2010-04 APPROVING THE TAX INCREMENT PINES SHOPPING CENTER REDEVELOPMENT PLAN

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CU w7' G7 rV treatment and improvement of conservation areas and industrial park conservation areas CL by redevelopment projects is hereby declared to be essential to the public interest. MThese findings were made on the basis that the presence of blight, or conditions which lead Ito blight, is detrimental to the safety, health, welfare and morals of the public. Tax Increment Financing (TIF) has been used by municipalities throughout the State of Illinois ato help revitalize certain areas by eliminating certain blighting conditions and instituting conservation measures in order to encourage private investment and to enhance the tax base. TIF, as a concept, originated in California in 1954 and is currently in use in some form in 47 states. It is a concept that is designed for use by municipalities of all sizes. The largest is the City of Chicago with over 200 TIFs and the smallest is Sauget with a population of 168 and 1 TIF. When a Redevelopment Project Area, or what is commonly referred to as a TIF District, is established pursuant to the Act, the existing equalized assessed value of the property in the district is determined(the "Base"). The real property taxes applied to the base, when collected, is distributed to the school district, the county, the municipality and other taxing bodies. The real property taxes that are applied to the increased equalized assessed value above the Base, when collected, are distributed to the municipality for deposit in a special fund. This is the "Tax Increment." For a municipality to establish a TIF District, the municipality must determine that the TIF District has not been subject to growth and development, as a whole, would not develop without the assistance to be provided by TIF. This is what is known as the "But For" test and is one of the safeguards to prevent the abusive use of TIF. It is important to note that this test does not mean that any new proposed development that is to occur without TIF assistance within the TIF District or that the existence of non-blighted or recent development property will disqualify the District. Rather, you have to look throughout the District to see if the whole area would develop without TIF assistance and not just one or two parcels. Pursuant to TIF, a municipality undertakes certain activities or agrees to pay certain private costs as incentives to make the TIF District attractive for private redevelopment. The costs connected with these actions by the municipality are paid for with the Tax Increment generated by the increased assessed value caused by new private development. The types of activities include, among others: construction of public improvements, acquisition of property, relocation costs, demolition of buildings, site preparation, creation of certain training programs, developing planning studies, the rehabilitation of existing structures and the construction of certain facilities for other taxing bodies (under limited circumstances). The private costs that a municipality can pay include helping to defray part of the developer's interest costs and reducing the cost of land acquisition. The process of establishing a TIF District is very open. Well before the municipality adopts TIF, it must have a tentative plan which describes the proposed boundaries, why the area might qualify as a TIF District, what the municipality intends to do to eliminate problem areas and attract private investment, what the general land uses are proposed to be, what private and public 3