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Tax Increment Financing (TIF)
Tax Increment Financing, or TIF, is a financial tool used to assist a municipality in redevelopment of a specific area. In order to establish a TIF district, a municipality must determine if the area is eligible as outlined in State Statute. Certain criteria must be met to designate an area as a TIF district. The area must be blighted or it must show signs of becoming blighted. The concept is such that development in the TIF would not occur “but for” the use of TIF funds. Also, the municipality must develop a redevelopment plan for the TIF District, which contains goals and objectives, as well as a budget for expected redevelopment costs. The municipality must hold a public hearing of the Redevelopment Commission to hear testimony from the public.
When an area is designated a TIF district, the amount of property tax the area generates is set as a base EAV (Equalized Assessed Valuation) amount. The EAV is the county Assessor’s way of assigning similar taxes to similar structures and spreading the property tax burden equally. As property values increase, all property tax growth above that amount can be used to fund redevelopment projects within that TIF designated district. The increase, or increment, can be used to pay back bonds issued to pay upfront costs, or can be used on a pay-as-you-go basis for individual projects. At the conclusion of the 23-year period, all property taxes are collected at the increased levels and the increment is no longer collected.
For example if a TIF district is designated and the total EAV is 100,000, then after a few years of redevelopment and investment, the total EAV is 175,000. The property tax paid on the incremental EAV of 75,000 goes into a TIF fund that can be used to pay eligible costs of the redevelopment. The base year amount of property taxes is still distributed to the many taxing bodies. Essentially, that amount is frozen and is paid to the taxing bodies for the life of the TIF, or 23 years.
TIF Financing
State Statute allows certain costs to be financed with TIF funds. These costs include: costs of infrastructure improvements such as water and sewer mains and public garages; land acquisition, demolition of buildings and site grading; bond financing costs and other costs as outlined in the Statute. Will the use of TIF funds to spur redevelopment increase property taxes for residents of the Village? No. Any TIF related obligations the Village commits to will not result in an increase in property taxes for the residents of Arlington Heights.
The Department of Planning and Community Development Department is available to answer any additional questions you may have on tax increment financing in Arlington Heights. Please feel free to e-mail or call (847) 368-5200 with any questions. To obtain more information about TIF in Illinois, visit the Illinois Tax Increment Association's website.
TIF Funds
The Village has used TIF funds to assist with several redevelopment projects in our downtown area. The public parking garages across from Dunton Tower and across from 200 N. Arlington were built and paid for by the Village to provide parking for commuters, shoppers, employees, and for residents of the two buildings. The Village is paying for the garages form the incremental property taxes generated by the property owners in the TIF district. TIF funds have been used to assist in land acquisition and land cost write-downs for Dunton Tower, 200 Arlington Place and Towne Place (201 N. Vail).
This is a common practice in TIF districts not only in Arlington Heights, but other municipalities as well. The incremental tax dollars have also been used for the streetscape program, which includes brick paver sidewalks, trees, decorative benches, and street paving. The Village has also established a Façade Improvement program, whereby TIF funds are used to assist small businesses and property owners with rehabilitation of their storefront facades. This program has been instrumental in preserving the older building facades, which add to the character of the downtown.
TIF Reports
Our TIF Annual Reports are available in PDF format. Depending on your settings, PDFs may open in your browser window or in Adobe. Adobe Reader is a free download. We also invite you to subscribe to TIF Reports and receive notifications when there is an update on this page or to these documents...simply click on the name of the report and you will see an option to Subscribe.
TIF Districts
TIF districts last 23 years. During the life of a TIF, the base year of tax revenues are distributed to the various taxing bodies with the increment in tax revenues distributed to the TIF fund. Once the TIF expires, then the full property taxes paid by each property owner in the TIF are distributed to the various taxing bodies. With a successful TIF, the taxing districts will receive a windfall in tax revenues, particularly the elementary and high schools districts – which have the highest tax rates.
The Village of Arlington Heights has utilized Tax Increment Financing (TIF) to redevelop five specific areas beginning in 1983 with TIF 1 in the southern portion of downtown. The four existing TIF districts comprise only 2.0% of the Village's land area. Status reports on the current and past TIF districts in the Village are shown below...
