Illinois Business District Law

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Illinois Business District Law (BD) Amended:
New Sales and Hotel/ Motel $$’s are available for Redevelopment
By
Beth Ruyle, Executive Vice President & Director
Ehlers & Associates, Inc.

The Business District is not a new economic development tool in Illinois, but with legislative amendment in 2004, it is a tool worth exploring. Like Tax Increment Financing (TIF), the BD allows communities to pledge tax revenues toward redevelopment in a blighted area. However, unlike TIF, this tool allows communities to increase sales and/or hotel motel tax within the boundaries of the Business District as that revenue. Previously the Business District was used for the powers it provided a community as opposed to a real revenue source to help with development or redevelopment. Now, the BD can generate its own revenues or be used in conjunction with TIF to generate additional revenues for projects.

The Business District also deals only with municipal revenues so there is no concern on the part of the other taxing bodies. If additional property tax dollars are generated, all districts receive the new share of those property taxes.

The Illinois Business District law now authorizes municipalities to levy an additional sales tax of up to 1.00% in .25 increments on retail goods and hotels in a designated commercial area. (Certain sales are exempt as drugs, medicines, handicap/disability equipment, etc.) If you are an Illinois community of any size or population, and you are seeking additional revenue to help finance economic development and redevelopment in your community, you should consider implementing the Illinois Business District law (P.A. 093-1053)

The law requires that a municipality make a formal finding that the area is blighted. The “blight” definition is similar to that of TIF, but not exact. In cases of a BD that overlays a TIF, eligibility of both could be concurrently established.

Other requirements similar to TIF are the “but for” provisions, the requirement of a Redevelopment Plan, a required budget, required contiguity of parcels in the District, and required agreement between the BD plan and the comprehensive plan. The time period of 23 years is also the same as TIF.

The Illinois Department of Revenue (IDOR) collects the retail tax. The State Treasurer disburses checks for sales taxes to municipalities on or before the 25th day of each calendar month. IDOR retains 2% of the amount for their administrative costs associated with the collection and disbursement of the business district sales tax revenues. You must file your ordinances with IDOR by April and October 1st for July and January 1 collection startups.

The municipality must collect the hotel portion of the tax.

Adoption of the BD is much easier than that of a TIF. The law only requires that the municipality hold a minimum of two public hearings at least one week before designation. However, communities should undertake an information plan for its residents and businesses and seek support of the affected business community prior to the designation of the BD.


Some questions to consider before using this financing tool:

Question 1.

When would a community consider using a Business District?

Answer.
Two possibilities have already been mentioned—when there is opposition by the taxing districts to a TIF that cannot be surmounted or when additional revenues beyond TIF are needed to make the project work. Other times when a BD might apply are when property tax revenues are already committed and cannot be used, when there is agreement from the retail community that they are willing to participate in the renovations of the area or when a hotel project may be the center piece to the development. These and other reasons are rationale to look at this tool.

Question 2.
Will the imposition of an added sales tax for a retail development located in one part of your community and impact existing retail in other parts of the community? Will this tax drive customers away?

Answer:
In other states that use this financing tool, like Missouri, the experience shows that the payment of the added sales tax is not an issue with consumers, particularly if the retailers in the Business District are new to the community, and provide a greater variety of goods and services to customers that they cannot get elsewhere.

Question 3.
Should we create the district so that we include retailers of high cost items?

Answer:
We would advise that you carefully analyze the impacts of imposing the tax on retailers of expensive items and major retail purchases. You may want to begin with a smaller increment of additional sales tax on those types of high- end retail purchases in order to gauge consumer response to the additional tax.

Question 4.
Is there opposition or resistance to these added taxes by existing retailers?

Answer:
Some retailers (most notably Wal-Mart) have opposed the business district taxes. There is no evidence though to prove that these retailers have lost sales revenue as a result of the additional tax.

Question 5.
If we have an existing TIF, can we still get the Business District and will it require any additional documentation?

Answer:
You can set up a Business District with an existing TIF. At this point, you must complete additional documentation because the qualifying criteria for blight differ in the separate Acts. However, this documentation will be much less extensive than the TIF and can use portions of TIF documents as part of the designation. Such items as the plan and the “but for” evidence will be there from the TIF. Documentation of the criteria will be different or modified.

Question 6.
If we have a Business District can we just impose this tax?

Answer:
Only if you have made a formal finding that the area is a blighted area based on the criteria in the Act. You should also assure your plan conforms to the specifications in the Act. Then, you can pass the ordinances imposing the tax (es).

Question 7.
How complicated is it to create a Business District Redevelopment Plan.?

Answer:

Establishing eligibility still carries with it the need to justify the basis for blight in the BD. Likewise, you must establish that “but for” the Business District development or redevelopment will not occur. The plan must document these items and also provide goals and objectives for the BD, a review of the existing Comprehensive Plan to assure conformity, a budget for the project, and a set of powers and, most importantly, the rate of sales tax or hotel/motel tax that will be imposed.

