Eldorado explores TIF District option

The city of Eldorado is on the verge of starting an aggressive - and historic - plan for sustained economic development.

The city is working on setting up its first tax increment financing district, an economic development tool that Illinois has had since 1977, but which Eldorado is first exploring in 2016.

The city wants to use its first TIF to revitalize the downtown, make use of vacant properties scattered around town and to lure business to what vacant parcels remain on the Route 45 corridor.

Although the boundaries of the new TIF district are not finalized, the district will definitely include downtown Eldorado, Route 45, Ferrell Hospital and some residences in that general vicinity.

TIFs work by freezing (on paper) for 23 years the assessment of the property within its borders.

As the area is redeveloped and the actual assessments rise as the properties become more valuable, the additional money generated in taxes is siphoned off into a special fund.

That money is available to be reinvested in the redevelopment - in the form of tax breaks for businesses, improved utilities or new utilities laid, grants for new and existing businesses and more. Even residences in the TIF district can benefit.

Eldorado estimates that over 23 years, it can amass $11.5 million in the tax allocation fund, of which $7.5 million would be available to reinvest in the community, according to the city's TIF consultant, Daniel Schuering, an attorney from Springfield.

"Our dream is to bring in something big," said Eldorado Mayor Rocky James on Wednesday, after the city council held a public hearing on the TIF proposal. "The idea is to help the economy here."

Schuering said after decades of businesses ignoring small towns and wanting to locate only on highways, businesses are now starting to realize the value in coming to downtowns. He added that the benefits of a TIF are for current businesses, not just new businesses.

"Any program to attract new business has to pay attention to existing businesses," he said. "If you kill them off, you haven't gained anything.

Critics of tax increment financing object that the other government units in town - like schools and libraries - get shorted for 23 years. Their tax revenue from the redeveloped area is frozen at the level it is when the TIF district is created.

James and Schuering, however, say the city has pledged to the Eldorado schools that the schools will not suffer by the TIF district.

"They have our word," Schuering said, that an arrangement will be worked out to keep the money flowing to the schools.

No one in the audience Wednesday objected to the TIF's creation.