qualification Factors
1. Dilapidation
2. Obsolescence
3. Deterioration
4. Presence of Structures Below Code
5. Illegal Uses
6. Excessive Vacancies
7. Lack of Ventilation and Sanitary Facilities
Lagging EAV
II. Qualification Factors
2011 2010* 2009 2008 2007* 2006
Total EAV for TIF District
11,489,118 13,387,919 13,162,887 14,012,954 13,595,805 10,413,394
EAV Change (%)
-14.18% 1.71% -6.07% 3.07% 30.56%
City-wide EAV (Excluding TIF)
2,715,878,455
3,028,496,168 3,292,826,482
2,924,384,938
2,758,744,224
2,235,479,352
City EAV Change (%)
-10.32% -8.03% 12.60% 6.00% 23.41%
CPI
3.2%
1.6%
-0.4%
3.8%
2.8%
Deterioration
II. Qualification Factors
Deterioration
II. Qualification Factors
Deterioration
II. Qualification Factors
Deterioration
II. Qualification Factors
Deterioration
II. Qualification Factors
Deterioration
II. Qualification Factors
Improved Property – Conservation Area Findings Underlined
8. Inadequate Utilities9. Excessive Land Coverage10. Deleterious Layout11. Environmental Clean-up12. Lack of Community
Planning13. Lagging EAV
II. Qualification Factors
1. Dilapidation
2. Obsolescence
3. Deterioration
4. Presence of Structures Below Code
5. Illegal Uses
6. Excessive Vacancies
7. Lack of Ventilation and Sanitary Facilities
• Base EAV: $11.49 million (2011 EAV)• Projected EAV: Upon completion of redevelopment and
“re-tenanting,” approximately $30,000,000 to $35,000,000
• Proposed TIF Budget: $25,000,000 (see next slide)– The TIF Budget is:
• A maximum amount which does not obligate the City to expend such amounts
• Sized to accommodate potential development requirements• 23 year budget, not annual budget
• Proposed Land Uses: Retail, commercial, institutional, and residential uses
• Key “But-For” Finding– Redevelopment will not go forward without the TIF assistance
III. Key Elements of TIF Plan
• A TIF Plan…..– IS
• A general framework for economic development• Authorizes but does not require expenditures in certain
broad categories– IS NOT
• A detailed “blueprint” or strategy document (the 2000 Corridor Study and Economic Development Strategy Document fulfills that role)
• A document mandating expenditures– City Council would have to authorize funding of specific
economic development activities under separate ordinances
III. Key Elements of TIF Plan
BudgetProgram/Improvements Estimated Costs
Land Acquisition, Assembly, Relocation $2,500,000
Site Prep, Remediation, Demolition, Site Grading $2,500,000
Utility Improvements $6,000,000
Rehabilitation of Existing Public and Private Structures;Taxing District Capital Improvements
$5,500,000
Public Facilities (Incl. Parking & Streetscaping) $4,500,000
Interest Costs Pursuant to the Act $2,000,000
Professional Service Costs $1,000,000
Job Training $500,000
Statutory School District Payments $500,000
TOTAL ESTIMATED TIF BUDGET $25,000,000
• Budget Guidelines– Overall budget cannot be exceeded– Line-items in budget are flexible – Covers 23 years; hence difficult to estimate with precision– Budget expenditures subject to:
• City approvals• Determination of appropriateness of costs• Special TIF audit • Review by JRB annually
III. Key Elements of TIF Plan
Next Steps
• Introduction and Adoption of TIF ordinances: within 14-90 days after the Public Hearing – Subject to additional review/approval by City Council– Two open meetings with opportunity for additional public
comment
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