Rock Falls Illinois Economic Development Corp.

Rock Falls Development
309 First Avenue
Rock Falls Illinois, 61071
Phone: 815.626.8053
Fax: 815.626.7851

Incentive Opportunities--Our Goal: Drive Your Initial Project Hurdles Down

Summary of Potential Incentives
Note: This list is not all inclusive. There may be other programs for which you might be eligible depending upon the nature of the project, number of jobs created, and other investment factors. Availability of some of the programs for your project is subject to further eligibility requirements, approval, and, in some cases, program funding.

Contact us for additional information.

Incentive Type	Program	Source	Details
Enterprise Zone	Sales Tax Exemption	State of Illinois City of Rock Falls	Sales tax exempted on all building materials (permanently affixed to real estate) used in any certified construction or renovation of property in the enterprise zone Must register with the e-zone administrator first
	Property Tax Abatement (Property cannot be located in a TIF District)	Local taxing bodies	100% - 5 year Abatement on property taxes on the increase in assessed value attributable to new construction, renovation, or rehabilitation 100% - 10 year Tax abatement on property taxes on the increase in assessed value attributable to new construction, renovation or rehabilitation. Project must create 500 FTE jobs and invest at least $25,000,000.
	Jobs Tax Credit	State of Illinois	$500 per eligible employee hired to work in the zone in the taxable year (minimum of five employees) Eligible employees are dislocated workers
	Investment Tax Credit	State of Illinois	.5 percent credit against state income tax for investments in qualified property placed into service in the zone Qualified property must be (among other criteria) tangible, depreciable, greater than 4 year useful life, increases the adjusted basis of the property previously placed in service Examples: buildings, structural components, elevators, boilers, major computer systems, etc.
	Natural Gas Use Tax Exemption	State of Illinois	Effective October 2003…exemption of a gas use tax imposed on the purchase of natural gas from outside of Illinois for use or consumption in Illinois
	Participation Loan Financing Program	State of Illinois	May be available to companies locating, expanding or retaining jobs in the e-zone
Downtown and Riverfront TIF District	State of Illinois TIF Act	Municipality	Provide opportunity to capture property tax increments for the funding of eligible project expenses such as public improvements, revenue bonds, rehabilitation, etc. Eligible project expenses vary by district and are subject to the discretion of the municipality and it’s TIF Plan.
Electric	Rate Discount Program	Illinois Municipal Electric Agency City of Rock Falls	Customers over 1000 KW: 5 year discount of approximately 3 percent depending on usage and other factors Customers under 1000 KW but over 200 KW: 3 year discount of approximately 3 percent depending on usage and other factors Rock Falls standard municipal electric rates significantly lower than COM ED under most circumstances
Fiber Optic Broadband	Specialized High Speed Fiber Optic Broadband Services and Incentives Program	City of Rock Falls Essex Telecom	The City of Rock Falls Electric Utility has developed a fiber optic network throughout the City with new nodes being added for businesses continuously. The City also has an ownership stake in an OC48 fiber run along I-88, connecting the Rock Falls network to the greater Chicago metro area. Specialized fiber optic broadband programming, dedicated service, and incentives are available through this public-private partnership at very competitive rates
Workforce Training Assistance	Employer Training Investment Program	State of Illinois	Assists Illinois companies in training new workers or upgrading skills of existing workers through either small business (500 or fewer employees), large business, or multi-business components Grants may reimburse Illinois companies for up to 50 percent of the cost of training their currently employed workers
Tax Credits	Economic Development for a Growing Economy (EDGE)	State of Illinois	Provides tax credits to qualifying businesses that create or retain jobs Tax credits vary by project and are available up to 10 years Project must add to the export potential of Illinois and be an expansion of an existing operation or a new location…relocations within Illinois are eligible for consideration Small business component (100 employees or less): must invest at least $1 million and create a minimum of five full-time jobs Large business component: must make a capital investment of at least $5 million and create a minimum of 25 new jobs
Infrastructure	Business Development Public Infrastructure	State of Illinois	Provides low-interest financing to units of local government for public improvements on behalf of businesses undertaking expansion or relocation projects that meet the program criteria and demonstrate great potential for creating and retaining jobs Infrastructure improvements must be made on public property and must directly result in the creation or retention of private-sector jobs
Infrastructure	CDAP	State of Illinois US Government	CDAP is a federally funded program that assists smaller Illinois local governments in financing public facilities, housing rehabilitation projects or economic development needs Grants are made to units of local government and may be loaned to businesses for projects that will create or retain jobs in the community Grant funds may also be used by the local government for improvements to public infrastructure that directly support economic development
Project Specific	Department of Commerce and Economic Opportunity and Illinois Department of Transportation	State of Illinois	The State of Illinois has various other grant and incentive programs that are aimed at addressing specific project needs related to infrastructure and other project specific costs. As a project begins to gel, we recommend establishing an early meeting with the state’s ombudsman so as to develop a customized suite of incentives for your project

