The city has been discussing establishing a tax increment
financing district since March, when the idea was brought to the
council by Lisa Kramer of Prairie Engineers and John Myers of Rabin
& Myers in Springfield.
Snyder told the council he wanted to do
some artwork for them, drawing a picture of how a TIF district could
benefit the city.
Recently the city approved a preliminary downtown revitalization
plan and hired Kramer and her firm as the city's consultants on the
The revitalization plan is being funded by a $675,000 grant the
city won from the Illinois Department of Commerce and Economic
Snyder began by creating a space for the revitalization plan at
the bottom of his page. He explained that the plan was the first
step and the foundation for enhancing the downtown area.
Of the grant awarded for the project, approximately $336,000 will
be used for the development of the plan.
Because the city has to provide a local match of $100,000 with
the grant, Snyder explained there will still be just over $400,000
remaining that can be used for implementation of programs that come
from the plan.
He drew the first section of a bar graph on the left-hand side of
the page and said it represented the implementation.
To the right of that bar he drew a second one and marked it with
the figure of $1,800,000.
Snyder explained the figure represents a grant the city is
applying for that would go toward the downtown revitalization
projects. This grant is strictly for implementing projects that can
be undertaken according to the revitalization plan. He said the
dollars involved would cover the cost of rehabilitation of 20 blocks
of the downtown area and would have to be spent within three years
of the award.
He recalled to the council the streetscape plan that was
introduced in August of 2010 by the city and Main Street Lincoln.
The plan presented at that time was a draft of what the city could
do and was not a set-in-stone plan.
Snyder said the money could be used to implement that plan or
Lastly, he drew a bar to the far right and indicated it
represented dollars that could be earned from establishing a TIF
He told the council that while the first grant will expire in
2013, and the second, if won, lasts only three years, the TIF
program has a shelf life of 23 years.
The advantage to the TIF money is that it is less restricted on
how it may be used.
For example, the first grant for the revitalization plan
stipulates that the money must be used primarily for developing a
The second grant, if won, would have restrictions on the types of
projects it can be used for, and the city will not be allowed to
stray from that for fear of losing the grant.
The TIF dollars, however, would be under the city's jurisdiction,
and the city would have much more control over what the money is
The primary restriction with the TIF is that it is for
rehabilitation in the downtown area.
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How the city will make money from the project is in the increase
in property tax revenues from rehabilitation of downtown structures.
It had been mentioned in March and was repeated last week that
right now property assessments in the downtown area are down
considerably, primarily because of the age and condition of many of
The TIF would provide financing to business or building owners to
do needed structural and cosmetic repairs on their properties. Once
those projects were completed, hopefully the assessed value of the
buildings would go up.
The city would be allowed to claim the increase in the tax
assessment. Snyder said the city would have a base year they worked
from. As property values increased, the new assessment would be
weighed against the assessment of the base year, and the city would
claim the difference.
Snyder said, however, that before the city can establish a TIF, a
feasibility study needs to be conducted to determine if the city
should establish a district.
Kramer and Myers have proposed to do the study. In doing so, they
will map out the city in grids and go from building to building,
determining whether or not that particular structure would qualify
When Myers visited the council in March, he provided a "TIF
Primer" that outlines how the district would or could be
In his primer he offered the following abbreviated definition of
how a structure would qualify as a "Rehabilitation TIF District."
2. How Property
Qualifies For TIF Treatment
The list of
qualifying factors for a TIF is long and complex (see Exhibit A to
this primer for how a "blighted area" TIF qualifies), but it boils
down to this: The property must have some combination of old and
obsolete structures on it, inadequate utilities, obsolete platting,
environmental problems, and declining value. Normally, a TIF
consultant analyzes each and every separate parcel in a proposed TIF
District to advise the sponsoring municipality whether the proposed
district as a whole qualifies. This is where the TIF consultant
earns his or her fee!
Snyder told the council Tuesday night that the first step needs
to be the feasibility study, and he would like the aldermen to vote
on whether or not to hire Kramer and Myers to do the study. The cost
would be $25,000, plus an additional $10,000 will be needed for
legal and engineering expenses for work that would have to be done
prior to the adoption of an ordinance.
The city has tentatively agreed to use funds that are on hold
from an old DCEO revolving loan program and have been dormant for
several years. Currently, the city is in the process of getting
permission from the state agency to dissolve the program and
incorporate the funds into the city's general operating account.
[By NILA SMITH]