PEORIA -- TIFs, tax increment finance districts, stimulate economic development but also take $7.6 million out of Peoria County's tax revenues every year.
Most of money goes to the developers of these districts, while some goes to local governments to build infrastructure for the districts. The city of Peoria loses $5.3 million of that total.
The county has 20 TIFs, 10 in the city of Peoria.
The Peoria Area League of Women Voters heard a panel discussion on TIFS on April 18. The speakers were Gabe McLeod, assistant chief deputy in the Peoria County Clerk's office;
Beth Ruyle, vice president and financial advisor of Ehlers Inc., a public finance consultant; and her husband, Craig Hullinger, director of Economic Development for Peoria.
TIFs are complicated financial instruments used as vehicles to rebate taxes paid on the increases in the assessed valuation of properties in their districts after development -- condos, restaurants, stories, other businesses -- have been constructed.
TIFs are incentives to developers who otherwise would go to "green field" sites that are cheaper to develop, the panelists said.
TIFs expire after 23 or 35 years, then the increased tax revenues go to all taxing bodies.
Hullinger said the average growth in valuation is 7.2 percent in Peoria's TIFs, compared with 1.6 percent growth in the city as a whole.
This development in Peoria's inner city would not take place without the TIF incentives, he said. The physician who developed the Illinois Medical Center got $4 million for the parking deck from the TIF, he said.
Without a TIF, the proposed Marriott Hotel in downtown Peoria "won't happen," he said. The new Embassy Suites hotel in East Peoria also was done with a TIF, he added.
Asked about demolition of a historic block in downtown Peoria to make way for the suburban-style Marriott, he said "this is a tough problem."
His answer came after he had praised Peoria's historic buildings as ripe for redevelopment. They have "great bones," he said.
Do we keep two-story buildings, or their facades? he asked of the Peoria block. The Marriott developers considered a tower behind the facades but rejected the option, he said.
Ruyle said recent legislation has added new historic preservation requirements.
Hullinger said Missouri has laws more favorable to historic redevelopment than Illinois laws. Still, the Pere Marquette will get a 20 percent federal tax credit for its $30 million restoration, he said.
He prefers paying developers gradually, over the life of the TIF, but all kinds of deals are negotiated.
Peoria's Midtown Plaza, a TIF which recently saw the closure of a Cub Foods, was carved out of a neighborhood on Knoxville which was not blighted. This controversial TIF likely caused a city council member to lose her bid for reelection.
Ruyle said two other Cub groceries in TIF districts have closed in Illinois, in addition to the store in Peoria. She attributed it to the narrow profit margins of grocery stores.
Hullinger was asked what the city can do about vacant buildings that are deteriorating and ripe for redevelopment.
"Every city has derelict properties somebody's sitting on," he responded. "They're goofy, they're waiting" for the right offer, he said. The only alternative is for the city to threaten demoliltion, and "we don't want to do that."
-- Elaine Hopkins
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