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TAX INCREMENT FINANCE (TIF)
Tax Increment Financing, or TIF is a tool to assist in financing redevelopment projects in designated blighted and substandard areas of the city. The City of Fairbury issues bonds or a promissory note to finance any approved project. The property taxes generated from the increased valuation of the development are captured for a period of up to 15 years to repay the public investment.
The purpose of TIF is to help communities undertake redevelopment activities for urban renewal and municipal growth. TIF allows a city to pay for the public improvements that are part of a private redevelopment project. TIF is not a grant and it is not a primary funding source for a redevelopment project, but does provide an incentive for private development that will increase the tax base of the Fairbury community and create additional jobs.
Tax Increment Financing can be used for the following purposes:
- Total amount of public improvements associated with a redevelopment project which are located in a redevelopment area
- Acquisition of redevelopment sites including all costs associated with acquisition
- Site preparation, demolition, grading, special foundations, and other work prior to construction of the project
- Utility extensions
- Marketing and promotions
- Rehabilitation of structures within the redevelopment area
- Construction of structure within the redevelopment project area
Tax Increment Financing is primarily designed to finance public improvements associated with a project. However, residual funds can be used for other allowed purposes after allowing for the cost of public improvements.