The “Tax Increment Allocation Redevelopment Act”, known as the “TIF”
Act, recognizes that many municipalities are stagnant, and suffer
blighting conditions. These municipalities need economic
redevelopment in order to eliminate the blighting conditions or prevent
them from occurring.
The TIF Act provides municipalities with a financing tool which permits
them to offer incentives to private developers, encouraging
redevelopment within their corporate limits. The Act requires the
municipality to follow certain procedures in implementing such projects:
The proposed area must contain several specific characteristics which
qualify the property eligible for redevelopment. These
characteristics and definitions determine whether the area is
“blighted” or “conservation” area, a combination of the two, or an
“industrial park conversation area”.
The municipality receives the real property taxes generated by new
development which exceed the real property taxes derived from the
property in the TIF area prior to redevelopment. The municipality
may use these tax monies to pay certain eligible costs, both private
and public, incurred in the redevelopment.