Miracle Mile II TIF and effects on property taxes – Part 2

Since the city’s economic development tool – the Tax Increment Finance district – is for blighted areas, I drove west on State Street from Mulford to Alpine, pulling into parking lots, writing down the names of businesses in the proposed TIF area to observe, as reported in the Rockford Register Star article, if good things are really happening in this area without any new TIF funding.

The TIF district actually begins just east of Mulford and includes Chase Bank and Rasmussen College, and the Shogun restraurant, across from one of the busiest malls in town, Forest Plaza and their associated businesses.

I then ventured to the Marketplace of Rockford Shopping Center, just west of Mulford on the North side of East State Street and discovered the newly opened Valli Produce, Oscars Pub, Old Time Pottery, Mobile, Culvers and Walgreens.

On the south side of East State Street is Big K-Mart, Kentucky Fried Chicken, Long John Silvers, Dos Reales, Red Lobster, Lino’s, Anderson and the Bachrodt’s auto dealers, Northwest bank and Enterprise Rental with Furniture Row, Denver Mattress, two antique Malls, Advanced Auto Parts and Newton Plaza.

Crossing back on the North side of East State is OSF Hospital, Rockford Gastroenterology Center, Rockford Orthopedic, Rockford Cardiology, the Surgical Medical Building, OSF Speciality Clinic, OSF Medical Group, Davita Dialysis Nephrology Associates, and the OSF Center for Health and a Pain Center – all included in the TIF area.

Further west on East State Street is Office Depot, Auto Glass, Aldi’s Grocery, Panino’s, Road Ranger, Versailles Place, Sherwin Williams Paint and of course, Rockford College with associated businesses, the YWCA, Primary Eye Care, College Center Office Park, Travel Inn, Sweden House, Manhattan Plaza, Forest City Motors, Happy Wok, Luigi’s Pizza, a McDonald’s, Ethan Allen, PNC Bank, Goodwill and CVS drugs.

If East State Street between Alpine and Mulford is now to be considered a “blighted area,” then all of Rockford is blighted. Sure, there are some buildings in need of repair and overdue maintenance on parking lots with weeds growing through the cracks but that’s due to the recession, not blight.

This new TIF district will simply be taking potential tax increases from other taxing bodies – that would be there, but for the TIF – when the economic recovery occurs, which would increase the burden on the taxpayers for the next 23 years!

The JRB meeting may not have even met the minimum requirements of the Open Meetings Act, which requires a quorum to be present to enact any business of a “Public Body” as the defined in 5 ILCS 120/Section 1.02 of the Act, such as dealing with decisions affecting public monies.

The public hearing scheduled for August 20, 2012 on the TIF should be rescheduled to allow the public, at a minimum, to be represented by our taxing bodies at a new JRB meeting.

The taxing districts would have a second chance to attend the JRB meeting representing their districts, their constiuents and their elected representatives, who will have the final input into resubmitted plans or amendments referenced in the law, such as sharing the tax increment with the taxing district’s, through agreements between all parties present.

A 60% vote of our alderman should be the minimum to approve a TIF that will remove any increase in assessed value in such a prime location, for whatever reason, from the taxrolls for a minimum of 23 years.

The burden of the TIF mechanism falls squarely on the taxpayers to make up any difference in their respective taxing districts, including the City’s General Fund, which supports failing TIFs that do not have a positive increment to repay their TIF loans!

One last question comes to mind. Knowing what a TIF is supposed to do – improve the tax base, after using the tax increment – the risk being taken with tax dollars provided by the district taxpayers to improve the property’s value.

The question is – How many times since TIFs were intorduced in Rockford has a TIF property returned to the taxrolls with increased evaluations of such significance to decrease the property taxes of existing taxpayers? When has it ever happened?



  1. I’ve been involved in TIF discussions out my way, and the laws seem to be written so loosely that an open field can be declared “blighted”. It seems to be too easy for the lawyers and politicians to abuse the process, at the expense of other tax-dependent governmental bodies, such as schools and fire districts.

  2. Kkieper

    I was actually surprised to hear my facility was in a “blighted” area…I think this one is reaching pretty far.

  3. Kathy Geyer

    I agree with you on this, Ted. About 5 years ago, when Loves Park was considering the TIF which runs all the way up N. 2nd Street, Woodward was designated as a “conservation” area or a “blighted area,” I don’t recall which. I made my opinion clear at city hall when I realized how much the taxing districts stood to lose. Eventually, Woodward’s assessment was lowered, the TIF went into effect,and then Woodward immediately announced their huge addition (which was scaled back). I have nothing against Woodward, they are a great business and employer, and they made a good business decision. But when residents complain about school tax levies, they should remember this. I think people don’t show up at these meetings for 2 reasons. It is difficult to understand and the other taxing bodies can complain all they want, they have no vote in the matter.

