A Tax Increment Financing (TIF) District has been established within the Miracle Mile with a limited geographic area which includes East State Street from Fairview Avenue to Alpine Road and north including Morsay Drive. A TIF district must be a continuous commercial or business district without interrupting residential areas. The efforts of the Miracle Mile Rockford group include providing a common voice in expressing the desired utilization of those TIF funds.
Within a TIF district, revenues are created by the increased real estate taxes resulting from targeted projects that create new construction or rehabilitation of existing properties and buildings. TIF’s can only be created by municipal government and can exist for up to 23 years. A TIF project must be located within a TIF district to receive funding from that TIF.
The revenue of the TIF is an important economic development tool used by the City of Rockford to finance a portion of development projects that will in turn create higher property values for a neighborhood. This will spur public infrastructure improvements, attract private development, and increase the municipal tax base.
During the life of the district, TIF financing allows a developer or property owner to receive a portion of the increased real estate taxes generated from a rehabilitation or new construction project. TIF funds usually are a small portion of the overall project costs and are meant to close the gap between conventional bank financing, the owner’s funds, and project’s costs. TIF funds often make previously infeasible development projects possible.
TIF districts do not raise real estate taxes. TIF districts capitalize on the increased revenues generated by development and general improvement within the TIF district boundaries. A TIF designation merely permits any additional property tax revenue to be earmarked for improvements within the district.
What makes a project a good candidate for TIF assistance?
- Substantial increase in real estate taxes after construction
- New construction or substantial rehabilitation
- Adding building square footage
- Low present real estate value
- Vacant buildings or land
What projects make poor candidates for TIF Financing?
- Cosmetic work (i.e. painting)
- Largely interior work (i.e. redecorating)
- Minor repairs
- Small or no increase in real estate taxes after completion
- Roof work
- Parking lot work
If you have a project to be considered for TIF funding, you can get started by preparing the following information.
- Design and construction costs of the entire project
- Pro forma detailing sources and uses of funding
This is just to get started. If your project appears to be a viable one, you will need to provide a 15 year cash flow statement and complete the attached TIF Application Form for the City of Rockford. Ultimately, all TIF projects must be approved by the Rockford City Council.