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The City frequently calls TIFs the “only” economic
development program left in its arsenal. While TIF certainly
can be a powerful tool in certain circumstances, other tools
still do exist and may be more effective in certain circumstances.
While TIFs tend to favor large developers that wish to build
on stretches of vacant land, the City’s other tools
focus more on existing residents and businesses. There is
a wider variety of programs on the table than the City is
willing to admit, but there’s still a need to continue
searching for effective programs that benefit our neighborhoods.
None of these programs, by themselves, are a substitute for
the TIF program, but they can serve as an alternative to the
TIF program in certain instances or be used in conjunction
with TIF as part of an integrated redevelopment strategy.
What follows is a list of City of Chicago and Cook County
programs that are intended to help foster economic development,
together with an explanation of what types of areas the funds
are intended for, and who to contact for more information.
Programs that have worked in the past that the City has suspended
(such as the Strategic Neighborhood Action Program, and the
Model Industrial Corridors Program) are also listed in the
hope that the City will reactivate them. Including a program
on this list does not mean that NCBG necessarily endorses
its use or has evaluated its effectiveness. This list
is meant to give taxpayers a starting point for evaluating
the available options .
Special Planning Districts
| Name |
Description |
Type of Area |
Contact |
| Special Service Areas |
Program that allows a group of taxpayers
to agree to a small increase in their tax rate in exchange
for control over the funds. Money can be used for joint
marketing efforts, security, promotions, façade improvements,
and small-scale capital improvements. |
Commercial, Industrial |
DPD Neighborhoods Division312-744-0606 |
| Redevelopment Areas |
Similar to TIF, but without the tax-related
provisions. The program gives the City increased land
acquisition powers and makes areas eligible for some government
loan and grant programs. |
Residential, Commercial, Industrial |
Neighborhoods Division312-744-0606 |
| Empowerment Zone |
Federal program that provides incentives
for businesses to expand within three designated “clusters.”
Incentives include wage credits, tax deductions on property
owned within the Zone, and tax exempt bond financing to
help pay for expansion projects. |
Residential, Commercial, Industrial |
DPE Empowerment Zone Division312-744-9623 |
| Enterprise Zones |
Areas designated by the City and certified
by the State to receive tax incentives and other benefits,
including sales tax exemptions, property tax reduction,
financing assistant, real estate tax exemption, investment
tax credit, state jobs creation tax credit, and utility
tax exemption. There are currently six Enterprise Zones
in Chicago. |
Commercial, Industrial |
DPD Finance Division312-744-0914 |
| Strategic Neighborhood Action Program |
An integrated approach to targeting a wide
variety of public resources at a specific geographic area
that includes representatives of various City departments
(DPD, Transportation, Buildings, Streets and Sanitation,
Housing, Environment, and General Services) and other
public agencies (schools, parks, etc.). Seven SNAP districts
were established and met with success, but the program
has since been abandoned. |
Commercial, Residential |
DPD Neighborhoods Division312-744-0606 |
| Model Industrial Corridors |
Planning process designed to develop and
implement strategic plans for 12 of the City’s 22
recognized industrial corridors. Plans include details
on needed infrastructure and marketing improvements to
make the corridors more accessible, functional, safe,
attractive, and competitive. Promised City funds to implement
the plans have never materialized. |
Industrial |
DPD Neighborhoods Division312-744-0606 |
Infrastructure Programs
| Name |
Description |
Type of Area |
Contact |
| Capital Improvement Program |
The City’s five-year plan for infrastructure
improvements across all sectors, funded by a combination
of local, State, and federal funds. |
Residential, Commercial, Industrial |
Office of Budget and Management312-744-6670 |
| Brownfields Cleanup |
Environmental clean-up of abandoned industrial
sites to make them viable candidates for redevelopment. |
Industrial |
DPD Neighborhoods Division312-744-0606 |
| Industrial Area Improvement Program |
Upgrades to industrial and transportation
infrastructure |
Industrial |
DPD Neighborhoods Division312-744-0606 |
| Business Infrastructure Improvement Program |
Fast-track small-scale infrastructure improvements
that benefit businesses (curb, gutter and street improvements;
light pole, water/sewer or fire hydrant relocation; traffic
signals; vaulted sidewalk repair or elimination; landscaping,
etc.). Applicants share 50 percent of the cost |
Commercial, Industrial |
DPD Neighborhoods Division312-744-0606 |
| Street and Alley Vacation/Limited Local
Access Program |
Closes little-used streets and alleys in
industrial areas and gives them over to use by companies
for loading docks/traffic control, increased security,
plant expansion, etc. |
Industrial |
DPD Business and Public Affairs Division312-744-4190 |
Loans, Grants, and Financing Assistance
| Name |
Description |
Type of Area |
Contact |
| Industrial Revenue Bonds |
Tax-exempt, reduced interest bonds issued
by the City to manufacturers to finance new construction,
renovation, and other purchases. |
Industrial |
DPD Finance Division
312-744-CITY |
| Façade Rebate Program |
Rebates for improvements to the exterior
of buildings in commercial and industrial areas, including
lighting, signs, windows, doors, security, energy conservation,
and truck docks. Industrial buildings can get a rebate
of up to 30 percent of costs (up to $10,000 per building).