  4. Luke Fredrickson

    An interesting topic, and one where I was hoping to gain some insight, however this post is largely unintelligible.

    Ted, I’m sure you are a whiz with spreadsheets, but you need to burnish your writing skills or enlist a good editor if you expect to effectively communicate with readers. Spellcheck, at a minimum (not “as a minimum”), is recommended.

    I gave up trying to interpret the numerous run-on sentences, the errors in subject/verb agreement, acronyms used without introduction, the mind-numbing list of 50+ businesses, and copy pasted where it makes no sense (see the first paragraph).

    I appreciate your effort but not my headache.

    • Ted Biondo

      Luke, I was tired finishing these posts at 11:55 PM and the second at 1:20AM this morning, they did leave a lot to be desired. I am a wiz with a spreadsheet and after checking spelling and grammer to the extent an engineer can, I tried to make the subject clearer so more people will understand it and not simply assume they will. I corrected the spelling many verb tenses, subject agreement, etc. But I can not change the, how did you say it,” the mind-numbing list of 50+ businesses, and …” The post needs those to show lack of blight to the max. Sorry, I don’t get paid for this blog and spent at least 14 hours investigating, writing and all the other things I must do and my sleep was coming on fast – hope I did better this time?

  5. this is the way rockford and the county want the city to look. empty buildings no business. then cry about later. lets put more on state and perryville and forget about the rest of the county.

  6. Steve Noll

    Your understanding of TIF and how the funds are used is skewed by your need to point out the failures of government. The tax funds from TIF are collected only from the incremental increase in each property’s taxes over 23 years. In other words, the existing tax base is left untouched and taxing bodies all continue to recieve the funds at the current $ amount. They loose only the incremental increase in taxes collected as assesments go up. Nobody gives up anything except the collection of increased revenue. In a town like Rockford, with one of the highest property tax burdens in the nation, the inevitble “give-back” has to occur to make up for those taxes. Do you really think any private business owner, investor, or hospital can continue to invest in its property at the expense of increased taxes when there are choices to locate/invest elsewhere? If not TIF, or other tax incentives like sales tax rebates (Vali Produce), then lower property taxes. Its not a choice of TIF or no TIF. Its a choice of TIF or lower property taxes. The TIF district proposed for Alpine to Mulford will pay for sidewalks, bus stops, traffic improvements, street scapes. Any money that goes back into the hands of private business will only help to increase the assessments of those projects which in turn will pay for all the above. Since the 1% sales tax increase seems to be going elsewhere, this is the current method available to insure tax money is invested in public infrastructure along E State. If you look at the Miracle Mile TIF and its positive cash account and look at the improvements in that area, you can see how a well organized and managed TIF can be a very positive thing for a nieghborhood.

    • Ted Biondo

      I suggest you read the rewritten posts on Miracle Mile II TIFs and the 7 or 8 TIF posts I’ve written before then we can debate. Most of the TIFs are failing to even pay their portion of the loan, Money is taken from a successful TIF and given to a failing TIF or it is supported by the General Fund at Taxpayers expense – it doesn’t work like it is supposed to when the bill was passed – it’s happened more that once – alla Obama wealth share which destroys incentive in the existing TIF to add new businesses, since the tax incrementfund may not be available anymore! Most TIF don’t eve go positive until 2031, 2 years before the 23 years are up. The city can then create a new tiff and start the whole mess over for another 23 years – how old are you going to be to see any increa in the tax base to lower your taxes?

  7. Steve Noll

    Collecting taxes to make public improvements is not “wealth share” as you stated. The TIF is a way to focus funds into an area rather than rely on a 20 year plan. Its a way for a neighborhood to play a more active role in how funds for infrastructure are spent in that neighborhood. If you lived or worked in that area and looked at it closely and watched it decay over the last 5 years, you probably wouldn’t be so flippant about its condition. The City and the community at large should be supportive of our local businesses, property owners, and entrupeneurs by being proactive in encouraging new investment. And the TIF is exactly that. The failed TIFs of the past are in the past. That’s a lesson in what works and what doesn’t.

  8. Truth About Reality

    TIFs do nothing to add growth to the overall economy. All that is being done is rearranging deckchairs on a (probably sinking) ship. Unless this state is turned around and sanity is restored to the business environment, all else will fail.