TIF 1 & TIF 2 | Southern & Northern Portions of Downtown
TIF 1 was established in 1983 and expired in 2006 and comprised the southern portion of downtown. TIF 2 was established in 1986 and expired in 2009. During that time the Village leveraged approximately $50 million in TIF funds to facilitate $200 million in private investment. TIF funds were used for the following: construction of three public parking garages (including the expansion and renovation of the Vail Avenue garage), streetscape / sidewalk beautification of all downtown streets, development of Harmony Park, construction of the train station, acquisition of the Metropolis Performing Arts Theater, loans and grants to renovate the older buildings in downtown, new sewers and street pavement, among other items. All bonds issued by the Village in these two TIF’s were paid off (defeased) on time wholly from TIF increment.
TIF 3 | Southwest corner of Arlington Heights & Rand Roads
TIF 3 was established in 1995 to spur redevelopment of the corner for 52,000 square feet of retail space. Current tenants include Trader Joes and Panera Bread. Funds were used to acquire land, remediate contaminated soils, and relocate a large antenna tower. Approximately $3.0 million in TIF funds were used to leverage $12.0 million in private investment. TIF 3 ended in 2017 after 23 years as allowed per Statute.
TIF 4 | Northeast of Golf & Arlington Heights Roads
TIF 4 was established in 2002 and includes 35 acres, including International Plaza. The Village’s development agreement approved in 2005 to redevelop the site for a SuperTarget store was terminated due to delays resulting from law suits filed against the Village. In January 2006 Judge James R Epstein of the Circuit Court of Cook County ruled in favor of the Village determining that the Village did legally establish the TIF district. In Fall, 2009 Judge Epstein’s ruling was upheld by the First Appellate Court of Illinois, thus confirming that the Village properly declared the area as a TIF district.
As a result of the delays related to the lawsuits and the economic recession beginning in 2007, the Village in 2014 commenced a process to extend the TIF District by 12 years. The Village first obtained support for the 12 year extension from various taxing districts including School District 59 and School District 214. Legislation was introduced in January, 2014 in the State of Illinois House to consider the extension. The legislation was approved by the House in March, 2014 by a 108-3 vote and in May, 2014 by the State senate by a 55-0 vote. The Governor in August 2014 singed the legislation into law.
Over the past several years, the Village has moved forward with acquisition of several parcels of land in order to facilitate redevelopment. Also, in November 2013 the Village Board approved rezoning of 4.5 acres at Council Trail and Arlington Heights Road for a memory care facility, which opened in 2015. More recently the Village Board in 2021 approved an amendment to TIF District 4 to allow for mixed use redevelopment. Since that time the Village has met with interested developers to facilitate potential redevelopment.
TIF 5 | Town & Country and Southpoint Shopping Centers at Rand & Palatine Roads
TIF 5 was established in 2005 and includes two large shopping centers which were distressed with significant vacancies. In 2007, redevelopment of Town and Country Shopping Center was completed and new tenants opened including Dicks Sporting Goods and Ashley Furniture Store. Approximately $4.2 million in TIF funds were used to leverage approximately $24.0 million in private redevelopment. More recently in 2020 the Village Board approved a development agreement with ownership of Town and Country for renovations to attract Amazon Fresh food store and Raising Canes. And in 2022 the Board approved an agreement with the owner of a portion of Southpoint Shopping Center to attract a new At Home furniture store.
Hickory-Kensington TIF | Northeast of Northwest Highway & Kensington Intersection
The Hickory Kensington TIF District was adopted by the Village Board in July, 2014. The District is approximately 36 acres with a primary goal to redevelop an older industrial area for mixed use residential and commercial uses. Prior to approval of this TIF District, in 2013 the Board approved the Hickory Kensington Area Plan which provided the framework for the long term vision for the area. Since that time multiple developments have been built or are under construction including Arlington Market single family homes, Kensington Day Care, and 4 N Hickory – 5 floor 74 unit mixed use development. The TIF District is approximately 36 acres (see TIF Redevelopment Plan for exact boundaries) and see Hickory Kensington Area Plan to learn more.
