An Illinois State designated River Edge Redevelopment Zone
The River Edge Redevelopment Zone program was created by the State of Illinois to stimulate the safe and cost-effective development of environmentally challenged properties adjacent to or surrounding rivers using tax incentives and grants.
Used to their fullest extent, these incentives can result in significant savings for property and business owners alike, while promoting Aurora’s economy. Goals of the River Edge Redevelopment Zone program include creating and retaining jobs, stimulating business and industrial retention and growth, and returning brownfield sites to productive use.
The Aurora River Zone was certified by the State of Illinois on March 21, 2007 and will expire in 2037. This program provides opportunity for expanded investment in the downtown and areas along the Fox River. Along with existing and economic redevelopment programs, the City of Aurora is committed to healthy redeveloment along the Fox River, and continued investment in the City.
The River Edge Redevelopment Zone program provides for the creation of a Designated Zone Organization (DZO) that will carry out activities that benefit residents and businesses within the Zone. A business may receive a deduction against income subject to Illinois income taxes for a contribution to a DZO if a project for which the contribution is made has been specifically approved by the City of Aurora and DCEO.
The River Edge Redevelopment Zone program is designed to achieve its goals through the use of incentives authorized by State law. Both Sales Tax Exemption and Property Tax Abatement are administered by the City of Aurora Zone Administrator. The others involve tax incentives that may be claimed on your Illinois Income Tax filing. All require a Certificate of Eligibilty issued by the City of Aurora.
Investment Tax Credits
Allows River Edge Redevelopment Zone businesses to claim an additional 0.5% credit on their State income tax for the cost of qualified depreciable property place in service in the Zone.
Dividend Income Reduction
Allows individuals, corporations, trusts and estates to deduct an amount equal to dividends paid to them by a corporation that conducts substanially all of its operation in the River Edge Redevelopment Zone from their taxable income.
Jobs Tax Credits
Allows a business a $500 credit on its Illinois state income tax for each job it creates in the River Edge Redeveloment Zone for which a certificd dislocated worker is hired. The person hired must first be certified by a Local Work Investment agency. To qualify for the credit, at least five such workers must be hired and all five must be employed for at least 180 consecutive days for 30 hours a week in the company’s taxable year.
Building Materials Sales Tax Exemption
Allow for exemptions of sales tax on construction materials for non-residential projects within the River Edge Redevelopment Zone. Forms necessary to claim this “point-of-sales” exemption are available from the City of Aurora zone administrator.
Interest Income Deduction
Allows financial corporations to deduct an amount equal to the interest received for a loan for development in a River Edge Redevelopment Zone from their corporate State Income tax. The loan must be secured by property located within a River Edge Redevelopment Zone.
Property Tax Abatement
The Aurora River Zone may offer property tax abatement for certain areas within the zone. Areas that are also located within a TIF District are not eligible for this incentive. To determine if property tax abatement may be available for your property, contact the City of Aurora zone administrator.
Environmental Remedation Tax Credit
Allows for a credit against State Income Taxes for some non-reimbursed eligible costs for remediation work done on a River Edge Redevelopment Zone site resulting in a “NRF Letter” being issued. This requires a joint review by DCEO and the Illinois Environmental Protection Agency (IEPA). The credit is for 0.25 for each dollar spent for non-reimbursed remediation expenses. For more information, contact the IEPA, Division of Remediation Management.
Historic Preservation Tax Credit
Allows a tax credit against the tax imposed by subsections (a) and (b) of Section 201 in an amount equal to 25% of qualified expenditures incurred by a qualified taxpayer during the taxable year in the restoration and preservation of a qualified historic structure located in a River Edge Redevelopment Zone pursuant to a qualified rehabilitation plan, provided the total amount of such expenditures (i) must equal $5,000 or more and (ii) must exceed 50% of the purchase price of the property (1/1/12-12/31/16).
Under the IEPA Municipal Brownfields Redevelopment program, cities may be eligible for $240,000 in grant funding With the River Edge Redevelopment Zone designation, the City of Aurora will be eligible for an additioanl $1,760,000 ($2M total) in grant funds. The additional eligible funding must be attributable to projects within the Aurora Rive Zone. Funds must be used for coordination of activities related to brownfields redevelopment ranging from assessment to remediation, including reporting requirements. Funds may only be used on projects that are publicly owned or will be acquired by the City of Aurora.
The Illinois Department of Commerce and Economic Opportunity (DCEO) may also provide Capital Improvement Grants that can be used to reimburse the cost of bondable capital improvements needed for the redevelopment project within the zone. These fund may also be used to assist with infrastruction to provide job growth in the Zone with a focus on the re-use of environmentally challenged property. Availablity subject to enactment of the State’s Capital Budget.