TAX INCREMENT FINANCING (TIF) DISTRICT
Virtually all of downtown Ottawa is located in the Downtown Increment Financing District. This TIF District enables Ottawa to share the increase in real estate taxes generated by development with the developer to primarily offset the cost of commercial building renovation.
ENTERPRISE ZONE (EZ)
Downtown Ottawa is located in the Ottawa Enterprise Zone which provides the following advantages:
- Sales Tax Exemption -- Local sales tax deduction of 1.75% and State sales tax
deduction of 5% on building materials purchased in Illinois and used for real property
construction, rehabilitation and renovation within the EZ.
- Investment Tax Credit -- A State investment tax credit of 0.5% is allowed for qualified
property located in the EZ. Qualified property includes machinery, equipment and
buildings. This credit may be carried up to five years.
- Job Tax Credit -- Allows a business a $500 credit on Illinois income taxes for each job
created in the EZ for which a certified dislocated or economically disadvantaged person hired. The credit may be carried forward for up to five years. A minimum of five (5) eligible employees must be hired to qualify for the credit.
FACADE IMPROVEMENT PROGRAM
Owners of commercial buildings and tenants of these buildings in downtown Ottawa are encouraged to improve the facades of their buildings and thus the appearance of the downtown through participation in the City of Ottawa Facade Improvement Program. The Facade Improvement Program has the following features:
- Reimbursement grants are provided to owners or tenants of eligible buildings for a
portion of the cost of facade improvement projects.
- Eligible project costs include professional and consulting fees, facade cleaning, tuck
pointing, painting, reconstruction, rehabilitation and restoration of the facade, exterior lighting, awnings/canopies and signage.
- The City of Ottawa will provide matching funds for up to fifty percent (50%) of the actual,
eligible costs of the project not to exceed $250 per lineal foot of the front of the building;
$125 per lineal foot for the side of a corner building along a public street and $100 per lineal foot of the rear of the building.
- In order to be eligible for the program, the commercial building must be located in
the Downtown TIF District and/or the Commercial Historic District.
HISTORIC BUILDING TAX CREDIT
Downtown Ottawa’s beautiful and historic architecture has been recognized by the inclusion of almost all of downtown Ottawa in the Ottawa Commercial Historic District which is listed on the National Register of Historic Places maintained by the United States Department of the Interior.
- Each of the 156 structures identified as “contributing structures” within the District are
eligible for participation in the federal Historic Preservation Tax Credit program. This
means that virtually all of the historic commercial buildings in downtown Ottawa are
- This program provides a 20 per cent federal income tax credit to the owners of income-
producing historic buildings that undergo substantial rehabilitations. A credit equal to 20% of a rehabilitation’s qualified expenditures may be subtracted directly from the owner’s federal income taxes.
- The building must be used for income-producing purposes such as rental-residential,
commercial, agricultural, and/or industrial. The rehabilitation (both interior and exterior)
must meet the U.S. Secretary of the Interior’s “Standards for Rehabilitation”. The project’s budget must exceed the greater of the building’s adjusted basis (roughly the current depreciated value of the building, not including land) or $5,000.
- Before beginning any rehabilitation program, it is strongly recommended the building
owner contact the Illinois State Historic Preservation Office (IL SHPO):
IL SHPO -- Tax Incentives Coordinator
Illinois Department of Natural Resources
1 Natural Resources Way
Springfield, Illinois 62702