Westin Packaged Meats, Fairbury Nebraska
Fairbury Community Redevelopment Authority, Nebraska

The City of Fairbury Community Redevelopment Authority utilizes several incentives to assist developers with projects in redevelopment areas. Click here for map

TAX INCREMENT FINANCING

Tax Increment Financing (TIF) is primarily designed to finance the public costs associated with a private development project. Property tax increases resulting from a new development are targeted to repay the public investment required by a project. There are 4 Redevelopment Areas within the Fairbury community where TIF can be utilized as an incentive. TIF provides a means of encouraging private investment in deteriorating areas by allowing city governments to capture all property tax revenue increases to repay the public investment needed to attract development. Under Nebraska law, TIF can only be used in redeveloping substandard and blighted areas within a community. TIF projects may be commercial, residential, industrial, or mixed use. Generally, TIF funds can be used for land acquisition, public improvements and amenities, infrastructure, and utilities. Every TIF project evaluation must include a cost-benefit analysis.

What is TIF Financing?

TIF is a method to use future gains in taxes to finance current improvements. When a development or public project is carried out, there is often an increase in the value of surrounding real estate, and perhaps new investment (new or rehabilitated buildings, for example). This increased site value and investment sometimes generates increased tax revenues. The increased tax revenues are the “tax increment.” Tax Increment Financing dedicates tax increments within a certain defined district to finance debt issued to pay for the project. TIF is designed to channel funding toward improvements in distressed or underdeveloped areas where development might not otherwise occur. TIF creates funding for “public” projects that may otherwise be unaffordable to localities, by borrowing against future property tax revenues.

EXAMPLES OF ALLOWABLE TIF EXPENDITURES

Formula to determine increment for TIF: A-B x R = I I x Y = T

A = Value After
B = Value Before
R = Rate
I = Increment
T = Total Value
Y = Number of Years