By Jim Hagerty
Rockford aldermen are considering turning one of the city’s most blighted areas into its 33rd TIF district, according to talks at a special Tuesday, Feb. 18, meeting of the Rockford City Council.
The new TIF (Tax Increment Financing) district would cover the Auburn Street area, from Day to Kilburn avenues, in the Seventh Ward. There, the vacant Amerock building is flanked by other distressed properties that continue to bring the area down.
By making Auburn a TIF district, leaders say the area would again be desirable for existing and future businesses.
“I think the businessmen on Auburn, especially Auburn Street businessmen (are) going to be very, very pleased,” Ald. Ann Thompson-Kelly, D-7, told reporters outside Council Chambers.
The council could vote on the matter as early as next week.
Meant to increase property values, TIFs can leave an area with even more blight and disastrous consequences if they fail to pay off. So is the case for almost all of Rockford existing TIF districts.
Of the city’s 32 TIFs, 27 decreased in value last year. That means Rockford taxpayers could be on the hook for more than $7 million in losses when property value are sorted out.
While losses be attributed to declines in real estate values throughout the state, Thompson-Kelly said key buildings in her ward could spark growth and create jobs.
The Amerock building, at Central and Auburn, could anchor the 33rd TIF district, aldermen said.
In a TIF district, a municipality lends against projected increases in real estate tax revenue on properties before they are redeveloped. Funds are distributed to property owners within the district to finance improvements. As redevelopment occurs and values increase, the difference between the original tax revenue and new revenue generated after properties are improved, represents the Tax Increment. In short, a municipality recoups its investment in a TIF project by capturing the Tax Increment.
When property values fail to increase in spite of redevelopment, cities often turn to taxpayers to recover the losses.
The Rockford City Council meets every Monday in Council Chambers, inside City Hall. This week, aldermen convened Tuesday, as all government offices were closed Monday, Feb. 17, in honor of Presidents Day.