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Tax Increment Financing (TIF) is a redevelopment tool used by municipalities in the United States for more than over 40 years.
It is designed to increase real property values through the physical improvement of a specific redevelopment area. It is
a program to eliminate blight, encourage private reinvestment and/or enhance the tax base. Local taxing bodies (school districts,
counties, park districts, sanitary districts, etc) having territory within the proposed redevelopment area are required to
be given notice of public hearings on the formation of a TIF district. However, only the municipality has power to create
the district, determine the boundaries of the redevelopment area, approve the redevelopment plan and set the maximum life
of the district (up to 23 years).
A tax increment is the difference between the assessed value of taxable real property before it experiences redevelopment
and the assessed valuation of property after redevelopment. Tax increments are inevitable, as a result of an increase in
property values at the onset of new redevelopment projects. The increase in taxes is placed in a "Special Tax Allocation
Fund."
Often to purchase the land and begin the infrastructure cost in the TIF district, bonds are issued backed by the full
faith and credit of the municipality. The proceeds from the bond issuance are placed in a Project Fund to be used for construction
and related expenditures.
T I F District #1 Sauk Plaza- redevelopment of a strip mall created in 1988 no bond issue. Businesses located within
this TIF included Sterk's Super Food, Chung Shan Chef Restaurant, Subway Submarine, Theater Time Video, Gallagher Asphalt,
Dollar General, Sauk Village Currency Exchange, and Ella's Dry Cleaners and Laundromat. The equalized assessed valuation
in this district has increased from $612,863 to $1,178,448.
T I F District #2 Sauk Pointe Industrial Park - development of an industrial park created in 1990 with a $2,000,000 bond
issue. Businesses located within this district are Pacesetter Steel, Chicago Air Power, F.C.S. Industries and Ferrell Gas.
The equalized assessed valuation of property within this district has increased from $63,280 to $9,287,402.
T I F District #3 Transdevelopment - redevelopment for transportation industries and commercial development created in
1994 with the issue of $10,000,000 bond issue. The business located within this district is Wayne Industries. The equalized
assessed valuation has increased from $296,948 to $2,383,932 in 1999 (most current figures).
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