Neal Smith has achieved a significant appellate victory for the Village of Winfield in a long running dispute with local school districts about the validity of a Village TIF district (“TIF 2”) established under the Tax Increment Allocation Redevelopment Act (TIF Act) (65 ILCS 5/11-74.4-1 to 11-74.4-12). The case is Board of Education of Winfield School Dist. 34 v. Village of Winfield, 2026 IL App (3d) 250182.
The school districts challenged the validity of TIF 2 on several grounds. They argued that the Village did not meet the requirements of the TIF Act in that (1) it did not satisfy the “but-for” test, (2) that the parcels in TIF 2 did not meet the TIF Act’s contiguity and substantially benefit requirements, (3) that the Village failed to show the existence of eligibility factors, and (4) that the Village impermissibly extended the 23-year term of the a TIF district by taking parcels out of a preexisting TIF district and placing them in TIF 2. The appellate court rejected each argument made by the school districts.
Concerning the “but for” test, the TIF Act requires the Village to find that the property proposed to be in the TIF district has not been subject to growth and development through investment by private enterprises and “would not reasonably be anticipated to be developed without the adoption of the redevelopment plan.” This is what is commonly referred to as the “but-for test.” The appellate court agreed with the circuit court’s determination that there was no genuine issue of fact on the “but for” issue and decided in the Village’s favor.
Next, concerning the contiguity and substantially benefit requirements, it was undisputed that the 51 parcels in TIF 2, if properly included, satisfy the TIF Act contiguity requirement. However, the school districts argued that the contiguity requirement failed, claiming that eleven parcels were included solely for the purpose of achieving contiguity and the parcels should not have been included because they did not substantially benefit from TIF 2. The appellate court also rejected this argument.
Concerning the existence of the TIF Act eligibility factors, the appellate court also found in the Village’s favor. At least three of thirteen enumerated eligibility factors must exist for an area to be designated as a TIF district. The Village found that five out of the thirteen factors were present, but the school districts disputed the existence of the conditions. The appellate court disagreed with the school districts, finding that the Village made sufficient findings related to at least three of the relevant eligibility factors to properly designate the area as a TIF district.
Lastly, the school districts challenged the practice the Village used of removing property from another TIF district and putting the parcels in the new TIF 2. According to the school districts, this practice was an end run around the 23-year limitation on the length of a TIF district. The appellate court disagreed with the school districts finding that nothing in the TIF Act prohibits property from being placed in a new TIF district after its removal from another TIF district.
Following the appellate court ruling, the school districts filed a Petition for Leave to Appeal asking the Illinois Supreme Court to hear the case, but on May 27, 2026, the Supreme Court denied the Petion and will therefore not be considering the case.
TIF is a very important economic development tool for Illinois municipalities. If you have any questions about establishing a TIF district or concerning an existing TIF district, please do not hesitate to contact the attorneys at the Bond Conway Smith Law Firm.
And if your municipality is defending a TIF district from a challenge, the attorneys at Bond Conway Smith stand ready to fight to uphold your TIF so that your municipality can implement its economic development plans.