Beth Ruyle is a Financial Advisor in the Ehlers’ Illinois Office. She is the former director of the South Suburban Mayors and Managers Association. She has extensive economic development and municipal finance experience. She specializes in development of TIF, BD and Special Assessment/Special Service Area Bonds. She is joined in the Ehlers Illinois office by Financial Advisor Brad Townsend another former municipal manager.

Key Financial Strategies

Key Financial Strategies
By
Beth Ruyle
Financial Advisor, Ehlers & Associates

Recognizing that change is inevitable, most communities have undertaken a planning process to view where they are and where they want to be. As a result, most communities in Illinois have comprehensive plans to guide their physical development. However, do these communities have a similar plan to direct their fiscal development? The answer is no. Officials recognize that communities grow and age. They may need new facilities or to replace aging infrastructure. Unfortunately, analyzing only the physical side of the equation does not make a complete and doable vision.

Just as a community needs a comprehensive plan to guide change in the community, it needs a financial plan that provides a framework for good fiscal decision-making. This is not just a budget or a capital improvements program. A financial strategy looks at setting financial goals for the community and the methods to achieve those goals. Both revenues and proposed capital items are parts of a framework that guides the financial decisions of the community. Tying this financial strategic plan to existing financial components and comprehensive planning creates a plan for the community that works.

When a community desires to pursue an action, it will know in advance whether that action is a financial reality. The financial strategy also provides a context in which elected officials understand their options and the implication of their decisions. The impact of competing needs can be fully understood and priorities are realistically set without putting taxpayers at risk. Can you afford to undertake that economic development project? Or, perhaps more importantly, can you not afford to undertake that project?

Communities in other states in the Midwest have embraced this new financial planning tool. For example, The Fitchburg Star, Fitchburg, Wisconsin noted that the process included a well-organized outline of borrowing options and an equally well-organized list of ramifications. The paper then praised the community’s decision to undertake the strategy.

Illinois communities should, likewise, consider this key strategic financial component that includes the following:

Confirm and prioritize community goals;
Review the community’s current financial position;
Develop an inventory of capital needs and program request beyond the traditional Capital Improvement Program;
Develop an inventory of financial resources;
Present options;
Analyze the financial impact of each option;
Prepare an affordable, comprehensive financial plan;
Develop a framework to review future capital projects.

Even the rating agencies have noted that this long-range view of the community’s finances is beneficial. According to both Moodys and Standards and Poor the process assists in the rating process.

Undertaking a “Key Financial Strategies” process is now timely given the positive nature of the economy. Waiting may mean that the community may sacrifice some of its options and, in general, will face less flexibility as it attempts to prepare for the future. Developing a financial strategy will become a necessary tool as communities face the future. Illinois communities should consider this new program quickly to assure that their financial future is sound.


As Printed in the Illinois Municipal League Review, March, 2000

Fiscal Impact Review of New Development

Important Questions for a Fiscal Impact Review of New Development

Many communities are facing new development and redevelopment. A common question is what financial impact the development will have on budgets of cities and school districts. Cities and school districts are especially interested in assessing whether a proposed development will provide sufficient revenue to cover its future operating and capital cost both in the short and long-term.


Many municipal officials assume that most new development will pay for itself, Unfortunately, that is not always the case. For a variety of reasons, it is not always easy to predict which developments will cover their cost and which will not. Tax rate limitations and conservative assessing practices have combined to limit the financial upside of new development and re-development.


It is a recommended financial practice for communities to review financial impact of new developments. Many communities are asking developers to provide this information as they submit their plans. However, these analyses may not explore the full costs of development. Having full information can provide important insight and even leverage when negotiating development and annexation agreements.

Cities and School Districts should consider the following questions and responses when evaluating new development and re-development.

1. Why is it important to review the fiscal impacts for a proposed development? Fiscal impact reviews are an essential component to financial planning for communities. Knowing, and preparing for, the capital and operating needs of new developments are keys to successfully managing growth. Without such information and financial plans, communities experiencing growth may find themselves supporting budgets from building permit and impact fees. When the growth subsides, these communities are likely to face financial stress.

2. Who should prepare a fiscal impact review? It is best that local government staff or a financial advisory firm working for the local government should perform the review. Many communities rely on information provided by the developer's consultant. This may present problems for the community if those interested in the impacts of the development question that information. It is hard for the community to verify that conclusions are correct if they have not been involved in the development of the fiscal impact data. In many cases, the client requesting the fiscal impact review is the developer and not the local government. It is sometimes difficult to assure objectivity of the fiscal impact review when it is in the best interest of the developer to show a positive fiscal impact for their project.


3. Who pays for the study if the local government staff or financial advisor performs the work? The study will need to be paid for by the local government. Local governments can treat this like any other internal review, such as engineering, where the local government assumes the costs or contracts for the review and becomes the client, yet requires the developer to assume the costs.


