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Downtown Incentives

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.

  1. Map of Ottawa Downtown TIF Districts

ENTERPRISE ZONE (EZ)

Downtown Ottawa 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.
  2. 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.
  3. 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.
  4. Ottawa Enterprise Zone Aerial Map
  5. Ottawa Area Enterprise Zone Incentives

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:

  1. Reimbursement grants are provided to owners or tenants of eligible buildings for a
    portion of the cost of facade improvement projects.
  2. 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.
  3. The city shall provide matching funds for up to 50 percent of the actual, eligible costs, not to exceed $14.00 per square foot of the building front, $7.00 per square foot for a building side and $4.00 per square foot for a building rear, when eligible.
  4. 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.
  5. Façade Program Boundary Map
  6. Façade Program Application

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.   

  1. 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
    eligible.
  2. 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.    
  3. 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.  
  4. 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
(217) 524-0276
http://www2.illinois.gov/ihpa/Preserve/Pages/taxcredits.aspx