Important TIF Terms

Acquisition Map
A map of parcels of property in a TIF district that may be acquired by the City through its power of eminent domain in order to further the goals of the TIF. In a TIF district, the City may only acquire land that has been previously listed on an “acquisition map.” The Community Development Commission must approve the creation of the acquisition map, and any changes to that map. The CDC must also approve and take public comment each time the City moves forward with land acquisition. (See the NCBG fact sheet, “Land Acquisition and Eminent Domain,” p 26.)

Annual TIF Reports
No later than July 1 of each year, the Dept. of Planning and Development must publish a report on the performance of each TIF district that had been approved as of December 31 of the previous year. While these reports do not include some of the key information that the public needs to know, there is some valuable data in their pages. The reports contain information on redevelopment agreements, private contracts, bond issues, and the growth in property value and tax revenue, among other things. NCBG has the complete set, or you can call DPD for a copy at 312-744-4471.

“Blighted Area” and “Conservation Area” TIFs
State law requires that TIFs may only be established in areas that are considered “blighted” or in danger of becoming blighted. This second type of TIF is known as a “conservation area TIF.” To determine whether a neighborhood is blighted, a consultant hired by the Dept. of Planning and Development looks at factors such as the amount of vacant land, the building conditions in the area, and the amount of new investment in the neighborhood. (See the NCBG fact sheet, “What Areas Are Eligible for TIFs?”, p 23.)

Bond Issue
A bond issue is a way to provide “up-front” money for a TIF district. The City in essence borrows money by selling “IOU” notes to private investors, who later get their money back with interest. The City uses the new property taxes generated in the TIF (the “increment”) to pay back this loan. (See the NCBG fact sheet, “Front Funding Your TIF,” p. 88.)

Eminent Domain
The power of the City to acquire private land without the consent of the owner. The City is required, however, to pay the land owner the fair market value of the property and abide by other restrictions. (See the NCBG fact sheet, “Land Acquisition and Eminent Domain,” p 26.)

Equalized Assessed Value (EAV)
The Cook County Assessor’s term for the value of a particular piece of property. The “initial” or “base” EAV is the value of the property at the time the TIF district was created. (See the NCBG fact sheet, “How Does the Property Tax System Work in Cook County?,” p. 13.)

Increment
The growth in property tax revenue that has occurred since the TIF was put in place. The increment is the amount of money available for investment in the TIF district. (See “How Does the Property Tax System Work?” p. 13.)

“Pay-as-you-go” TIF
The “opposite” of a bond issue TIF. Rather than funding the TIF up front by borrowing money, a pay-as-you-go TIF waits for new tax money (the increment) to come in, then spends that money on redevelopment projects. (See the NCBG fact sheet, “Front Funding Your TIF,” p. 88.)

“Portability”
The technical term for the City’s power to transfer funds between TIFs. TIF funds can only be transferred between TIFs that are directly next to each other (or “contiguous”). The City cannot take funds from the Central Loop TIF, for example, and transfer them to a neighborhood TIF, nor can it take funds from your TIF and use them downtown. The maximum amount of funds that can be transferred is limited by the size of the budget of the TIF receiving the dollars.

Redevelopment Agreement
The specific contract signed between the City and a private developer spelling out the details of a specific project, the public subsidy for that project, and sometimes the public benefit (such as jobs created) that the City is supposed to get in return for the subsidy.

Redevelopment Plan
The redevelopment plan is a general roadmap for development over the 23-year life of the TIF, including: (1) redevelopment goals, (2) recommended land uses, and (3) a budget of estimated project costs. When we say a TIF district has been created, we mean that the redevelopment plan has been approved by the City Council.

TIF
Refers directly to “Tax Increment Financing,” but is often used to denote the area in which tax increment financing is available – a TIF District.