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home : schools : schools May 28, 2016

2/27/2013 1:23:00 PM
Retired TIFs Add to Property Tax Revenues
By Mary Helt Gavin

At the School District 202 Board’s Feb. 25 meeting, Chief Financial Officer Bill Stafford presented an overview of Evanston’s first six tax-increment financing (TIF) districts. In a TIF district, only the base-rate property tax revenues (the tax revenues at the time the TIF went into effect) are distributed among the taxing bodies of the TIF – the school districts, the community college district and the mosquito abatement district, as examples. The increment – the difference between the "base" tax revenues on the property and those on the property as improved – is paid into a TIF fund for use on public works or other public benefits.

The tax levies of school districts are subject to tax caps: Each year’s levy is limited to the amount of the consumer price index (CPI) or 5 percent over the previous year, whichever is lower.

When the TIF is retired – generally in about 23 years – the property within the TIF is added to the tax base of the taxing bodies, allowing them to levy taxes on property with a greater valuation than before. The first year after a TIF is retired, the incremental value of property in the TIF is not subject to tax caps. The incremental value is added to the school district’s tax base, thus increasing the property value upon which the school district may levy taxes.

Mr. Stafford used the Downtown II TIF as an example. The initial equalized assessed valuation (EAV) of the property – along Maple Avenue from Church Street to around University Place – was $1.8 million. When the TIF was retired in 2009, the EAV of the property was $133 million.

When the TIF was retired, about $2 million was added to the District’s property tax revenues and about $3 million to School District 65’s tax revenues, Mr. Stafford said.

Mr. Stafford also presented information about how much School District 202 can expect to add to its property tax revenues when the next TIFs retire. The West Evanston TIF, the Howard Street TIF and the most recent TIFs – at Dempster/Dodge and at Main/Chicago, will be retired "in the 2020s," he said.

Mr. Stafford said the City presented information about all but the two newest Evanston TIFs at a meeting on Feb. 21.

Below are the TIFs, the year they are expected to be retired, and the amount of money expected to be added to District 202’s tax revenues when the property comes out of the TIF:

• Southwest (Sam’s Club) TIF, expected to be retired in 2015, adding $100,000 to District 202’s property tax revenues. Mr. Stafford said this TIF has been "very successful."

• Howard-Hartrey TIF (Target, Jewel, Best Buy, Office Max, etc.), expected to be retired in 2017, adding $300,000 to District 202’s property tax revenues. Mr. Stafford noted that, while the Best Buy across from Old Orchard Shopping Center is closed, the Best Buy on Howard Street remains open – "adding to Evanston’s sales tax [revenues]."

• Washington National TIF (along the west side of Chicago Avenue, over to Sherman Avenue to Fountain Square), expected to be retired in 2019 and "conservatively" add $1 million to the District’s property tax revenues. "Its original [base] value was $27 million; now its value is over $100 million," Mr. Stafford said.

• Howard/Ridge TIF (195-unit rental apartment complex at 415 Howard St. and other adjacent property), expected to be retired in 2027. "Money is still owed to the developer," said Mr. Stafford, adding that some TIF funds have been used to stimulate economic growth in that area of Howard Street.

• West Evanston TIF, (roughly from Emerson Street to Greenleaf Street along Dodge Avenue, excluding residences), expected to be retired in 2028. "Funds are starting to be accumulated in this TIF," Mr. Stafford said. Because it is adjacent to the high school, the City and the high school "have had very good discussions" said Mr. Stafford. Among the topics are the bicycle paths along Church Street and Dodge Avenue, additional lighting around the school,"some more safety measures to make sure our students feel comfortable and the community feels comfortable," he said.

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