Tax Increment Financing (TIF)

The City of DeKalb has two Tax Increment Financing Districts to fund public improvements and incentivize public investment to help revitalize core neighborhoods. These programs support the redevelopment of properties that are not likely to be improved but for the participation of the City through financial incentives and infrastructure spending. TIF #3 encompasses the Central Business District, and TIF #4 focuses on the South Fourth Street corridor from Taylor Street to I-88. TIF #1 and TIF #2 have expired.

Central Business District – TIF #3

The TIF #3 was created in 2019 with the primary purpose to promote continuing commercial and residential rehabilitation and redevelopment in the central business district.

Previously, TIF #1 had supported several significant redevelopment projects in this area. With TIF #1 ending after 2021, the City established TIF #3 to continue the momentum of redevelopment. A number of properties that previously existed within TIF #1 now lie within the boundaries of TIF #3. TIF #3 is substantially smaller in area and revenue than TIF #1 at its height. TIF #1 once comprised about 19% of DeKalb’s corporate limits; TIF #3 is basically the downtown central core following IL Rt. 38 from the NIU lagoon eastward to about Dodge Avenue and extending north and south of Lincoln Highway by about two blocks in either direction.

The following TIF #3 programs were funded in FY2024 and remain available:

  • Architectural Improvement Program (AIP) – This program encourages property owners to maintain the appearance of their downtown properties. Approved projects are considered on a case-by-case basis and may be provided up to $25,000 in matching funding according to a three-tier system: a 50% reimbursement rate is assigned to eligible major capital improvements; a 25% reimbursement rate is assigned to eligible minor capital improvements; and a 10% reimbursement rate is assigned to defray the costs of deferred maintenance. All funding is subject to final approval by the DeKalb City Council.
  • Private Property Rehabilitation – The protocols for the award of larger TIF grants were defined by the Council in 2020. The principal criteria is whether—and how much—the proposed improvement will increase the EAV or valuation of the property upon completion. If a grant larger than $25,000 is approved, the project must amortize the value of the grant from enhanced property tax revenue within the term of the project’s applicable mortgage and promissory note with the City. Upon the expiration of the term, any outstanding balance not offset by incremental revenues over the term of the note would immediately become due and payable. In the calculation and projection of the property tax increment over 20 years, close collaboration with the DeKalb Township Assessor is very valuable. All improvements do not contribute to a higher projected EAV.

For example, the City Council approved a $92,697 forgivable TIF loan for the redevelopment of 151 N. 4th St., a mixed-use building at the southwest corner of 4th and Locust St. The loan, accompanied by private equity, will fund the renovation of the two habitable floors, which currently contain vacant commercial spaces on the first floor and five mostly vacant apartments on the second floor. The substantial list of planned alterations and improvements are expected to increase the property’s EAV from $74,151 to $129,733 over 20 years.

TIF #3 spending projected for FY2025 includes $195,000 for private property rehabilitation, including the AIP, an estimated $290,000 for other capital improvements and $200,000 in TIF surplus distribution.

South Fourth Street – TIF #4

In December 2024, the City Council approved the creation of a TIF District for the South Fourth Street corridor from Taylor Street to the I-88 tollway. The aim is to address deteriorating infrastructure and the loss of commercial activity to restore the corridor as a prominent southern entry point to the City.

Creation of the TIF district followed a nearly year-long, transparent process with multiple opportunities for public input. Beginning in late January 2024, the proposed district was discussed at multiple Council and Joint Review Board meetings. This included an early warning public meeting in August and a public hearing in October. Also, an open house was held at Huntley Middle School in September for residents to ask questions about the proposal.

TIF #4 has been developed in a collaborative process with the other taxing districts in DeKalb, and it will be guided by an intergovernmental agreement modeled after similar joint agreements for earlier TIF Districts. Under this agreement, 30 percent of the revenues will be declared as surplus annually after the first year of the new TIF. The surplus revenue is then distributed to the taxing bodies such as the school district. In the eighth year, the TIF revenue sharing increases to 50 percent. Additionally, this agreement prohibits the City from using TIF revenues to cover administrative costs, and there will be an annual external review of the District’s financials.

The first intergovernmental agreement for the surplus of TIF revenue was approved in 2007. Here, 50 percent of TIF #1 revenues were distributed to the taxing bodies. A similar agreement is in place for TIF #3. It declares 30 percent of revenues as surplus for distribution, an amount that will increase to 50 percent in 2026.

With the approval of TIF #4, the City will next make amendments to the FY2025 budget to reflect its creation. The first revenue for the new district will not be received until later in the year.

The City's TIF Map can be viewed here.

The TIF District Redevelopment Plans can be viewed here.

To learn more about Tax Increment Financing, visit the City of DeKalb TIF FAQs page or Illinois Tax Increment Association’s web page.

TIF Interested Parties Registry

If you are interested in receiving public notices related to the City of DeKalb's TIF districts, please consider registering as an interested party. To apply for the registry, please review the Registry Registration Rules and submit an application via mail or in person at City Hall. The most recent version of the Registry can also be found below. 

TIF Interested Parties Registry Registration Rules
TIF Interested Parties Registration Form
City of DeKalb Interested Parties Registry