Tax Increment Financing (TIF) Districts
Tax Increment Financing is a special funding tool used by the City of Chicago to promote public and private investment across the city. Funds are used to build and repair roads and infrastructure, clean polluted land, and put vacant properties back to productive use, usually in conjunction with private development projects. Funds are generated by growth in the Equalized Assessed Valuation (EAV) of properties within a designated district over a period of 23 years.
Funding levels for specific projects are coordinated with area plans and goals. When an area is declared a TIF district, the amount of property tax the area generates is set as a base EAV amount. As property values increase, all property tax growth above that amount can be used to fund redevelopment projects within the district. The increase, or increment, can be used to pay back bonds issued to pay upfront costs, or can be used on a pay-as-you-go basis for individual projects. At the conclusion of the 23-year period, the increase in revenue over the base amount is distributed annually among the seven taxing bodies in the city that are based on property values.
Beverly Hills/Morgan Park has two Tax Increment Finance (TIF) Districts – the 95th Street TIF and the Western/Rock Island TIF. Together they cover every commercial area in the neighborhood.
Small Business Improvement Fund (SBIF)
A Small Business Improvement Fund (SBIF) is currently established in the Western/Rock Island TIF. SBIF is a program through which building owners (or lessees, with property owners’ consent) can be reimbursed for certain eligible projects that preserve building stock, improve neighborhood appearance or economic value, and enable businesses to stay in the neighborhood, remain competitive, or even expand within the TIF District. SBIF provides reimbursement of up to 75% of SBIF-eligible costs, up to a maximum of $150,000 in assistance per project and per applicant.
SBIF’s in Chicago are administered by SomerCor 504 Inc. Applications and guidelines can be found on their website. For additional information, contact at BAPA, 773-233-3100.