When an area or building in DeKalb becomes in need of repair, TIFs, or Tax Increment Financing, can help redevelop the property.

The city of DeKalb created the first TIF District in 1986 to help finance work in the community.

The city gains the money when property value increases. For example, if the base tax was $1,000 and then the next year the property value increases to $1,100, the extra $100 goes to TIF funds.

As the value of property goes up, more tax is generated.

“TIFs are how property is taxed or taxes on sales that is distributed to city bodies,” said 2nd Ward Alderman Kris Povlsen. “The extra monies are used to change and build dilapidated areas.”

Currently, there are three TIF districts.

To become a TIF district, the city identifies an area it thinks might be eligible.

“It has to be considered a blighted area and then a consultant determines through various criterias if it can be an established district,” said Steve Kapitan, 3rd Ward Alderman.

Other taxing bodies then help make the decision if the area can be a TIF district.

In 2003, the TIF funds helped fund support to Barb City Manor for building improvements and repairs and also helped upgrade the Municipal Building.

One property that benefitted from TIF funds was the Freed property on the corner of Bethany and Sycamore Roads.

The property used to attract ducks that left too much waste for the area. The funds were used to clean the area and construct new buildings.

At a recent city council meeting, the council approved a TIF to support DeKalb elementary and middle schools.

The Central Area TIF District goes to improve the downtown area. Money goes to improve building facades, parking and infrastructure along East Lincoln Highway.

One objective is to help the area evolve from a retail into an entertainment and historical/cultural center.

“Over $4 million a year goes to sidewalks, businesses and homes in the district who need improvement,” said Doug Haywood, accounting services manager for the city.

Although NIU isn’t eligible to be in a TIF district, it does affect students.

Students who live in apartments indirectly give money on the funds. Landlords collect rent and then must pay taxes to the city.

“TIFs affect students to the extent that the city is a desirable place to live that improves their [student’s] quality of life as well,” Kapitan said. “The objective is to promote economic development and revitalization of these so-called blighted areas.”

Kapitan said that by upgrading and improving areas in the city, more businesses are likely to build.

TIF money also has been used to remodel buildings in DeKalb.

The most recent remodeling was of Gonterman’s, between First and Second streets.

The building had been covered with modernistic paneling. This past year, the paneling was torn off, revealing the real facade, which was restored.

TIF money can only be used for specific projects and can’t be transferred to other funds such as fire, police and public works.

TIF districts only last as long as it takes to accomplish objectives. After this time, the money goes to the regular taxing bodies.