La Salle is pursuing a state River Edge Redevelopment Zone designation that could offer tax incentives and economic benefits to developers and businesses, after the City Council passed an ordinance Monday.

The designation would allow La Salle to offer state and local tax incentives to attract investment to the city’s riverfront and commercial areas. The Illinois Department of Commerce and Economic Opportunity has 90 days from submission to approve or deny the application.

The RERZ encompasses 9.8 square miles of city property, primarily commercial and industrial areas. If approved, developers and businesses in the zone could receive sales tax exemptions on construction materials, state income tax incentives and other redevelopment tools.

“The designation as a RERZ city allows the city to access and offer a variety of incentives, including but not limited to state and local income tax incentives, state tax exemptions on building materials and other redevelopment tools aimed at tracking investments and supporting local businesses,” said Calvin Croy, Community Planner for the North Central Illinois Council of Governments.

Economic Development Director Curt Bedei said the application process revealed the scope of what La Salle could include.

“Originally, we thought that we could only focus on 1,500 feet from the Illinois River’s edge, which basically encompasses up to Third Street in our case, but what we found out was that area has to be the environmentally-challenged area,” Bedei said. “But actually, you can encompass up to 12 square miles of your community.”

La Salle will not offer real estate tax abatement as part of the RERZ, City Attorney James McPhedran said, because the city already uses tax increment financing for that type of relief. The door remains open to add that incentive in the future if TIF programs change.

The RERZ is similar to the Upper Illinois River Valley Development Authority Enterprise Zone, which offers tax incentives and regulatory relief in economically depressed areas. However, businesses cannot use both programs simultaneously — they must choose one.

“There are other incentives out there that we do also offer as well, that can be stackable with the RERZ,” Bedei said.

Bedei thanked the City Council, elected officials, staff and the North Central Illinois Council of Governments for their work on the application.

“It’s been a long process, but I’m glad we’ve reached this point,” he said.