Tax Incremental Financing

Tax Incremental Financing or TIF is a method of generating revenue for the implementation of the plans developed for the Redevelopment and Economic Development Areas.

When a TIF area is established, any increase in real property assessed value due to new investment is attributed to the TIF, and the taxes generated by the increased assessed value are deposited in the TIF Allocation Fund. This is referred to as the TIF increment.

The assessed value of the area before the TIF area is established is referred to as the “base” assessed value. Taxes generated from the “base” continue to go to the local taxing units, just like they did before the TIF area was established.

The City of South Bend has 4 Redevelopment areas and 2 Economic Development Areas as follows:

Redevelopment Areas

  • South Bend Central Development Area
  • West Washington Development Area
  • Northeast Neighborhood Development Area
  • Southside Development Area

Economic Development Areas

  • Airport Economic Development Area
  • Douglas Road Economic Development Area

Most often in South Bend the boundaries of the TIF Area are the same as those of the Redevelopment or Economic Development Area. However, in the South Bend Central Development Area there are 2 TIF areas, in the Southside Development Area there are 3 TIF areas, and in the Northeast Neighborhood Development Area there are 2 TIF areas.

Use of TIF Revenues

TIF revenues can be used to fund local public improvements in or serving the TIF area. Local public improvements mean the following:

  • buildings
  • parking facilities
  • acquisition of land, rights-of-way, and other property to be acquired and redeveloped
  • all architectural, engineering, legal, financing, accounting, advertising, bond discount, and supervisory expenses related to the acquisition and redevelopment of the property or the issuance of bonds
  • capitalized interest and a debt service reserve for the bonds
  • other local public improvements such as streets, water, sewer, curbs, sidewalks, etc

These expenditures can be paid directly from TIF revenues, or through the issuance of bonds, or by reimbursement to the City.