    A better idea is to return green space to areas that people no longer wish to shop in. A lot of buildings should be bulldozed and recycled if not turned into housing or some other economic use. Cities move, as evidenced in some of the ghost towns in the county.

  9. A TIF district is fine, in theory, for a TRULY “blighted” area. Unfortunately, its overuse and abuse strains the budgets of school districts, fire districts, and others, because they don’t share in the increases in tax revenues that the TIF creates for up to twenty-three years. Those improvements MAY bring additional businesses and residents to the area, increasing demand for public services of all kinds. But those entities, such as fire districts and schools, get no additional funds to help cover the increased expenses that this growth creates.

    There are places where a TIF may be the appropriate action of last resort for a dying neighborhood, but this part of East State Street doesn’t come close to meeting that level of need.

    • Ted Biondo

      Snuss – that’s why I’ve been suggesting that the City administrators share the TIF tax increment in areas that are not truly blighted so that the other taxing bodies get some of the increment, so they don’t have to pay for increased services due to new TIF development.

      I don’t care if they want to call it blighted or not, just let all entities participate for new development that benefits all taxing bodies. I will have my TIF blogs in the paper to morrow or Sunday and Monday. Look for them.

  10. Ted, correct me if I’m wrong, but isn’t Rockford shifting funds between TIF districts, so that better-performing TIFs are subsidizing failing TIFs? That seems to violate how these programs are represented, as the following illustrates:

    The eligible uses for TIF funds are provided in Illinois’ Tax Increment Allocation Redevelopment Act (65 ILCS 5/11-74.4-1 through 11-74.4-11): the TIF Act.

    The Illinois TIF Act generally authorizes that TIF funds may be used for:

    The administration of a TIF redevelopment project.

    Property acquisition.

    Rehabilitation or renovation of existing public or private buildings.

    Construction of public works or improvements.

    Job training.


    Financing costs, including interest assistance.

    Studies, surveys and plans.

    Marketing sites within the TIF.

    Professional services, such as architectural, engineering, legal, and financial planning.

    Demolition and site preparation.

    Some restrictions may apply, so review the full Act for the list of TIF-eligible costs.

    Source: http://www.illinois-tif.com/about_TIF.asp

    I see nothing about transferring funds from one TIF District, to another. This cheats the other Taxing Districts of funds that could otherwise be used to pay off the District’s debt sooner, allowing the other taxing districts to regain their full share of tax revenues.
    If this fund switching IS legal, it certainly stinks.

    • Ted Biondo

      Snuss, the Rockford TIF funding has been shifted to other TIFs but the must be adjacent to the Well-off TIF in order to do the transfer. The code says. ” (D) Deterioration of structures or site
      improvements in neighboring areas adjacent to the vacant land.

      This allows a transfer of money from the 7th Street TIF to an adjacent TIF. That’s another reason that I don’t like the Miracle Mile TIF being adjacent to the proposed Miracle Mile II TIF as I call it.

      This transfer makes the TIF fund like a slush fund with some restrictions and it diverts the reason for the TIF originally to help the 7th Street businesses. There has also been transfers from the East Side TIF to one of the West Side TIFs. Great, Huh.

      I don’t mind having a TIF to maybe get some development that might not occur without the TIF, whether or not the area is blighted by the JRB’s recomendation, just that any new tax increment generated by the TIF is shared by the taxing districts before the 23 year period is up and the taxpayers aren’t paying as much for the increased services of taxing district’s that still have to pay for inflation, etc. over a 23 year period.

  11. Steve Noll

    All the sudden the local Tea Party is worried that the fire department and school district isn’t collecting enough tax revenue. A cynic knows the price of everything and the value of nothing.

  12. Steve Berg

    TIFs are one of the most difficult things to explain in public finance. And, they are ripe for abuse. I have seen them done for a car dealership where the dealer and the lawyer who wrote up the papers get all of the increment for the life of the TIF. I have seen rent seeking developers try to get a TIF district installed in a corn field. Blighted? Perhaps it had corn borers. One of the worst uses of TIF districts is for funding residential housing. The land stays taxed at a low level, while the subdivision normally throws a lot of newly resident kids into the school and park districts. Properly used, a TIF is useful for brownfield redevelopment, if you can survive the Illinois EPA’s regulations, or for fixing up a truly blighted and dilapidated central business district. The TIF Act specifies the standards for what really constitutes blight and dilapidation, but I have never seen any really stringent state review of how well these criteria are met. Normally consultants are hired, and this tends to grease the adoption greatly. I think we need to come up with a better way to fund the redevelopment efforts that is not so prone to abuse and corruption.

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