Public hearing presentation main chicago proposed tif draft 11.12.12

Proposed Main/ChicagoTax Increment Financing (TIF) District

City of EvanstonPublic Hearing

November 12, 2012

Chicago/Main TIF

TIF will give City ability to:

1. Invest in necessary infrastructure in Main/Chicago neighborhood;

2. Participate in public/private partnerships; and

3. Encourage transit-oriented development and improvements.

Plan for Implementation

• Guide for implementation of the Chicago/Main TIF District

• Four Major Areas of New Investment– Transit-Oriented Development– Public Infrastructure– Open Space; and– Private Development.

• Neighborhood Meeting for January 2013

Proposed TIF BudgetProgram/Improvements Estimated Costs

Land Acquisition, Assembly, Relocation $2,500,000

Site Prep, Remediation, Demolition, Site Grading $2,500,000

Utility Improvements $6,000,000

Rehabilitation of Existing Public and Private Structures;Taxing District Capital Improvements

$5,500,000

Public Facilities (Incl. Parking & Streetscaping) $4,500,000

Interest Costs Pursuant to the Act $2,000,000

Professional Service Costs $1,000,000

Job Training $500,000

Statutory School District Payments $500,000

TOTAL ESTIMATED TIF BUDGET $25,000,000

Proposed Chicago/MainTax Increment Financing (TIF) District

City of EvanstonOctober 2, 2012

Overview

I. Background on Proposed TIF District/Plan for Chicago/Main Corridor

II.Factors Qualifying Area as a TIF DistrictIII.Key Elements of TIF Plan

• The Chicago/Main TIF Area – One of the City’s oldest and important commercial/mixed use areas;

situated outside of the downtown district– Relatively dense land use, with multiple land uses

• industrial, residential, commercial, and transportation-related uses

– Area may be at an “inflection point” whereby it either continues to stagnate or it rebounds

• Strategic Importance – Important space for southern Evanston residents– Chicago/Main is a commercial and transportation center that for

decades has provided shopping options for nearby residents (including multi-family dwellings) and commuters

– Based on location and transportation assets, has potential for success and renewal

I. Background

The TIF Plan complies with key legal provisions of the TIF Act, including but not limited to:– TIF Plan conforms to the City’s Comprehensive Plan– Area consists of contiguous parcels – exceeds 1 ½ acres– “But-for” requirement is met - Redevelopment is feasible

only with the utilization of tax increment financing• As documented in the TIF Qualification Report (Appendix V of the

TIF Plan)

I. Background

I. Background

• City has considered alternative economic development tools, with only limited success

• The City has considered, in succession:– Ad-hoc use of financial tools other than TIF– “Corridor studies”– Now considering TIF

I. Background

I. Background

Review of TIF FinancingTIF involves splitting property tax revenue generated from properties within the TIF District into two components or “buckets”:

Bucket for Base Revenues – For All Local Governments

Bucket for Incremental Revenues – For Redevelopment within TIF

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

1 2 3 4 5 6 7 8 9 10

Year

As

se

ss

ed

Va

lue

(A

V)

Year Base AV Total AV

I. BackgroundReview of TIF Financing- Ideally, a successful TIF produces positive incremental revenue over

time

TIF Performance Adjusted for Project-Related Risks

0

20

40

60

80

100

120

140

160

180

200

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Base EAV Total EAV - Adjusted for Market Factors

Delay in Project Absorption

Reduction in Growth

I. BackgroundReview of TIF Financing- In practice, a successful TIF faces certain challenges in seeking to generate positive increment

ASS

ESS

ED

VA

LU

E

YEAR

• The proposed TIF District is found to qualify under the following criteria:– Improved property - As a “conservation area”, based

upon the findings that:• A combination of 3 or more of the 13 factors set forth in the TIF

