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The City of Chicago, Cook County and the State of Illinois offer a variety of incentives to encourage businesses to expand or locate in the area.
World Business Chicago (WBC) — a not-for-profit economic development organization focused on advancing Chicago's business environment — has provided a list of incentive programs for companies exploring relocation or expansion in the City of Chicago. Your business may qualify for a package of assistance depending on the size and location of the project and the number of jobs created or retained. Try using WBC's Incentive Program Filter in their Site Selector app to find out more about which incentives may be available to your business.
World Business Chicago can provide an overview of available incentive programs, explain the qualification process and introduce you to the government agencies that determine eligibility. Throughout the application process, WBC works to coordinate the agencies involved to meet your business needs. Contact a member of the WBC staff for more detailed information.
Some of the major incentive programs are outlined below, courtesy of World Business Chicago.
EDGE is one of Illinois’ most significant incentives and is available for investments of $5 million and the creation of 25+ jobs. Companies with 100 or fewer employees can qualify with an investment of $1 million and the creation of 5+ jobs. The EDGE program provides a tax credit allowing qualifying companies to reduce the cost of doing business in Illinois in relation to similar costs in other states. The amount of the tax credit is based upon the amount of Illinois income taxes paid by newly hired/relocated employees (i.e., approximately 3% of a company’s expanded payroll). The credits are available for 10 years and can be carried forward for up to 5 years.
Many municipalities throughout the Chicago region have designated specific areas as TIF Districts. The City of Chicago has been particularly aggressive in the use of this economic development tool. TIF works by capturing the incremental increase in property value brought about by the improvement of a designated area and reinvesting those revenues back into the area, including assisting with project costs associated with further development.
TIF funds can be used to support the new development or the rehabilitation of existing buildings, including:
The program provides expedited access to valuable grants for the improvement of industrial, commercial, retail or residential mixed-use properties TIF districts citywide. The program incorporates an easy-to-use application form and efficient approval process to pay up to 25 percent of renovation, expansion or redevelopment costs. Assistance ranges from $25,000 to $1,000,000. Grants are paid in annual installments to participants following project completion. The grants do not have to be repaid.
Normally, the County assesses commercial and industrial property at 38% and 36% of market value, respectively. However, an incentive is offered to companies that develop new facilities, substantially rehabilitate existing structures (typically excludes deferred maintenance work), or the reutilization of abandoned buildings. Eligible property owners or tenants will be assessed at 16% of market value for 10 years, 23% in the eleventh year, and 30% in the twelfth year. In the absence of this incentive commercial and industrial property would be assessed at the normal County rates. If a property is within an Enterprise Zone, then local taxing bodies may abate the property taxes 100% for up to 30 years.
NMTCs are a financial assistance tool available through the Chicago Development Fund (CDF), a non- profit subsidiary of the City of Chicago. Investors provide CDF with capital, which it uses to make loans to qualified real estate projects. These investors in turn receive NMTCs (a federal income tax credit) that varies with the size of their investment.
With the City’s Department of Planning and Development, CDF has launched three loan programs geared toward specific project types:
Loans are provided with interest rates 2 to 2.5 percentage points below market, loan-to-value ratios as high as 95% of development costs, and the potential for partial debt forgiveness after seven years.
Projects may be eligible for one of these loans programs if they are located in qualified Census tracts and meet other federal NMTC program criteria. See CDF’s Qualifying Areas map for general eligibility throughout the City; specific eligibility criteria vary slightly for each loan program.
An application for NMTC assistance (pdf) and additional program and contact information can be found on the website for the City’s Department of Housing and Economic Development.
An Enterprise Zone is a specific geographic designated by a municipality or the State of Illinois to receive tax incentives and other benefits in order to stimulate economic activity and revitalize the area. Businesses located in Enterprise Zones are eligible to receive various incentives, including:
The Empowerment Zone (EZ) program offers special financing and tax incentives for qualified businesses in order to stimulate private investment and create jobs within designated communities. These incentives include:
Chicago's Empowerment Zone consists of three non-contiguous areas on the City's West, near Southwest and South Sides.
