2003-64 ADOPTING AND APPROVING THE NEAR NORTH REDEVELOPMENT PLAN

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I. Introduction Use of Tax Increment Financing As part of a strategy to encourage managed growth, prevent future deterioration, and stimulate private investment in its inner city, the City of Decatur is proposing to engage in the Near North Redevelopment Project. As proposed, this redevelopment effort will address a significant need in the city of Decatur; encouraging new investment in an inner city neighborhood and preventing further deterioration of the City's tax base. The City of Decatur is proposing the use of tax increment financing, a discussion of which follows: Under the Tax Increment Allocation Redevelopment Act (65 ILCS 5/11-74.4-1 et seq., as supplemented and amended, the "Act"), the City of Decatur, Illinois (the "City") anticipates designating the Near North Redevelopment Project Area as a "Redevelopment Project Area" under the Act (the "Redevelopment Project Area"), prior to which the City shall have adopted and approved this "Near North Redevelopment Project and Redevelopment Plan" as a "redevelopment plan" (the "Redevelopment Plan") and "redevelopment project" (the ' "Redevelopment Project") and the use of tax increment finance ("TIF") in connection with the payment of qualifying "redevelopment project costs", (the "Redevelopment Project Costs") � under the Act and implementation of this Redevelopment Plan and Redevelopment Project in I twenty-three years,but with the receipt of the 23`d year of incremental taxes in the 24`h year. �I In January 1977, the Illinois General Assembly passed the initial version of�the present Tax ` Increment Allocation Redevelopment Act. This legislation was the initial authorization of "tax increment financing," (TIF) in Illinois. The General Assembly amended the Act a number of times � and it is now in 65 ILCS 5/11/74.4-1 et seq. (the "Act"). The Act provides a means for municipalities, after the approval of a Redevelopment Plan and Redevelopment Project, designation of the Redevelopment Project Area and adoption of tax increment finance, to I redevelop blighted, conservation, or industrial park conservation redevelopment project areas and to finance "Redevelopment Project Costs" (Redevelopment Project Costs) with "incremental property tax revenues" (Incremental Property Taxes). Incremental Property Taxes are derived � from the increase in the current equalized assessed valuation (EAV) of real property within the Redevelopment Project Area over and above the Initial EAV of the real property. Any increase in EAV is then multiplied by the current tax rate, which results in the amount of Incremental ( Property Taxes. The Act defines a number of eligible items that may be Redevelopment Project Costs under the ( Act. Incremental Property Taxes may pay for many of these Redevelopment Project Costs. In addition, a municipality may pledge as payment additional revenues including revenues derived from the Redevelopment Project Area, municipal property taxes, sales taxes, state income tax, � revenue sharing receipts, and/or other non-designated revenue sources, bonds backed by the general obligation of the municipality or payable solely by Incremental Property Taxes and/or ' other specified revenue sources. � ' 1