Community Development Incentives

 
Planning Department Incentives

The Planning Department administers a number of incentives designed to support and encourage quality development and redevelopment to enhance the economic vitality of our community.  The City works cooperatively with the Knox County Area Partnership (KCAP). Please check out their website (www.knoxpartnership.com) for additional information on these and other incentives. We welcome the opportunity to work with you further and hope that you will not hesitate to contact us directly if there is anything that the City of Galesburg can do to assist with your business needs.

All of the incentives listed below each have their own requirements and stipulations. Not all incentives will be applicable to every project. In some cases, the approval of governmental bodies and public disclosure may be necessary to receive certain incentives. Given that several of these incentives are time-sensitive, we strongly encourage business owners and developers to contact the Planning Department as early as possible in the development process.


ENTERPRISE ZONE
The Illinois Enterprise Zone Act (20 ILCS 655) contains provisions for the Illinois Enterprise Zone program that is administered by the Illinois Department of Commerce and Economic Opportunity (DCEO). The GEZ has an emphasis on development and diversification of commercial, industrial, multi-family or upper story residential in the B3 zoning district . The GEZ is a geographically defined area that covers approximately 3.4 square miles
Enterprise Zone boundary map

GALESBURG INCENTIVES MAY INCLUDE:
Real Estate Tax Abatement- all local taxing bodies are currently participating to provide a 100% property tax abatement on any increase in the equalized assessed value resulting from a project. The abatement is for a 10-year period, or until the expiration of the enterprise zone, and is not to exceed $1 million abated per taxing body. Improvements can be in the form of new construction, substantial renovation or expansion of an existing building. The abatement is only given if the project creates jobs and does not reduce the prior assessed valuation.
Real Estate Tax Abatement Application

State and Local Sales Tax Exemption- on building materials purchased within the State of Illinois and incorporated into real property located in the enterprise zone.
Sales Tax Exemption Application

Construction Permit Fee Waiver- PERMITS ARE REQUIRED, but the fee is waived for building, demolition, electrical, sign, plumbing or heating permits (City Inspection Division); Water Service Tap Fees and Street & Terrace Opening Fees (City Public Works Dept); and Sanitary Sewer Tap Fees (Galesburg Sanitary Dist).

TAX INCREMENT FINANCING
The Tax Increment Allocation Redevelopment Act (65 ILCS 11-74.4-1) allows units of local governments the ability to designate geographic areas within their jurisdiction as TIF districts. TIF is designed to encourage new economic development and jobs through private investment in areas that have proven to be underdeveloped and would not have received such investment "but for" TIF assistance.  If an owner or developer has a project in mind, but there is a gap in the financing to get the project done, TIF assistance may be an option.  A Developers Agreement is required, which will need City Council approval. 

TIF is not an increase in taxes.  It is only a re-allocation of how they are used.  Increases in property taxes experienced by property owners are due to reassessment and rate increases, not TIF. 
TIF Redevelopment Assistance Program Handbook

FAÇADE GRANT PROGRAM
The Downtown Facade Redevelopment Grant Program is a collaborative effort between the City of Galesburg (City) and the Galesburg Downtown Council (GDC). The Program is administered by the Planning Department, with review authority provided by the Facade Advisory Committee (FAC) and final approval through the Galesburg City Council.

The City hopes to encourage private investment in commercial buildings in a geographically defined are of Downtown Galesburg through the façade program which offers financial incentives to businesses to improve the appearance, safety, structural integrity and quality of their storefronts and buildings as a whole.
Downtown Façade Grant Program Handbook

Other Incentive Programs:

HISTORIC PROPERTY TAX ASSESSMENT FREEZE
Managed by the Illinois Historic Preservation Agency , this program can freeze the assessed value of historic owner-occupied, principal residences for a period of 8 years, followed by a four-year period during which the property’s assessed value steps up to an amount based upon its current market value. This results in 12 years of reduced property taxes. http://www.illinois.gov/ihpa/Preserve/Pages/taxfreeze.aspx

20% FEDERAL HISTORIC PRESERVATION TAX CREDIT PROGRAM
Under the provisions of the Tax Reform Act of 1986, a 20% tax credit is available for the substantial rehabilitation of commercial, agricultural, industrial, or rental residential buildings that are income-producing properties and certified as historic. The credit may be subtracted directly from federal income taxes owed by the owner. The Illinois Historic Preservation Agency, Preservation Services division, administers it for Illinois properties. (Note: The U.S. Internal Revenue Service is the final judge of economic matters relative to certified rehabilitations. Therefore, it is advisable that you consult with a tax accountant or lawyer before completing your tax return.)
http://www.illinois.gov/ihpa/Preserve/Pages/taxcredits.aspx
 
10% HISTORIC REHABILITATION TAX CREDIT
The 10% tax credit is available for the rehabilitation of non-historic buildings placed in service before 1936. The building must be rehabilitated for non-residential use. The rehabilitation must be substantial, exceeding either $5,000 or the adjusted basis of the property, whichever is greater. And the property must be depreciable. In order to qualify for the tax credit, the rehabilitation must meet three criteria: at least 50% of the existing external walls must remain in place as external walls, at least 75% of the existing external walls must remain in place as either external or internal walls, and at least 75% of the internal structural framework must remain in place. The tax credit must be claimed on IRS form 3468 for the tax year in which the rehabilitated building is placed in service. There is no formal review process for rehabilitations of non-historic buildings. (Note: The U.S. Internal Revenue Service is the final judge of economic matters. Therefore, it is advisable that you consult with a tax accountant or lawyer before completing your tax return.) https://www.nps.gov/tps/tax-incentives.htm
 
 
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