South Arlington Heights Road TIF
The South Arlington Heights Road TIF District was approved in June, 2020. The area includes approximately 65 acres running along the east side of Arlington Heights Road from I-90 north to Seegers Road. The TIF was created pursuant to the South Arlington Heights Road Corridor Plan approved in 2018, which calls for mixed use residential and commercial redevelopment along this important gateway entering Arlington Heights.
When an area is designated a TIF district, the amount of property tax the area generates is set as a base EAV (Equalized Assessed Valuation) amount. The EAV is the county Assessor’s way of assigning similar taxes to similar structures and spreading the property tax burden equally. As property values increase, all property tax growth above that amount can be used to fund redevelopment projects within that TIF designated district. The increase, or increment, can be used to pay back bonds issued to pay upfront costs, or can be used on a pay-as-you-go basis for individual projects. At the conclusion of the 23-year period, all property taxes are collected at the increased levels and the increment is no longer collected.
For example if a TIF district is designated and the total EAV is 100,000, then after a few years of redevelopment and investment, the total EAV is 175,000. The property tax paid on the incremental EAV of 75,000 goes into a TIF fund that can be used to pay eligible costs of the redevelopment. The base year amount of property taxes is still distributed to the many taxing bodies. Essentially, that amount is frozen and is paid to the taxing bodies for the life of the TIF, or 23 years.
TIF Financing
State Statute allows certain costs to be financed with TIF funds. These costs include: costs of infrastructure improvements such as water and sewer mains and public garages; land acquisition, demolition of buildings and site grading; bond financing costs and other costs as outlined in the Statute. Will the use of TIF funds to spur redevelopment increase property taxes for residents of the Village? No. Any TIF related obligations the Village commits to will not result in an increase in property taxes for the residents of Arlington Heights.
The Department of Planning and Community Development Department is available to answer any additional questions you may have on tax increment financing in Arlington Heights. Please feel free to e-mail or call (847) 368-5200 with any questions. To obtain more information about TIF in Illinois, visit the Illinois Tax Increment Association's website.
TIF Funds
The Village has used TIF funds to assist with several redevelopment projects in our downtown area. The public parking garages across from Dunton Tower and across from 200 N. Arlington were built and paid for by the Village to provide parking for commuters, shoppers, employees, and for residents of the two buildings. The Village is paying for the garages form the incremental property taxes generated by the property owners in the TIF district. TIF funds have been used to assist in land acquisition and land cost write-downs for Dunton Tower, 200 Arlington Place and Towne Place (201 N. Vail).
This is a common practice in TIF districts not only in Arlington Heights, but other municipalities as well. The incremental tax dollars have also been used for the streetscape program, which includes brick paver sidewalks, trees, decorative benches, and street paving. The Village has also established a Façade Improvement program, whereby TIF funds are used to assist small businesses and property owners with rehabilitation of their storefront facades. This program has been instrumental in preserving the older building facades, which add to the character of the downtown.
TIF Reports
Our TIF Annual Reports are available in PDF format. Depending on your settings, PDFs may open in your browser window or in Adobe. Adobe Reader is a free download. We also invite you to subscribe to TIF Reports and receive notifications when there is an update on this page or to these documents...simply click on the name of the report and you will see an option to Subscribe.
TIF Districts
TIF districts last 23 years. During the life of a TIF, the base year of tax revenues are distributed to the various taxing bodies with the increment in tax revenues distributed to the TIF fund. Once the TIF expires, then the full property taxes paid by each property owner in the TIF are distributed to the various taxing bodies. With a successful TIF, the taxing districts will receive a windfall in tax revenues, particularly the elementary and high schools districts – which have the highest tax rates.
The Village of Arlington Heights has utilized Tax Increment Financing (TIF) to redevelop five specific areas beginning in 1983 with TIF 1 in the southern portion of downtown. The four existing TIF districts comprise only 2.0% of the Village's land area. Status reports on the current and past TIF districts in the Village are shown below...
TIF 1 & TIF 2 | Southern & Northern Portions of Downtown
TIF 1 was established in 1983 and expired in 2006 and comprised the southern portion of downtown. TIF 2 was established in 1986 and expired in 2009. During that time the Village leveraged approximately $50 million in TIF funds to facilitate $200 million in private investment. TIF funds were used for the following: construction of three public parking garages (including the expansion and renovation of the Vail Avenue garage), streetscape / sidewalk beautification of all downtown streets, development of Harmony Park, construction of the train station, acquisition of the Metropolis Performing Arts Theater, loans and grants to renovate the older buildings in downtown, new sewers and street pavement, among other items. All bonds issued by the Village in these two TIF’s were paid off (defeased) on time wholly from TIF increment.
