CITY OF CHICAGO TAX INCREMENT FINANCING PROGRAMS

Tax Increment Financing is a special funding tool used by Chicago to promote public and private investment, jobs and economic development. Chicago has 165 TIF districts encompassing 10 percent of the property tax base and 30 percent of its geographic area. RFMA serves the Kinzie TIF, the Near West TIF and the River West TIF. Return to the Incentives page to see these TIF maps.

TIF funds are used to build and repair roads and infrastructure, clean polluted land and put vacant properties to productive use usually in conjunction with private development. Funds are generated by property tax growth within a designated district over a State of Illinois-mandated 23 years.

When an area is declared a TIF district and property values increase, all property tax growth can be used to fund redevelopment projects within the district. The new “increment” can pay bonds issued to pay upfront costs or can be used on a pay-as-you-go basis for individual projects. Under state law, TIF areas must possess “blighting” factors to be eligible:

Age
Obsolescence
Code violations
Excessive vacancies
Overcrowding of facilities
Lack of ventilation, light, sanitary facilities / Excessive land coverage
Inadequate utilities
Deleterious land use or layout
Lack of physical maintenance
Lack of community planning
Dilapidation or deterioration

Tax Increment Finance District (TIF) “TIF Works” Program

The City offers free employee-training grants for companies under 40 employees in most TIF districts and usually a 25% cost-share for companies above 40 employees. You customize the training to improve your employees’ productivity, safety, operating new machinery, or other needs. In exchange for TIF funding, you must sign a “return on investment” agreement stating that the amount of the training funds equal a resulting increase in your sales or productivity savings. Return to the Incentives page for the TIFWorks Application and Instructions.

TIF-SBIF (Small Business Improvement Fund) matchiNg grants for property improvements

The City offers a matching-grant program to eligible businesses and property owners in TIF districts for property improvement projects ranging from $2 to $300,000 and grants ranging from $1 to $150,000. Annual SBIF grant funding depends on allocations from the City’s Dept. of Housing and Economic Development. Return to the Incentives page for the SBIF Application.

Eligible applicants must satisfy ONE of these criteria:

- Industrial business (wholesale, manufacturing, distribution) with maximum 100 full-time employees OR

- Commercial business (retail, service) with $3 million maximum annual sales for past 3 years OR

- Property owner with $6 million maximum net worth and liquidity maximum of $500,000.

Tax Increment Finance District (TIF) “Streamlined TIF” Program

For projects starting at $250,000, the City offers financial assistance for property improvements based on the expected new property tax differential. 24% of construction costs must be paid to City-certified Minority Business Enterprises (MBE) and 4% to Women Business Enterprises (WBE). Construction employees must be paid “prevailing wages” with Chicago residents performing at least 50% of total construction hours. Return to the Incentives page for the Streamline TIF Application.

standard Tax Increment Finance District (TIF) financing

For projects starting at $1 million, the City offers financial assistance for property developments. Individual agreements are negotiated with the City’s Dept. of Housing and Economic Development.