Overview of the City of Warrenville Tax Increment Financing (TIF)
Districts #1 Cantera and #2 Old Town Triangle

I. What is a TIF District?

Tax Increment Financing (TIF) is a local economic development tool, created by the state, giving municipalities the authority to designate areas of the community as TIF Districts for the purpose of eradicating deteriorated conditions and to undertake redevelopment, rehabilitation, and conservation measures within the district.

Once the TIF district is adopted, the assessed value of all of the property within the TIF District is established or “frozen” at the same level for the life of the TIF District for all overlapping districts, including the applicable city property tax levies. Over the life of the TIF, the assessed value of the properties within the TIF District will likely increase due to redevelopment, public improvements, removal of deteriorated structures, and normal real estate market value increases. The main revenue source for the standard TIF district is the property “tax increment”, which is the difference between the frozen property assessments from the start of the TIF, and the increased value of the assessments during each successive year of the TIF.

TIF Districts in Illinois also may be set up as Utility Tax and/or Sales Tax TIFs. Either of these would utilize the revenue from sales taxes or utility taxes generated within the TIF District to provide revenue to the TIF municipal account in addition to the property tax revenue.

II. The City of Warrenville TIF Districts

A. TIF District #1 - Cantera (see TIF map)

Cantera TIF # 1 is a sales tax TIF. In addition to the property tax increment, the revenue sources include the municipal sales taxes generated within Cantera and state shared sales tax revenues.

In 1994, the City and Warrenville Development Limited Partnership (WDLP, the Cantera developer), approved and signed the Cantera Redevelopment and Financing Agreement (RFA). This document controls the development through special “Zoning and Development District” regulations, determines how the TIF revenue will be allocated and shared between the City and WDLP, and provides for the installation of public improvements and the issuance of TIF Developer Notes to reimburse the developer for those improvements (see Note 1)

• TIF District #1 Amended Area

In February 1991, the City amended TIF District #1 and added more area (see TIF maps). Although this area was added on to TIF District #1, it is part of Cantera and is not part of the sales tax TIF. Five hundred thousand dollars in TIF bonds were issued and properties were purchased at Warrenville Road and Second Street as a TIF project. This area provides the critical link between TIF #1 and TIF #2 which allows the flow of funds between the two TIF Districts.

Revenue comes from the property tax increment and has come from rental income from properties the City has now demolished.

B. TIF District #2 - Old Town Center (see TIF maps)

The Old Town Center TIF is a Conservation TIF District established to remove deteriorated structures and improve the public infrastructure. The TIF receives revenue from the property tax increment resulting largely from the increasing real estate value of properties located within the TIF. The largest share of TIF #2 project funding comes from the flow of TIF money from TIF #1 to TIF #2.

III. What are the Overlapping Districts?

A. TIF #1

DuPage County
DuPage County Forest Preserve
DuPage County Airport Authority
Naperville Township
Winfield Township
City of Warrenville
Naperville Park District
Warrenville Park District
Warrenville Fire Protection District
Warrenville Library District
Unit School District #200 (Wheaton-Warrenville)
Unit School District #203 (Naperville)
College of DuPage 

B. TIF #2

DuPage County
DuPage County Forest Preserve
DuPage County Airport Authority
Winfield Township
City of Warrenville
Warrenville Park District
Warrenville Fire Protection District
Warrenville Library District
Unit School District #200 (Wheaton-Warrenville)
College of DuPage

IV. Intergovernmental Agreements/Sharing TIF Revenue with Overlapping Districts

A. August 1995 with Warrenville Park District in the amount of $45,350 for the renovations to the Leisure Center (TIF #2 project)

B. February 1997 with the Warrenville Fire Protection District for the purchase of a new ladder truck in the amount of $980,000. The Fire District purchased the truck and the City makes annual payments in the amount of $90,500 per year over a ten-year period (TIF #1 project).

