Tax Increment Financing

What is a TIF District?

TIF Districts use the incremental increase in property taxes to pay for land acquisition, building rehabilitation, public improvements, job training and site improvements. The term lasts for 23 years after the creation of the TIF district at which time all taxing bodies receive all of the property taxes generated by the area. TIF districts do not create any additional tax to any property owner.

How does a TIF District work?

  • During the TIF period, the incremental increase in property tax can be used for TIF eligible expenses as an economic incentive tool.
  • Taxing bodies continue to receive the same property taxes from the area as they did when the TIF district was created.
  • At the conclusion of the TIF (23 years), all taxing bodies will receive the full amount of property taxes generated by the area, as described in the chart below.

TIF Diagram

What is the boundary of the proposed TIF District?

  • Includes 243 properties; 68 commercial, 4 farm, 10 industrial and 161 residential.
  • Includes 195 acres
  • Equalized Assessed Value (EAV) of area is $8,998,684
  • Currently, $1.15 million in property taxes is being generated in the proposed TIF area for all taxing bodies.
    • View the TIF District Boundaries here

How does an area become eligible for TIF Funding?

Illinois TIF law specifies a number of requirements that must be satisfied for an area to qualify as a TIF district, beginning with identifying the district and the physical and economic deficiencies that need to be cured.  The TIF area must be blighted, or 50% of the structures must be older than 35 years and have some blighted condition, or there must be a relatively high level of unemployment.  

How does a project become eligible for TIF Funding?

Each redevelopment agreement is examined to determine if the “but for” criteria is met. "But for" the incentive provided by the TIF, the development would not occur in the designated area. Evidence that the district satisfies the “but for” test must be provided in all redevelopment agreements.  An example of this is listed below:

SAMPLE TIF DISTRICT DEVELOPMENT PROPOSAL

 

With TIF

Without TIF

Private Equity Investment

$5.4 m

$5.4 m

Private Loan

$15.9 m

$22.4 m

TIF  Investment

$6.5 m

0

Net Operating Income in Year 11

$1.1m

$320,088

Internal Rate of Return

14.0%

(12%)

Who should I call for more information?

For more information regarding the Village of Lake Villa's proposed TIF District, please contact Karl Warwick, Village Administrator at kwarwick@lake-villa.org or at (847)356-6100.

Contact Us

Village Hall (more)
65 Cedar Ave
P.O. Box 519
Lake Villa, IL 60046

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