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Highland uses TIF to protect and enhance commercial tax base

Southwestern Illinois TIF Success Stories

Highland uses TIF to protect and enhance commercial tax base

IBJ Apr14 Page 06 Image 0009By ALAN J. ORTBALS
    The city of Highland was late to the TIF game, creating its first district in 2008 and adding its second just two years ago.
    The first district was created to try to stem the ebbing tide of the commercial tax base on the west side of town. The second helped make the $60 million investment in the new St. Joseph’s Hospital possible.
    While many cities created TIF districts in the 1980s and 1990s, Highland had not taken that route. But city manager Mark Latham was able to show the City Council and others in the community what would happen without a proactive approach.
    Latham said that historically, there was a pretty even balance between the commercial and residential tax bases. The community’s taxing bodies were receiving roughly the same amount from each of the basic sectors. Beginning in the late 1990s, however, an unmistakable shift began to take place with homeowners picking up an ever growing part of the tab.
    “You started to see a decline in corporate taxes and more and more tax burden moving to the residential,” Latham said. “The older job generator’s buildings were 50 to 70 years old and they were declining in property value.”
    It became clear to nearly everyone that the city needed to act to stop the trend and restore the commercial tax base.
    With the support of the other taxing bodies, the city was able to create its two TIF districts in an effort to achieve that goal. In the second district, the city used TIF funds to improve storm water drainage and extend infrastructure out to the 70-acre proposed site for the hospital. In so doing, it improved service to some of the older industrial areas on the community’s north side. Latham saw the creation of the district as preparing the city for growth.
    “Development is always going to shift toward the interstates,” Latham said. “I believe the hospital will end up being the center of the community.”
    To prepare for that eventuality, the city purchased 10 acres of the hospital’s 70-acre site for a new public safety building.
    “Our police department is next to an industrial area and nobody can find it,” Latham said. “It’s the only police department that I’ve ever seen that’s not on a main street near city hall. When we looked at creating the TIF district, we thought it would be good to have a public safety facility out there. It gives us the ability to service what we believe is going to be a growing area.”  
    Part of that growth is expected because the hospital has 35 acres left to attract development. While still early in the process, the city’s efforts are beginning to pay off.
    “We’ve seen the corporate tax base go up a hair,” Latham said. “It’s not making a giant leap but we’re starting to see it stabilize.”

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