Commercial/retail buildings can get rebates up t0 50 percent
of costs (up to $5,000). |
Commercial, Industrial |
DPD Landmarks Division
312-744-3200 |
| New Homes for Chicago |
Encourages developers to construct affordable
homes by selling City-owned lots at reduced prices, giving
construction subsidies, and waiving the cost of permits.
|
Residential |
Dept. of Housing
311
housing@ci.chi.il.us |
| H.U.D. H.O.M.E. Program |
Federal block grants for affordable housing
development and rehabilitation. |
Residential |
Dept. of Housing
311
housing@ci.chi.il.us |
| CDBG Float Loans |
Short-term loans for businesses that will
create jobs in Chicago through expansion, renovation,
or acquisition of fixed assets. Loans are provided for
two years at 40 percent of the prime interest rate. |
Commercial, Industrial |
DPD Finance Division
312-744-CITY |
| Bank Participation Loan Program |
The City works with local banks to provide
reduced-interest loans to commercial and industrial businesses
seeking to expand, renovate, or purchase equipment. |
Commercial, Industrial |
DPD Finance Division
312-744-0914 |
| Micro Loan Program |
Low-interest loans up to $20,000 to very
small existing businesses to create jobs. Funds can be
used for equipment, renovation, or working capital. |
Commercial, Industrial |
DPD Finance Division
312-744-0914 |
| City Mortgage Program |
City funds to help first-time homebuyers
to purchase single family homes, two/four flats, or condominiums.
Funds come from the sale of tax-exempt municipal bonds. |
Residential |
Dept. of Housing
311
housing@ci.chi.il.us |
| Chicago Low Income Housing Trust
Fund |
Grants to building owners to reduce rents
for very-low income individuals and families |
Residential |
Dept. of Housing
311
housing@ci.chi.il.us |
Tax Incentives
In general, tax incentives work by reducing the percentage
at which a property is assessed. In other words, the property
owner pays taxes on a smaller portion of the market value
of the property, resulting in a lower overall tax bill. For
example, say the market value of a commercial property is
determined to be $100,000. That property is then assessed
at a rate of 38 percent (see below), meaning that the taxable
value of the property is $38,000. If the rate was reduced
to 33 percent, for example, the taxable value would decline
to $33,000. Note: This is not the amount that
the property owner pays in taxes. The assessed value of the
property is multiplied by the tax rate, which in Chicago
is about 8 to 10 percent, depending on the year.
