TAX INCREMENT FINANCING (TIF)

The Ottawa Industrial Park (OIP) is located in the OIP Tax Increment Financing District.  
The TIF District enables Ottawa to share the increase in real estate taxes generated by development with the developer to offset a wide array of development costs.

Dayton North and I-80 Commercial TIF Map


ENTERPRISE ZONE (EZ)

The Ottawa Industrial Park is located in the Ottawa Enterprise Zone which provides the following advantages:

  1. 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.
  1. 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.
  1. 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 5 eligible employees must be hired to qualify for the credit.
  1. Utility Tax Exemption.– A State utility tax exemption on gas, electricity and the Illinois Commerce Commission (ICC) administrative charge is available to businesses in the EV which make a $5 million investment which causes the creation of full-time 200 new jobs or $20 million investment for the retention of 1,000 full-time jobs in Illinois.
  1. Machinery and Equipment/Pollution Control Facilities Sales Tax Exemption –A waiver of the 6.25% sales tax on purchases of tangible personal property to be used or consumed in the manufacturing or assembly process or in the operation of a pollution control facility.  Eligibility is contingent upon business making a $5 million investment causing the creation of 200 full-time jobs in the EZ or a $40 million investment causing the retention of 2,000 full-time equivalent jobs in the EZ or an investment of $40 million causing the retention of 90% of the existing jobs.

Enterprise Zone Map
Enterprise Zone Incentives – Detailed PDF


FINANCING OPTIONS

  1. Upper Illinois River Valley Development Authority
    Tax exempt bonds such as industrial revenue bonds used for manufacturing activities.  Taxable bonds for non-manufacturing purposes such as commercial, industrial, transportation and distribution facilities.  Long term financing, low interest rates, flexible terms, favorable requirements, quasi-state guarantee.
    Contact:  Andrew Hamilton – 866/325-7525
  1. Illinois Finance Authority
    Low cost non-conventional financing plus hands-on support for businesses.  Financing for land, new building, renovation or equipment.  Interest rates below prime.  Ten year term.
    Contact:  Richard Frampton – rframpton@il-fa.com
  1. USDA Rural Development — Business Industrial
    Loan guarantee program can be used for land and building, new construction or renovation, equipment, working capital plus refinance
    Contact:Ottawa USDA Rural Development office at 815/433-0551, ext. 4
  1. City of Ottawa Development Industrial Commission
    City participates with local lender. Job retention or creation.  Low interest rate. Ten year term. Contact:  William Franklin — 815/228-2335

FEDERAL PROGRAMS

  1. Small Business Administration 504 Loan Program
  2. Acquisition of long term machinery and equipment, land, improvements, construction, remodeling

Contact:  Dave Noble, City of Ottawa, for local SBA lenders (dnoble@cityofottawa.org)

  1. Foreign Trade Zone #176

FTZ area considered to be outside of the United States.  Customs duties can be Reduced, deferred or eliminated.

Contact:  Anna Garrison — 815/969-4261 (agarrison@rockfordIL.com) – FTZ managed by Rockford Area Economic Development Council (RAEDC)


STATE OF ILLINOIS PROGRAMS

1. Economic Development for a Growing Economy (EDGE)
Note:   The EDGE program has very recently been reauthorized by the State and is being revamped so will need to update this item when the changes are announced. Advantage Illinois

A standard Participation Loan Program (PLP) which is designed to enable small businesses to obtain medium to long-term financing in the form of term loans to help grow and expand their businesses.  State participation is subordinated to the private sector lender.  The program provides a “below market” interest rate to the business being financed.

Contact:   These programs are offered by the Illinois Department of Commerce and Economic Opportunity (DCEO).  The DCEO contacts are Adrian Madunic, DCEO Northwest Region Manager — mobile — 217/299-5532 (Adrian.Madunic@illinois.gov) and Lee Trotter, Northwest Region Account Manager — mobile 309/582-4090, office — 309/596-4027 (lee.trotter@illlinois.gov)


SPECIAL NOTE

The City of Ottawa employs a State government lobbyist/consultant with major Illinois State government experience — including service as the principle assistant to the Director of the Illinois DCEO.  Potential Ottawa investors have the opportunity to use his services to assist in pursuing the maiimum amount of State of Illinois incentives.