John Quigley: TIF districts have helped bring development to city
To TIF? Or not to TIF?
That is the question ... that municipalities face when considering how best to augment economic development.
Tax increment financing, or TIF, is a legislated method of public financing used to subsidize redevelopment, infrastructure and other community improvement projects in distressed, underdeveloped and underutilized areas where development might not otherwise occur.
TIF is a value-capture strategy that uses future gains in property taxes to invest in current improvements, which are projected to create conditions for the expected gains. For example, the completion of a public project often results in an assessed valuation increase of surrounding real estate, thus generating incremental tax revenue above each parcel’s frozen value base.
Aside from the property tax benefits, TIF projects also can produce an increase in sales tax revenue — especially important for a home rule community such as Elmhurst — and an expansion in the workforce.
In Elmhurst, TIF 1 laid the groundwork for the rebirth of a downtown business district that the Chicago Tribune infamously declared dead and gone back in the 1990s. Its cornerstone is the regeneration of the York Theatre into its current 10-screen Cineplex showing newly released feature films. Each day, the facility attracts tens of thousands of moviegoers who also patronize many other downtown merchants.
TIF 2 transformed the dilapidated shopping mall at the northeast corner of Route 83 and St. Charles Road — one of the busiest intersections in the western suburbs — into a sale-tax-ringing cash register of retail stores. Elmhurst Crossing boasts one of Kohl’s highest sales generating stores nationwide; Dominick’s thrives despite three Jewel locations nearby (two in Elmhurst); and vehicles regularly line up at the Portillo’s Hot Dogs drive-thru.
If not for an assemblage of multiply owned properties in TIF 3, Elmhurst might have lost any of three major automobile dealerships along Lake Street. Today, Elmhurst Toyota/Scion is the nameplate’s Midwest sales leader, while the BMW and Jaguar successfully serve the luxury auto market. Auto sales account for at least 35 cents of every $1 of Elmhurst’s retail sales, and $100 for every $10K in car value.
Elmhurst’s newest TIF will bring a Mariano’s Fresh Market into the former Elmhurst Ford dealership site along North York Street, thanks in part to $1.25 million in TIF 4 funding assistance, which the city expects to recoup in only three years via the combination of increased property and sales taxes.
Those first three TIFs all exceeded their revenue projections, too.
John Quigley is the president and CEO of the Elmhurst Chamber of Commerce & Industry
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