Tax Increment Financing (TIF)

Font Size: + -

Feedback Print

"TIF" stands for Tax Increment Financing. TIF is a financial tool used to assist a municipality in the redevelopment of a specific area that is blighted or showing signs of becoming blighted. A tax increment is the difference between the amount of property tax revenue generated before TIF district designation and the amount of property tax revenue generated after TIF designation. The TIF redevelopment project creates a vital cycle, increasing development and redevelopment in the area, such that when the TIF project ends — and Illinois law allows a TIF project to exist for a period of up to 23 years — all of the taxing bodies benefit from the new growth.

Only property taxes generated by the incremental increase in value of TIF district are available for TIF projects. Tax rates do not change when a TIF is created. TIF districts do not increase taxes. The image below helps demonstrate the purpose and benefits of a successful TIF district.

tifimage_(recreated)

History of TIF Districts

In the 1960’s and 1970’s, the federal and state governments, including Illinois, began cutting back economic development programs that cities could use to revitalize communities. TIF districts are one of the few remaining tools that local governments can use to attract new business, invest in infrastructure and rebuild blighted areas. TIF districts are a popular and effective redevelopment tool, used in 47 states across the country and in over 250 Illinois cities.

For more information on the history, and laws governing TIF districts, please visit the Illinois Tax Increment Association.

Centex TIF District

Established: 2024
Expiration: 2047

In May 2024, Village Board approved and designated the Centex TIF District. The overall goal of this redevelopment project area is to reduce or eliminate conditions that qualify as “conservation areas” for improved parcels, “blighted areas” for unimproved parcels, and to provide the direction and mechanisms necessary to redevelop the Centex Industrial Park as a vibrant industrial and commercial district. The redevelopment of the Centex Redevelopment Project Area aims to revitalize the area, strengthen the economic base, and enhance the overall quality of life.

The estimated eligible redevelopment project costs of the Redevelopment Plan are $151.8 million. The 2022 EAV (the most recent year in which assessed values and the equalization factor were available) of all parcels in the Centex Redevelopment Project Area is $194,570,618. By tax year 2047 (collection year 2048), the total taxable EAV for the project area is anticipated to be approximately $313 million.

TIF Eligibility Studies

The Village worked with SB Friedman on an eligibility report for the Centex Redevelopment Project Area for the creation of the new TIF District.

Make Your Voice Heard

The Village of Schaumburg wants to hear from building owners, businesses and residents to hear what they would like to see be done within the Centex Industrial Park with the newly established TIF District. Visit Engage Schaumburg to give your input on this project and others within the village.

North Schaumburg (90 North)

Established: 2014
Expiration: 2037

The North Schaumburg District, otherwise known as "90 North", is located in the north part of Schaumburg and bounded by I-90, Roselle Road, Algonquin Road, and Arbor Drive. In particular, the North Schaumburg TIF seeks to:

Pay for the new I-90 Tollway Ramps at Meacham and Roselle Roads
Integrate Bus Rapid Transit and local transit services to promote a convenient pedestrian circulation
Encourage redevelopment of the underutilized properties in the area
Improve utilities and infrastructure within the project area

Motorla Redevelopment

90 North is the home to Veridian, which is the redevelopment of the former Motorola property into a new 225 acre mixed-use campus. Once completed, the project will feature high-end residential developments, Class A office space, numerous entertainment and hospitality options, and street retail districts. Below is drone footage from various stages of the Veridian development process. Additional information on the redevelopment can be found on the 90 North District website or the Veridian website.

TIF Eligibility Studies & Plans

The Village worked with Teska Associates on the North Schaumburg Redevelopment Plan & Project for the new TIF District. Teska completed the Eligibility Study and the Housing Impact Study as part of the project. The Village also partnered with Teska to approve the North Schaumburg Plan for this area.

90 North District Regulatory Framework Plans

In 2018, the village established two regulatory framework plans to help guide decision making and evaluate development proposals for east and west side of Meacham Road. The west side plan focuses on the redevelopment opportunities of the former Motorola Campus and the east side plan highlights the need for more restaurants, entertainment venues, programmed public plazas and trails that visitors and employees in the area can easily walk to.