C. August 1997 with Warrenville Park District in the amount of $38,000 for improvements to ball fields (TIF #2 project)

D. March 1999 with Warrenville Park District in the amount of $3,684 for the purchase of a new furnace for the Leisure Center (TIF #2 project)

E. July 1999 Warrenville Library District purchase of property and demolition of an existing structure in the amount of $580,000. This land purchase is part of the planned Library expansion project. The Library District purchased the land through the use of an installment contract and the City is making annual payment of TIF funds to the Library District for the principal and interest on the loan (TIF #2 project)

F. March 2000 with the Warrenville Park District in the amount of $24,280 for the purchase of a computer, software, bleachers, and soccer goals (TIF #2 project)

G. March 2000 with all overlapping districts (see Note 2) to repay 25% of the construction costs of the police building. The lump sum payments will be made in 2004 in the aggregate amount of $531,819 and allocated proportionately according to the tax rates in effect in that year.

H. June 2000 with all overlapping districts (see Note 2) to repay 25% of the construction costs of the new city hall building. The lump sum payments will be made in 2006 in the aggregate amount of $583,000 (estimated pending final construction costs) and allocated proportionately according to the tax rates in effect in that year.

I. August 2000 with all overlapping districts (see Note 2) to repay 25% of the construction costs of the new public works garage. The lump sum payments will be made in 2008 in the aggregate amount of $575,000 (estimated pending final construction costs) and allocated proportionately according to the tax rates in effect in that year.

J. October 2000 with the Warrenville Fire Protection District in the amount of $110,000 for the purchase of an adjacent lot and demolition of an existing building (TIF #2 project).

K. October 2000 with the Warrenville Fire Protection District in the amount of $21,500 for the grading and paving of the lot purchased under “J’ (TIF #2 project).

L. October 2000 with the Warrenville Library District in the amount of $1,000,000 for the architectural and design services for the Library expansion project.

M. January 2001 with Unit School District #200 in the amount of $1,000,000 for the purchase of technologies paid in the amount of $200,000 per year over a five-year period. This agreement is based on the impact of TIF #1 housing and the number if children attending District #200 schools (TIF #1 project).

N. October 2000 with the Warrenville Park District for the first phase of the Gymnasium project. Expenditures approved to date include $170,000 for the purchase of the Kukla property on Warren Avenue next the Leisure Center. In addition, $50,000 for architectural design services for the Gym was approved, but not yet expended (TIF #2 project).

V. NOTES

1. The Cantera RFA requires TIF #1 to be a sales tax TIF and that revenue be included in the TIF revenue stream.

The Cantera Redevelopment and Financing Agreement (RFA) between the City and Warrenville Limited Development Partnership (LaSalle Partners, Elmhurst Chicago Stone Quarry, and Amoco) was approved in February 1994. It provides for the issuance of TIF Developer Notes by the Developer (WDLP) to partially reimburse the costs associated with the TIF development and public improvements. Section 7 of the Cantera RFA spells out the allocation of the TIF revenue stream. The revenue is divided according to the formula and placed in the TIF Municipal Account and the Public Redevelopment Projects Account.

The TIF Municipal account money is used to pay for capital projects in the TIF districts. The Project Redevelopment Account money is paid out to the Developer to make payments on the interest and principal on the TIF Developer notes.

Exhibits D and D 1 of the RFA list the types of expenditures that are allowed for reimbursement and at what percent they may be reimbursed. Each quarter of the calendar year, the developer submits documents for the issuance of TIF Developer Notes to apply to the completed projects under the eligible expenditures. Once the expenditures and the improvements are reviewed by the City’s consulting engineer, the City Council receives a recommendation form the engineer and City Attorney and then must vote to approve the issuance of the Notes.

2. State law requires the City to pay 25% of the construction costs to the overlapping taxing districts for municipal buildings built with TIF funds. Because the TIF revenue comes from both TIF Districts, all overlapping districts for TIFs #1 and 2 are included in the inter-governmental agreements.

By John M. Coakley, City Administrator, July 30, 2001

More information on TIF Districts can be found at the Illinois Tax Increment Association