Current assessment rates for each major property classification
are:
Class |
Type of Property |
Assessment Rate |
| 1 |
Vacant |
22% |
| 2 |
Single Family Residential |
16% |
| 3 |
Multi-Family Residential |
33% |
| 4 |
Non-Profit |
30% |
| 5a |
Commercial |
38% |
| 5b |
Industrial |
36% |
The following chart lists current property tax incentives
available in Cook County:
| Name |
Description |
Type of Area |
Contact |
| Class 6(b) Property Tax Incentive |
Incentive for new or rehabilitated manufacturing. Reduces
assessment rate from 36 percent to 16 percent for eight years, then gradually increases the rate to 36 percent (23 percent
in Year 9 and 30 percent in Year 10). |
Industrial |
Cook
County Assessor312-443-7550DPD Finance Division312-744-0914 |
| Class 7(a)/7(b) Property Tax Incentive |
New
or rehabilitated commercial property in blighted areas, intended for
projects that would not go forward without the incentive. Reduces assessment
rate to 16 percent for 8 years, then raises
in to 23 percent in Year 9, 30 percent in Year 10, and the assessment
thereafter. |
Commercial |
Cook
County Assessor312-443-7550DPD Finance Division312-744-0914 |
| Class 8 Property Tax Incentive |
New
or rehabilitated commercial property in blighted areas, intended for
projects that would not go forward without the incentive. Reduces assessment
rate to 16 percent for 10 years, then raises it to 23 percent in Year
11, 30 percent in Year 12, then the full assessment rate thereafter. |
Commercial,
Industrial |
Cook
County Assessor312-443-7550DPD Finance Division312-744-0914 |
| Class 9 Property Tax Incentive |
Residential
development in areas where at least 51 percent of residents earn low
to moderate incomes. At least half the units must have rent below 80
percent of HUD’s fair market rent. Reduces assessment level to 16 percent
for 10 years, and can be extended for two more 10-year periods. |
Residential |
Cook
County Assessor312-443-7550DPD Finance Division312-744-0914 |
| Landmark Program |
Incentive
for rehabilitation of commercial and industrial landmarks for cases
where project would not proceed without the incentive. Assessment levels
are same as for Class 7(a) and (b). Other tax benefits (income tax credits
for commercial properties, assessment freeze for residential rehabilitation,
technical assistance) may be available through the City. |
Commercial,
Industrial |
DPD
Landmarks Division312-744-3200 |
| Homebuyer Tax Savings Program |
Allows
first-time homebuyers purchasing homes in certain low- to moderate-income
areas to take a federal income tax credit equal to 20 percent of their
annual mortgage interest. |
Residential |
Dept.
of Housing311housing@ci.chi.il.us |
Marketing and Technical Assistance
| Name |
Description |
Type of Area |
Contact |
| Business Express |
City
hotline designed to direct businesses to City resources that can help
them expand and improve their operations. |
Commercial,
Industrial |
312-744-0046 |
| Retail Chicago |
Program aimed at improving how the City’s retail areas
are marketed to developers, coordinating the City role in development
projects, and stabilizing existing commercial areas. Co-sponsored by
the Local Initiatives Support Corporation (LISC) and the Chicago Association of Neighborhood Development
Organizations (CANDO). |
Commercial |
DPD
Business and Public Affairs Division312-744-4190 |
| International Business Services |
Assistance
for local companies to help them expand their export markets. |
Industrial |
DPD
Commercial and Industrial Division312-744-4190 |
| Technical Assistance Support Groups |
Capacity
building for non-profit “umbrella organizations” interested in job creation
and retention in low- to moderate-income areas. |
Commercial,
Industrial |
DPD
Neighborhoods Division312-744-0606 |
| Technical Assistance to Business Groups |
Capacity
building for neighborhood business and economic development organizations
to assist in job creation and business expansion. Focus is on commercial
development. Industrial assistance covered under the Local Investment
Support Initiative (LIRI) program. |
Commercial |
DPD
Neighborhoods Division312-744-0606 |
| Research & Information Services |
Provides
demographic and economic data about Chicago to businesses, public agencies,
and community organizations. |
Residential,
Commercial, Industrial |
DPD
Strategic Planning Division, 312-744-9444 |
| Casewatch |
Monthly
mailing list detailing data from DPD and the Dept. of Buildings updating
the public on the status of vacant City-owned land and cases in housing
court, compiled by ward and community area. |
Residential,
Commercial |
DPD
Strategic Planning Division, 312-744-9444 |
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