The documents included in the regulatory framework for the new district include the Master Plan, the North District West (NDW) zoning code and the North District West Design Guidelines. The plans in their entirety can be found by clicking on the links below.

Experior

Established: 2021
Expiration: 2044

To offset unanticipated costs resulting from existing site conditions, the village established a new tax increment financing (TIF) district spanning 55 acres at the southwest corner of Irving Park and Rodenburg roads. This TIF aims to provide financial assistance to cover additional expenses for environmental remediation, site preparation, and public improvements necessary for development. The assistance will be disbursed through a 'pay as you go' model, utilizing the annual increment to reimburse Experior for eligible TIF costs for their new logistics facility.

The Village worked with SB Friedman on the TIF eligibility study and redevelopment plan.

Frequently Asked Questions

Expand/Contract Questions and Answers

What are the benefits of TIF districts?
TIF Districts create short and long term benefits for communities. These benefits include:
1. Providing development incentives requiring no tax increases. Properties are assessed and taxed the same way as in non-TIF areas.
2. Increasing property values. TIF redevelopment projects are an investment that causes property values to increase thus broadening the tax base and benefiting everyone who pays taxes.
3. Inducing private investment and development. Village's and Cities can utilize TIF funds to offset relocation costs, development costs, and improve needed infrastructure to facilitate redevelopment.
4. Creating jobs, job retention and training programs. Increased development, redevelopment and relocation mean a greater demand for workforce, and often times a higher skilled or higher educated workforce. Redevelopment also impacts areas outside of the TIF enabling other businesses to grow and prosper as well.
5. Creating a stronger, broader tax base. Infrastructure improvements, demolition or redevelopment of blighted areas attract private developers to invest in the community. As a result, the overall equalized assessment value increases, lessening the property tax burden.
6. Maintaining local control. Municipal officials are responsible for determining the best utilization of TIF funds, not the state or federal government.
7. Generating incremental revenue, which is reinvested in the TIF district. TIF funds are only utilized within the TIF district as a means to encourage the redevelopment of the area.
8. Benefiting other taxing bodies. At the end of the TIF the entire property tax generated by the newly revitalized property goes to the underlying taxing bodies providing a revenue increase for schools, parks, libraries and so forth without raising taxes.
What sorts of costs are eligible for TIF funding?
Illinois State Statute only allows TIF revenues to be used for certain kinds of private expenditures. Since the purpose of a TIF district is to encourage development or redevelopment in areas of need, private sector firms are eligible to receive funding to offset the costs of a development or redevelopment project in a TIF district. However, the funds can only be used for public improvements, which typically fall into one of the following categories:
- Infrastructure improvements
- Land acquisition
- Site preparation
- Relocation costs
- Job training
- Bond financing
Do TIF’s divert money from schools?
No. On the contrary, TIF’s, when executed properly, generate money for schools. First, schools continue to receive all the tax revenue they were entitled to before the creation of the TIF district. Second, under most circumstances, a school’s state aid is greater when a school district overlaps a successful TIF. The incremental growth in property values is excluded from the property tax base when the state calculates the amount of aid it should award to a school district. The "poorer" a school district, the more it stands to benefit from having a TIF district.
Are TIF plans and expenditures public?
Of course. When a TIF is established there are numerous legal requirements designed to insure the public and also other local taxing bodies are informed. Public hearings are held and all expenditure decisions must be made in public by locally elected officials charged with representing the community. All documents pertaining to a TIF are available through a Freedom of Information Act (FOIA) request.
Is a TIF District a tax increase?
No, it is not. Creating a TIF does not reduce property tax revenues available to overlapping taxing bodies like schools. Property taxes collected on properties included in the TIF at the time of its designation continue to be distributed to the school districts, park district, library district, and other taxing districts and are not reduced by the TIF creation. Only taxes derived from future growth that would not have occurred, go solely to projects in the TIF.

History of TIF Districts

Centex TIF District

TIF Eligibility Studies

Make Your Voice Heard

North Schaumburg (90 North)

Motorla Redevelopment

TIF Eligibility Studies & Plans

90 North District Regulatory Framework Plans

Experior

What are the benefits of TIF districts?

What sorts of costs are eligible for TIF funding?

Do TIF’s divert money from schools?

Are TIF plans and expenditures public?

Is a TIF District a tax increase?