New Market Tax Credits Are Available For Rock Falls Development

Reducing Cost of Capital by Up to 30%.
The New Market Tax Credit Program (NMTC) was established by Congress in 2000 to spur new or increased investments into operating businesses and real estate projects located in rural or low-income communities (LIC’s). The NMTC Program is administered by the U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) and plays a significant role in the CDFI Fund’s work to create economic opportunity in communities where opportunity is needed most.

A LIC is an area with census tracts that have a poverty rate of at least 20% or where the median family income for such a tract does not exceed 80% of the median family income for the state. Because of its rural nature, Whiteside County has 5 census tracts that qualify and 2 are located in Rock Falls (qualifying census tracts are 16 and 17).

The NMTC Program has been in existence for over 10 years, and it appears that it can at times be a well-kept secret. In a recent poll of Midwest real estate developers, less than two out of ten developers had ever heard of the NMTC program. However, in 2010 alone, these tax credits provided investments of more than $2,253 billion in real estate development deals, funding close to $10MM sq ft of office space and over 4MM sq ft of retail space.

The NMTC attracts investment capital to low-income communities, or qualified census tracts, such as the two located in Rock Falls, by permitting individual and corporate investors to receive a tax credit against their federal income tax return in exchange for making equity investments in specialized financial institutions call Community Development Entities (CDE’s). A CDE is an organization certified by the CDFI Fund that acts as a financial intermediary through which investment capital flows from an investor to a qualified business located in a low-income community.

The investor receives a tax credit for investing in the CDE. The credit totals 39% of the original investment amount and is claimed over a period of seven years (5% for each of the first 3 years, and 6% for each of the remaining four years). The investment in the CDE cannot be redeemed before the end of the 7 year period.

These equity investments can provide up to 30% of equity to a development project. As an example, a $20MM development project within one of the two qualified census tracts in Rock Falls would generate $7,800,000 in federal tax credits that can be invested into a Rock Falls project by the CDE.

The CDFI Fund allocates tax credits to CDE’s through an annual competitive application process. The CDE applies to the CDFI Fund to receive the authority to allocate a specified dollar amount of tax credits. Upon execution of an Allocation Agreement with the CDFI Fund, the CDE can offer the tax credits to investors in exchange for Qualified Equity Investments (QEIs) in the CDE. The CDE has 12 months to invest “substantially all” of the proceeds from the QEIs into Qualified Low Income Community Investments (QLICIs).

The NMTC Program offers significant economic benefits for all parties involved. It enables low-income or rural communities to attract private investments that result in significant community benefits (e.g. jobs, community facilities, goods and services) and catalyze other private investments; provides local businesses with a flexible source of gap financing; allows CDEs to increase the volume of its lending and investing activities; and rewards investors with a significant tax benefit.

For more information, or to see if your property or project qualifies, please contact Sandy Henrekin at the Rock Falls Community Development Corporation, 815-626-8053, director@rockfallsdevelopment.org.