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Economic Development Tax Incentives

Following is a summary of Tax Incentive Programs.  Read more about the Development Assistance Programs here.

Classification

Benefit Available

Requirements

Class 6b Property Tax

10% assessment level for 10 years followed by a 15% and 20% level for two phase-out years.  This incentive may also be renewed.

Any newly developed, substantially rehabilitated or reutilized industrial facility, used primarily for manufacturing, located in Cook County may be eligible.  Application must be made to municipality before applying to Assessor and before commencement of construction.

Class 7a Property Tax

10% assessment level for 10 years followed by 15% and 20% level for two phase-out years.

Any project, under $2 million, to develop, substantially rehabilitate or reuse vacant commercial facilities located in Cook County that would not be economically feasible without the incentive.  Application must be made to municipality before applying to Assessor and before commencement of construction.

Class 7b Property Tax

10% assessment level for 10 years followed by 15% and 20% level for two phase-out years.

Any project, over $2 million, to develop, substantially rehabilitate or reuse vacant commercial facilities located in Cook County that would not be economically feasible without the incentive.  Application must be made to municipality before applying to Assessor and before commencement of construction.

Class 8 Property Tax

10% assessment level for 10 years followed by 15% and 20% level for two phase-out years.

Benefit only available in areas which are experiencing severe economic depression (no sites available in Streamwood).

Class 9 Property Tax

10% assessment level for up to 10 years with the potential for 10-year extensions.

Program designed to encourage rehabilitation and long-term preservation of existing multi-family rental housing.

Class C

10% assessment level for 10 years followed by 15% and 20% level for two phase-out years.  Industrial properties may be eligible for renewal of this incentive.

Program is designed to encourage industrial and commercial development for the remediation of contaminated properties including abandoned or vacant property.

Shared Sales Tax Revenue

Contractual rebate on sales, utility or other municipally collected taxes.

Contractual opportunity between developer and municipality.  Level of assistance and priorities, generally, based on perceived return on investment.  Benefit of this assistance over property tax relief is that it provides direct benefit to users as many commercial (retail) users are not property owners and, therefore, see little benefit from property tax relief programs.

Tax Increment Financing Districts (TIF)

The TIF District maintains the existing property tax revenue assessment level received by all local taxing bodies (despite increased assessment as a result of the development). The resulting increase (or increment) from the new development is placed into a TIF fund and used to offset costs associated with the development. A District and plan are created which stipulate the resources offered.

Provides an opportunity for a municipality to work with a developer to make a project happen.  The community can provide initial funding for a project that is expected to generate substantial tax revenue.  The municipality collects the incremental increase in the taxes but may only use them for eligible TIF expenditures (paying off debt, infrastructure, land acquisition, etc.).  TIF Districts must meet certain criteria established by State law. TIF Districts must be established by the municipality, by Ordinance, and conform to all State TIF regulations and requirements.

Modified (Contractual) TIF

The TIF District maintains the existing property tax revenue assessment level received by the local municipality (despite increased assessment as a result of the development). The resulting increase (or increment) from the new development is placed into a TIF fund and used to offset the costs associated with the development. The municipality may also offer reductions in or rebates to other taxes (sales, utility, etc.). Other taxing bodies may not, necessarily, be affected.

Provides an opportunity for a municipality to work with a developer to make a project happen.  The community can provide initial funding for a project that is expected to generate substantial tax revenue.  The municipality collects the incremental increase in the taxes but may only use them for eligible TIF expenditures (paying off debt, infrastructure, land acquisition, etc.).  TIF Districts must be established by the municipality, by Ordinance.  Does not require complete adherence to State TIF regulation.

Commercial Business Districts (CBD)

Flexibility in the imposition of taxes. Municipality may rebate property, sales and other taxes. Other taxing bodies may also participate to reduce overall tax burden. A District and plan are created which define potential resources offered.

Another opportunity for a municipality to work with a developer.  The community can provide initial funding or other "pay as you go" incentives.  Project must be expected to generate substantial tax revenue and be established by Ordinance.

Industrial Revenue Bonds (IRB)

Tax exempt bonds available, at less than prime rate, for construction, renovation or redevelopment of commercial or industrial property.

Home Rule municipalities are allocated $50/capita annually on a "use or lose" basis.  Bonds are issued in the municipality’s name but their payback is the responsibility of the developer.  Public issuance required.

Special Service Areas (SSA)

Specific tax generation program aimed at recapturing expended costs to pay for infrastructure improvements.

Business and property owners must agree to establish SSA.  Village adopts ordinance and collects taxes to repay bonds issued to finance the infrastructure improvements.

Cook County Business Loans

Business loans available at ½ of prime rate with no points or fees (min. $25,000 - max. $300,000). Repayment of loan up to ten years with option to defer payments for 2 years.

Firm commitment from private lender with 3:1 financing ratio (private/public).  Business must enter into an employment referral agreement with the Cook County President’s Office of Employment Training. Project must increase sales or property taxes.

ComEd Rider 19

Reduced electrical rates to large industrial users.

Program offered directly to businesses through ComEd.  Contact George Lofton: (312) 394-3042.

 

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