Act are present in the areaAND

• A majority of structures (83%) are 35 years or older

II. Qualification Factors

Improved Property – Conservation Area Findings Underlined

8. Inadequate Utilities9. Excessive Land Coverage10. Deleterious Layout11. Environmental Clean-up12. Lack of Community

Planning13. Lagging EAV

II. Qualification Factors

1. Dilapidation

2. Obsolescence

3. Deterioration

4. Presence of Structures Below Code

5. Illegal Uses

6. Excessive Vacancies

7. Lack of Ventilation and Sanitary Facilities

Lagging EAV

II. Qualification Factors

  2011 2010* 2009 2008 2007* 2006

Total EAV for TIF District

11,489,118 13,387,919 13,162,887 14,012,954 13,595,805 10,413,394

EAV Change (%)

-14.18% 1.71% -6.07% 3.07% 30.56%  

City-wide EAV (Excluding TIF)

2,715,878,455

3,028,496,168 3,292,826,482

2,924,384,938

2,758,744,224

2,235,479,352

City EAV Change (%)

-10.32% -8.03% 12.60% 6.00% 23.41%  

 CPI

 3.2%

 1.6%

 -0.4%

 3.8%

 2.8%

Deterioration

II. Qualification Factors

Deterioration

II. Qualification Factors

Deterioration

II. Qualification Factors

Deterioration

II. Qualification Factors

Deterioration

II. Qualification Factors

Deterioration

II. Qualification Factors

Improved Property – Conservation Area Findings Underlined

8. Inadequate Utilities9. Excessive Land Coverage10. Deleterious Layout11. Environmental Clean-up12. Lack of Community

Planning13. Lagging EAV

II. Qualification Factors

1. Dilapidation

2. Obsolescence

3. Deterioration

4. Presence of Structures Below Code

5. Illegal Uses

6. Excessive Vacancies

7. Lack of Ventilation and Sanitary Facilities

• Base EAV: $11.49 million (2011 EAV)• Projected EAV: Upon completion of redevelopment and

“re-tenanting,” approximately $30,000,000 to $35,000,000

• Proposed TIF Budget: $25,000,000 (see next slide)– The TIF Budget is:

• A maximum amount which does not obligate the City to expend such amounts

• Sized to accommodate potential development requirements• 23 year budget, not annual budget

• Proposed Land Uses: Retail, commercial, institutional, and residential uses

• Key “But-For” Finding– Redevelopment will not go forward without the TIF assistance

III. Key Elements of TIF Plan

• A TIF Plan…..– IS

• A general framework for economic development• Authorizes but does not require expenditures in certain

broad categories– IS NOT

• A detailed “blueprint” or strategy document (the 2000 Corridor Study and Economic Development Strategy Document fulfills that role)

• A document mandating expenditures– City Council would have to authorize funding of specific

economic development activities under separate ordinances

III. Key Elements of TIF Plan

BudgetProgram/Improvements Estimated Costs

Land Acquisition, Assembly, Relocation $2,500,000

Site Prep, Remediation, Demolition, Site Grading $2,500,000

Utility Improvements $6,000,000

Rehabilitation of Existing Public and Private Structures;Taxing District Capital Improvements

$5,500,000

Public Facilities (Incl. Parking & Streetscaping) $4,500,000

Interest Costs Pursuant to the Act $2,000,000

Professional Service Costs $1,000,000

Job Training $500,000

Statutory School District Payments $500,000

TOTAL ESTIMATED TIF BUDGET $25,000,000

• Budget Guidelines– Overall budget cannot be exceeded– Line-items in budget are flexible – Covers 23 years; hence difficult to estimate with precision– Budget expenditures subject to:

• City approvals• Determination of appropriateness of costs• Special TIF audit • Review by JRB annually

III. Key Elements of TIF Plan

Next Steps

• Introduction and Adoption of TIF ordinances: within 14-90 days after the Public Hearing – Subject to additional review/approval by City Council– Two open meetings with opportunity for additional public

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