New Fairview Heights TIF targets growth for St. Clair Square, Lincoln Highway
A commercial area of Fairview Heights, including St. Clair Square, is now part of a new tax increment financing (TIF) district approved by the City Council.
The Fairview Heights Lincoln Highway and 159 TIF district will provide assistance and incentives for property and infrastructure improvements along the city’s high-traffic thoroughfares on the east side, according to the project plan.
“TIFs are important to communities today to help fulfill economic development,” Mayor Mark Kupsky said.
In addition to establishing the new TIF district, the council approved a TIF redevelopment plan and project, and voted to impose an additional 1% tax on retail, service, and hotel businesses within the district.
“This is a great opportunity for the city to have resources to revitalize the area,” said Dallas Alley, director of land use and development.
Area Covered by the New TIF District
The Lincoln Highway and 159 TIF district encompasses 61 parcels of mostly commercial land, totaling nearly 177 acres. Properties include those on the east side of Illinois 159 between Ashland Place and 6600 N. Illinois St. (the former Cheddar’s site), including St. Clair Square. The Shoppes at St. Clair Square, which is already a separate TIF district, is excluded.
“St. Clair Square is still doing well compared to other malls,” Kupsky said, adding there are plans to enhance and improve the mall to maintain a high standard and attract new tenants.
Improvements “will keep the mall relevant not just to Fairview Heights but to the whole metro east,” Kupsky said. “The mall is so important to us.”
The district also includes businesses along Lincoln Highway east of Illinois 159. On the north side, the area extends to Mount Vernon Drive, and to Aubuchon Drive on the south side. These properties are in the city’s Fourth Ward.
“It definitely needs it, that whole area,” Ward 4 Alderman Pat Peck said of the new TIF district.
Ward 3 properties directly south of Lincoln Trail between Illinois 159 and Lanaghan Drive—including St. Clair Crossing, Regions Bank and Midway Plaza—are also part of the district.
When asked why this part of the city had not been included in a TIF district before, Alley said, “There’s not been a time before when the city needed to do this.” Now, he said, the incentive is needed “to keep businesses going in this corridor.”
How TIF funding works
Property values in a TIF district are frozen at current levels when the district is created. For the Lincoln Highway and 159 TIF, the 2024 equalized assessed value of each parcel becomes the base. As property values rise over time, the difference between the base and subsequent tax years’ EAV will be allocated to the TIF fund.
In Illinois, a TIF district’s standard lifespan is 23 years, but the city may extend it up to 12 years or terminate it early if appropriate. Residential properties will not be affected, as the TIF is “designed to fuel older and aging commercial areas,” Kupsky said.
The City Council approved ordinances relating to the new TIF district in separate 9-0 votes at its Sept. 16 meeting. All ordinances are now in effect, according to Alley.
One ordinance establishes new taxes on qualifying businesses, including a retailers’ occupation tax, a service occupation tax, and a hotel operators’ tax, each at 1%. Items exempt from the tax include most groceries, prescription and over-the-counter medications and medical supplies such as needles for insulin shots.
The hotel operators’ occupation tax is a 1% tax on the gross rental amounts for rooms within the district.
Revenue from these taxes, including penalties and interest, will be deposited into the Lincoln Highway and 159 Business District Tax Allocation Fund. The business district taxes will take effect in the first quarter of 2026. Alley estimated projected revenue at about $1 million per year, providing further incentive for redevelopment.
According to the Business District Law, the additional tax revenue can be used for property acquisition, site preparation, construction of public improvements (such as streets and utilities), and costs for studies, surveys, and project plans.
However, TIF revenue may take longer to materialize, as property values must increase. It’s more likely to happen over time as improvements are made, increasing property values, Alley said, adding TIF income data will become clearer around this time next year as property taxes are paid. Sometimes it takes two or three years to see a difference, he said.
Recent and Planned Developments
Even before the new TIF was established, the area saw improvements with new businesses, renovations, and new construction. “When one business closes, there’s always one in line waiting to take its place,” Peck said.
Recent additions include Elite Furniture & Home Décor at Midway Plaza (10900 Lincoln Trail) and TQ International Grocery (712 Lincoln Highway). Ongoing renovations include converting Smoothie King to Dutch Bros Coffee at 6208 N. Illinois St.
New construction projects include the Club Car Wash at 6118 N. Illinois St. and a nearly completed Plaza Tire Service at 218 Lincoln Highway. Development is also planned at 6308 N. Illinois St., where the existing building will be demolished to make way for a 7 Brew Coffee location.
TIF Districts Across the City
The Lincoln Highway and 159 TIF is Fairview Heights’ seventh active TIF district. The city’s oldest, the Bunkum Road District (TIF #1), was established in 2003 to support residential development in the Fairview Hills subdivision. Near the end of its 23-year term, TIF #1 has accomplished its goals and will not be extended, Alley said.
The most active TIF districts are The Shoppes at St. Clair Square TIF and the Lincoln Trail TIF, both of which were previously extended and have about 14 years remaining. Other TIF districts are West Fairview Heights, Ludwig Drive, and State Route 159 North.
Alley said the all the city’s taxing bodies were “great partners” in the creation of the new district.
