Court Street TIF District and Business Development District Creation

BUSINESS DEVELOPMENT DISTRICT CREATION
The City of Pekin is considering the creation of a Business Development District (BDD) primarily located along major commercial corridors of the City.  A BDD is a geographical area designated by the City to focus public and private investment in the community.  A BDD in Pekin will help to tackle some of the city’s biggest challenges, including a lack of investment in infrastructure (streets, sidewalks, sewers) and development (new businesses and job creation).  Investments in infrastructure and development would be possible due to funds generated through a 1% increase in sales tax for retail sales located in the BDD.  Court Street, Derby Street, Broadway, North 8th, the downtown area, and businesses in these areas could all benefit from funds coming from the BDD. Envision better roads, greater retail and dining options, a vibrant downtown and more growth happening over the next several years.  This could all be possible through a BDD. 

To lessen the BDD’s 1% sales tax impact on Pekin residents, the City Council is also considering strategies to lower the City’s portion of the property tax by 10%; recognize household savings received through competitively bid electric aggregation rates; and a reduction in the monthly sewer maintenance fee charged to homes. Taken together these savings would substantially reduce the impact of the BDD sales tax to near break-even levels in the first year and substantially lower it in the following years.  The BDD would also allow the City to shift more of the burden for infrastructure maintenance and repair to external users/shoppers of our city. Lastly, there would be a dedicated funding stream for annual infrastructure improvements and business development that will help keep Pekin progressing and growing.

To find out more information, see the below links for the BDD Plan, an area map and links to the PowerPoint presentation provided at the 9/21/2020 public meeting. The City Council is looking to consider the adoption of a BDD at its 9/28/2020 meeting.

9/22/2020 Update
The City Council held a public meeting on 9/21/2020 to discuss the creation of a Business Development District (BDD) and take public comment. Below are links to the PowerPoint presentation on the BDD and a link to the ZOOM meeting. Further information about the BDD (and TIF) are below. 
Additional BDD information is listed below. 


TIF & BDD INFORMATION
 
Tax Increment Financing (TIF) Districts
TIF Districts provide a means in which communities can financially assist in the development or redevelopment of a site or area. Cities can utilize the incremental increase in property tax revenues as a result of a redevelopment project to assist with qualifying development projects.  TIF Districts can only be established in municipalities, and as such, municipalities often consider creating TIF Districts to assist with specific redevelopment projects. 
 
Other times, cities will establish a TIF district to catalyze economic activity in a blighted area.  Using the incremental revenues in the TIF, a community can undertake economic development activities or provide incentives that otherwise might not be possible in order to encourage job creation, increase property values, and to protect the local tax base. Eligible project costs in a TIF can include, but is not limited to: 
  • Rehabilitating, reconstructing, remodeling of existing structures; 
  • Costs of construction of public infrastructure improvements; 
  • Architectural, engineering, legal, financial services; and
  • Property assembly costs such as acquisition, demolition, clearing and grading. 
Business Development Districts (BDD) 
A Business Development District is a legally defined contiguous area of a municipality that has certain powers and authorities different from other parts of the municipality. The purposes of the Business District Development is to strengthen the tax base of the Business District area; to assure opportunities for district development or redevelopment; and to attract sound and stable commercial growth in the District.  A BDD is a defined area within which businesses can levy an additional sales tax on eligible goods sold.  Municipalities may elect to impose this additional sales tax in increments of 0.25% up to a maximum of 1.0%.

As with TIF Districts, the BDD is in place for up to 23 years. Funds generated as a result of this sales tax can then be used for certain eligible costs within the district as prescribed by the Business District Act.  Examples of eligible costs (similar to that of TIF) include: 
  • Building construction costs, including reimbursement payments to private developers;
  • Rehabilitating, reconstructing, remodeling of existing structures; 
  • Costs of construction of public infrastructure improvements; 
  • Architectural, engineering, legal, financial services; and
  • Property assembly costs such as acquisition, demolition, clearing and grading. 
One benefit of the BDD over TIF is that it can help assist on new construction where TIF cannot. In combination, both the TIF and BDD can effectively be used to help fund eligible public works projects such as the restoration of Court or Derby Streets; various sidewalk repairs; or storm water management projects. Funds can also go to help new and existing businesses renovate, expand operations or relocate to a more suitable location.  Additionally, there are no restrictions for TIF or BDD funds to help neighborhoods with housing stabilization, demolition of vacant structures or emergency repairs, as long as, the neighborhoods are located within the TIF/BDD District. 
 
LEGAL DESCRIPTION
 
AREA MAP
Below are links showing the proposed study areas where a new TIF and BDD may be located in the city.
  
TIF REDEVELOPMENT PLAN
Click on the following link for the TIF District Redevelopment Plan
 
BDD REDEVELOPMENT PLAN
Click on the following link for the Business Development District Redevelopment Plan