TIF 3 | Southwest corner of Arlington Heights & Rand Roads
TIF 3 was established in 1995 to spur redevelopment of the corner for 52,000 square feet of retail space. Current tenants include Trader Joes and Panera Bread. Funds were used to acquire land, remediate contaminated soils, and relocate a large antenna tower. Approximately $3.0 million in TIF funds were used to leverage $12.0 million in private investment. TIF 3 ended in 2017 after 23 years as allowed per Statute.
TIF 4 | Northeast of Golf & Arlington Heights Roads
TIF 4 was established in 2002 and includes 35 acres, including International Plaza. The Village’s development agreement approved in 2005 to redevelop the site for a SuperTarget store was terminated due to delays resulting from law suits filed against the Village. In January 2006 Judge James R Epstein of the Circuit Court of Cook County ruled in favor of the Village determining that the Village did legally establish the TIF district. In Fall, 2009 Judge Epstein’s ruling was upheld by the First Appellate Court of Illinois, thus confirming that the Village properly declared the area as a TIF district.
As a result of the delays related to the lawsuits and the economic recession beginning in 2007, the Village in 2014 commenced a process to extend the TIF District by 12 years. The Village first obtained support for the 12 year extension from various taxing districts including School District 59 and School District 214. Legislation was introduced in January, 2014 in the State of Illinois House to consider the extension. The legislation was approved by the House in March, 2014 by a 108-3 vote and in May, 2014 by the State senate by a 55-0 vote. The Governor in August 2014 singed the legislation into law.
Over the past several years, the Village has moved forward with acquisition of several parcels of land in order to facilitate redevelopment. Also, in November 2013 the Village Board approved rezoning of 4.5 acres at Council Trail and Arlington Heights Road for a memory care facility, which opened in 2015. More recently the Village Board in 2021 approved an amendment to TIF District 4 to allow for mixed use redevelopment. Since that time the Village has met with interested developers to facilitate potential redevelopment.
TIF 5 | Town & Country and Southpoint Shopping Centers at Rand & Palatine Roads
TIF 5 was established in 2005 and includes two large shopping centers which were distressed with significant vacancies. In 2007, redevelopment of Town and Country Shopping Center was completed and new tenants opened including Dicks Sporting Goods and Ashley Furniture Store. Approximately $4.2 million in TIF funds were used to leverage approximately $24.0 million in private redevelopment. More recently in 2020 the Village Board approved a development agreement with ownership of Town and Country for renovations to attract Amazon Fresh food store and Raising Canes. And in 2022 the Board approved an agreement with the owner of a portion of Southpoint Shopping Center to attract a new At Home furniture store.
Hickory-Kensington TIF | Northeast of Northwest Highway & Kensington Intersection
The Hickory Kensington TIF District was adopted by the Village Board in July, 2014. The District is approximately 36 acres with a primary goal to redevelop an older industrial area for mixed use residential and commercial uses. Prior to approval of this TIF District, in 2013 the Board approved the Hickory Kensington Area Plan which provided the framework for the long term vision for the area. Since that time multiple developments have been built or are under construction including Arlington Market single family homes, Kensington Day Care, and 4 N Hickory – 5 floor 74 unit mixed use development. The TIF District is approximately 36 acres (see TIF Redevelopment Plan for exact boundaries) and see Hickory Kensington Area Plan to learn more.
South Arlington Heights Road TIF
The South Arlington Heights Road TIF District was approved in June, 2020. The area includes approximately 65 acres running along the east side of Arlington Heights Road from I-90 north to Seegers Road. The TIF was created pursuant to the South Arlington Heights Road Corridor Plan approved in 2018, which calls for mixed use residential and commercial redevelopment along this important gateway entering Arlington Heights.
Categories always sorted by seq (sub-categories sorted within each category)
Documents sorted by SEQ in Ascending Order within category
Documents sorted by SEQ in Ascending Order within category