The State of Illinois Created the River Edge Redevelopment Zone Program to stimulate the safe and cost-effective development of environmentally challenged properties near rivers through the use of tax incentives and grants.
The River Edge Redevelopment Zone was setup to create and retain jobs and stimulate business and industrila rentention and growth. What sets it apart from other such programs is an emphasis on returning environmentally challenged sites ("Brownfields") to productive use. The Zone was approved August 27, 2007 and will be in effect for 30 years through the year 2037.
Zone Eligibility Requirements: State Legislature required the City of Rockford to show that the area it proposed to include in the Zone met the following criteria:
* Includes a single, contiguous area that is next to or near a river, the Rock River in our case;
* Covers between 1/2 and 12 square miles (Rockford's is about 8 square miles);
* Exists entirely within the City of Rockford and has at least 100 acres of environmentally challenged land within 1500 yards of the river (Rockford has about 425 acres); and
* Does not include any area included in an Enterprise Zone.
Economic Impact of the River Edge Zone State Historic Tax Credit
View the River Edge Zone map boundaries
River Edge Zone Incentives - The Property Tax Abatement and the Sales Tax Exemption are administered by City staff. The others involve deductions or credits that may be claimed on Illinois income taxes or by contacting the IL Dept. of Commerce and Economic Opportunity (IL DCEO)firstname.lastname@example.org.
Property Tax Abatement - The City portion of property taxes on a parcel may be abated for a period of three years unless the property is in a TIF district or an area designated as a Redevelopment Area under the Industrial Jobs Recovery Law. The amount of the abatement cannot exceed the amount attributable to the construction of improvements or the rehabilitation of existing improvements on the parcel. Applications and details for this abatement are available from the Communtiy Development Department.
Investment Tax Credit – River Edge Zone businesses may claim an extra 0.5% of the cost (“basis”) of qualified depreciable property placed in service in the River Edge Zone as a credit on their state income taxes. This credit is in addition to existing 0.5% investment tax credit allowed all manufacturers in Illinois on state income taxes. Contact the City’s Department of Community Development for State’s definition of “qualified” property.
Sales Tax Exemption – Any building materials used in new construction or rehabilitation of properties located within Rockford’s River Edge Zone and permanently attached to the real estate may be sales tax exempt (8.25%) if a retailer is provided with a Certificate of Eligibility signed by Rockford’s Zone Administrator and a Purchaser’s Statement (both available from the City’s Community Development Department). If materials are purchased outside the State of Illinois, they must be delivered to the address of the property located in the River Edge Zone boundary for the certificate of eligibility to be valid. This incentive differs from the Enterprise Zone and IS NOT available to RESIDENTIAL PROPERTIES located within the River Edge Zone (ONLY COMMERCIAL & INDUSTRIAL). Contact the City’s Community Development Department at 987-5632 for the proper forms and procedure to follow to obtain this exemption. NOTE: You must present both a completed, signed and dated Certificate of Eligibility and Purchaser’s Statement to the building supplies retailer.
Jobs Tax Credit -- Enterprise Zone businesses that hire at least 5 certified "dislocated workers" to work at least 6 consecutive months in the business's taxable year are allowed a credit of $500 per eligible employee on their state income tax. This credit requires a minimum of 5 new hires in one taxable year.
Dividends Deductions -- Individuals, corporations, partnerships, trusts or estates receiving dividends declared by corporations which are located exclusively in Illinois River Edge Zone and which conduct essentially all of their business in the River Edge Redevelopment Zone, may deduct such dividends on state income tax.
Interest Income Deduction -- A financial institution may deduct from its state income taxes, an amount equal to the interest received from business loans for development in the River Edge Zone. But, for the financial institution to receive this deduction, the borrower must have already claimed an investment tax credit for property he/she purchased with the loan.
Environmental Remediation Tax Credit -- Allows for a credit against state iincome taxes for some non-reimbursed eligible costs for remediation work done on a site in the Zone resulting in a "No Further Remediation Letter" being issued and recorded. This requires a joint review by the Illinois Environmental Protection Agency (IEPA) and the IL DCEO. The property must be in IEPA's Site Remediation Program to receive the NFR letter. The credit is 0.25 for each dollar spent for non-reimbursed remediation expenses. The credit can be transferred with the property and carried forward for 5 years. Applications can be obtained from IEPA. Contact Gary P. King, 217/782-0245,
Designated Zone Organizations (DZO)-- A business may receive a deduction against income subject to illinois income taxes for a contribution to a DZO if the project for which the contribution is made has been specifically approved by the City of Rockford and by DCEO. A DZO is an organization that will carry out activities within the Zone that benefit residents and businesses there.
Applicable Grants -- The City of Rockford will be eligible for a maximum of $2,000,000 in grant funds under IEPA's Municipal Brownfields Redevelopment Grant Program. Grant funds in excess of $240,000 (what Rockford would normally be able to appy for) must be used for projects located in the River Edge Zone for coordination of activities related to Brownfields redevelopment ranging from assessment to remediation, including all the reporting required for these activities. These funds are to be used for coordination of activities related to Brownfields redevelopment ranging from assessment to remediation, including all the reporting required for these activities. These funds may only be used on projects that are publicly owned or will be acquired by the City of Rockford.