How TIF'd up are we?

Evanston is facing a major request for economic development aid from Autobarn -- and a new report on how communities across the region use economic development incentives may help put the proposed deal in context.

The report from the Chicago Metropolitan Agency for Planning looks at three types of local government aid to business development:

  • Tax Increment Financing districts
  • Sales tax rebates
  • Property tax abatements and classification incentives.

Autobarn is looking for all three.

Today we'll look at Tax Increment Financing districts, or TIFs.

Evanston has seven current TIF districts, as shown on this map from the city. Another -- the Downtown II district -- has expired after completing its 23 year run.

Evanston TIF districts generated $6.6 million in incremental tax revenue in 2012 according to a report from Cook County Clerk David Orr.

The CMAP study shows that among communities that have TIFs, Evanston was in the lowest group in terms of the percentage of the city's total equalized assessed valuation that was tied up in TIF districts -- at less than 5 percent. (See page 23 of the report for a larger map showing data for the entire metro region.)

While more affluent communities to the north of Evanston are among those that have not used TIFs at all, others have used them much more extensively -- including Glenview in its redevelopment of the former naval air station property.

The CMAP report also shows that Evanston spent less per capita on TIF developments over the past decade than some of its nearby neighbors -- including Lincolnwood and Skokie. (The full regional version of that map is on page 24 of the CMAP report.)

While details of the Autobarn proposal -- which would move its service facilities and much of new and used car inventory storage to the former Shure headquarters at 222 Hartrey Ave. -- are still being developed -- expansion of the Howard-Hartrey TIF district to include the site is expected to be part of the ultimate request.

A neighborhood meeting to discuss the project is scheduled for 7 p.m. Tuesday at the Levy Center, 300 Dodge Ave.


The series continues with reports on sales tax rebates and property tax incentives.

Comments

No TIF money for you!

I totally disagree with providing TIFS to assist individual entities such as a business or a shopping mall.
TIFS are a long term economic development tool designed to spur economic development of a particular area or neighborhood. TIFS use taxes that normally would go toward city and schools to generate economic development of an area through infrastructure, tax rebates and other incentives and last more than 20 years.
Last year our City Council passed a TIF to redevelop the Dempster Plaza shopping center AFTER it was purchased by Bonnie Investments in a foreclosure. Some of the taxes generated by the shopping center will be diverted back into the shopping center for at least two decades. At first, city officials estimated a total of $20 million in tax money would go toward the shopping center over the life of the TIF. But after some grumbling from aldermen and citizens, city staff adjusted those numbers down to about $2 million. That's a big adjustment and it's kind of hard to trust city staff at this point.  
Now the Council is considering a TIF to benefit Autobarn? I wouldn't be opposed to a sales tax rebate or a short term property tax abatement but not a longterm TIF.
Did everyone remember to pay their property taxes that were due Aug. 1? I bet for most of you they increased once again. Wait until you get your property tax bill next year because this is a tax assessment year.
You get what you vote for. For the record, I did not vote for my aldermen, Mark Tendam who supported the shopping center TIF and a host of other city giveaways to businesses such as the Eighth Ward Wine Bar, Trader Joe's, thousands of dollars to a cafe where the owner owed a lot in back taxes and a sign for Cental Street Cafe that closed months ago. 
When government officials start handing out your hard-earned tax dollars it mostly benefits them and those receiving the money. And it is a recipe for corruption, something folks living in Chicago, Cook County and Illinois know all too well.
:)

TIF benefits

Any accurate analysis of TIFs must also take into consideration the effect upon the immediate surrounding non TIF parcels.  While our TIFs may show $6.6 million incremental benefit for 2012 it does not take into consideration the positive effect they have had around them and how that net effect goes beyond the $6.6 million incremental generated in 2012 alone.
As a business owner downtown I was thinking of moving outside of Evanston because of the dilapidated condition of all the old buildings downtown and the very negative effect that was having on downtown retail. Calls for preserving the so called "quaintness" meant a continued slow spiral of decline.
When it became obvious that particular council was very pro development we ended up making a large investment and expanding our business here, doubling the number of our employees, etc.  And I know for fact that I am not the only small business person who made the same type of decision based on the TIFs getting projects built downtown.
We basically tripled our r.e. tax payments, and that really has a direct relationship with the TIF and the redevelopment it helped create.  Those increased tax payments should really be accrued as part of the financial benefit generated by a TIF.

Declining schools need tax money

Our schools, one driver of our giant property taxes, are declining. The long-term development we need to focus on is maintaining academic excellence. Wilmette schools have way outpaced us. We have economic and cultural diversity and many programs in place to protect this wonderful community asset. Let's not let our schools slip too far because they should be our biggest draw. Tax incentives for private business, yes, but not at the expense of development of the community for future generations of families. Invest heavily in our schools.

TIFs good for schools

Ask the schools whether they thought there was any benefit to their cash flow when the downtown TIF expired.  I remember sitting in during an economic development meeting where the 202 CFO made some comments about how the TIF saved their financial butts that year.  The schools also received some of the extra cash from the TIFs every year during the TIF term.  
Good thing the TIF was created because that hugely expanded tax base is exactly how you ramp up investments for the future.  It's long term planning for those you can see beyond the end of their noses.

Think about the property taxes from the rest of that district

The TIF district that they're considering extending is the one on Howard east of the canal that contains Jewel, Target, Best Buy, and OfficeMax. None of that was there in 1992 when the district was created, and it is due to expire in 2015, meaning that the full value of the increment would then flow to the general fund rather than staying in the district.
If the TIF boundary is expanded to cover the 222 Hartrey property, and the district renewed, then that means all of that significantly expanded tax base is locked up for another 23 years, even though the district is pretty much fully built out.
If the idea of a TIF is to attract economic development, then that district has done its job and should be allowed to expire as planned. I don't believe that a multibillion dollar business like Autobarn is unable to expand its operations without local taxpayer subsidies. It sounds to me like they're playing the typical game of trying to get jurisdictions to compete with each other for who can create the biggest public giveaway to a private entity--this is a race to the bottom that Evanston should not take part in. 

TIF extension?

So far the discussion has only been about expanding the TIF district boundary, to let some of the revenue accumlated by the TIF be used for the Autobarn project before the TIF expires in 2015.
Since the proposal isn't final yet -- the idea of an extension can't be completely ruled out -- but it's not what has been discussed so far.
-- Bill

Taxpayers are paying for the TIFS they are not free!

So we generated 6.6 million dollar increment, if there were no TIFs the city would have gotten only about  $1.3 million dollars.  The remaining $5.3 million would have gone to the school districts and other taxing bodies. Thus we taxpayers had to subsidize those bodies for the $5.3 million dollars.
Of course you might agrue that without the TIFs there would be NO increment. I am not completely against the TIFs but as  some are pointing out here the TIFs are nowing being used for individual business versus an entire area. Also is the TIF funding being used correctly?  
Also remember as a taxpayer each year my value of property goes up, so the increment of a TIF has that increase plus any real value, that any new development created.
TIF money for Wine and Cheese Bars for private individuals? TIF money for public improvement in a district, sounds better to me.