CITY OF GALESBURG

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 State Historic Preservation Office (IL SHPO), 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.)
www2.illinois.gov/dnrhistoric/Preserve/Pages/Funding.aspx
 
25% ILLINOIS HISTORIC TAX CREDIT PROGRAM
On May 31, 2018, the Illinois General Assembly passed Senate Bill 3527. The Historic Preservation Tax Credit Act will go into effect January 1, 2019 and, per the new law, will end on or before December 31, 2023.
The tax credit is for the substantial renovation of commercial, agricultural, industrial, or rental residential buildings that are income producing properties and certified as historic structures. The credit may be subtracted directly from State income taxes by the owner.
This program is administered by the Illinois State Historic Preservation Office (IL SHPO). To be eligible for the new program, project must concurrently apply for the 20% Federal Historic Tax Credit through the IL SHPO. Each qualifying project can apply for 25% of its qualifying rehabilitation expenditures (QREs) up to a total of $3 million in state income tax credits. The 20% Federal and 25% State tax credits could both be used on a project if approved by the IL SHPO.
www2.illinois.gov/dnrhistoric/Preserve/Pages/Funding.aspx
City of Galesburg, 55 W. Tompkins Street, Galesburg, IL 61402-1387, Phone: 309-343-4181