4. Don't new developments pay for themselves? No, not always. Tax rates and fees vary greatly because various types of development generate widely different local revenue. As a result, it is difficult to generalize about their financial viability. Typically, specific analysis is needed.


5. If new development pays for new streets and utilities is there any need for additional impact fees? Yes, new development will typically add to the need to eventually expand or build and equip new city halls, police stations, public works facilities, fire stations, parks, libraries and schools. New equipment for police, fire, and public works will need to be financed. Finally, because of the lag between new development and receipt of property taxes and state revenues based on population census data, transition financing is also needed.


6. Is budget or audit information the best source to develop projections for future operating costs? Yes, that is the best place to start. But most local governments have been faced with cutbacks to the point that budgets do not always reflect the true cost of operations. It is critical to identify the real cost to maintain existing services and facilities and adjust projected costs accordingly.


7. What options are available if the development will not support itself financially? There are quite a few options, depending on circumstances. Some options include changing phasing, development type, revising the base plan, conducting special census, and increasing up-front impact fees.


8. When is the best time to prepare a fiscal impact study? The best time is once an initial concept has been presented, but prior to initiating the formal approval process. This allows for adjustments to the plan based on the results of the study. It is much more difficult to make changes once a development concept has been submitted for formal review and approval.


9. Is there really any difference between studies performed by the developer’s consultant and one prepared by a city or their consultant? Yes, some development consultants do not have the municipal background needed to properly evaluate impacts and cost of services. Rarely, does a developer or their consultant have actual municipal operating knowledge. In addition, it is important to recognize that service levels vary from community to community.


10. What type of organization provides Fiscal Impact Review services? These studies are prepared by a variety of sources including cities themselves, planning firms, financial advisory firms and even some universities. Some communities require disclosure of current and recent clients to avoid the appearance of conflict of interest. It is always a good idea to check references as part of the selection process.


James Prosser is a financial advisor and leads Ehlers’ Illinois Office. He has city management experience in f Richfield, MN and in Hazel Crest, Glen Ellyn, IL. Jim has also managed numerous redevelopment and fiscal impact project s for communities.

Beth Ruyle is a financial advisor and is the municipal group leader for the Ehlers’ Illinois Office. She is the former director of the South Suburban Mayors and Managers Association. She has extensive economic development and municipal finance experience.

THE ATTORNEY - PLANNER RELATIONSHIP 'KEY' TO GOOD LOCAL ZONING

THE ATTORNEY - PLANNER RELATIONSHIP 'KEY' TO GOOD LOCAL ZONING by Craig Hullinger AICP and Chuck Eckenstahler AICP

INTRODUCTION Planners carry-out day-to-day zoning administration. The municipal attorney normally is involved in the zoning process through review of proposed ordinance language and with enforcement proceeding. A positive working relationship between the planner and attorney is vital to successful zoning administration. This article examines the role of the planner and the municipal attorney in day-to-day administration of the planning and zoning process. YOUR LAWYER - DON'T LEAVE HOME WITHOUT HIM
Municipal planning and zoning have become more complex and legalistic. Gone are the days when the planning commission, zoning board of appeals and elected officials could "kick back" and informally decide what to do about a zoning request. Today the process of making the zoning decision requires strict adherence to procedures. Public notification and decision making is based on compliance with predetermined standards (typically contained in the local zoning ordinance). In almost all cases the planner must be concerned with future litigation. The planner, planning commission, and Board must make decisions that will be upheld in court. Your lawyer is your expert, and an individual that you should rely on to ensure that your decisions will be fair, and will be viewed as fair by the courts.

AND ORDINANCE Decision making by a planning commission and board should be fair and unbiased. If a project is turned down, the reasons for the denial should be clear. The decision should be documented. The public debate should be clearly summarized in the minutes of the Board meeting. The motion to approve or deny should include the reasons for denial. In practice this seldom happens. After an acrimonious debate a board member will often move to deny without summarizing the reasons for denial. This enables the attorney for the developer to speculate as to why the development was denied in a subsequent legal challenge. The public will often vent against a project and offer testimony that is untrue or derogatory at the meeting. The local government must make it clear that they are not making their judgement on unfair or inaccurate testimony. It is important that the municipality explain clearly and factually in writing why the request was denied. Some planners actually write out both motions to recommend approval or denial, with the reasons clearly stated. The reasons for denial or approval are taken directly from the ordinance, or State enabling legislation, or from the Comprehensive Plan.

FINDINGS OF FACT

A formal findings of fact prepared by the planner and attorney and adopted by the Plan Commission and referred to the legislative Board is the best protection against a law suit. The planner and attorney have time to prepare a logical summary of the legitimate reasons for approval or denial of the applicants request. The legislative Board typically adopts the findings a month or two after the denial, with emotion out of the decision making. In practice most towns do not write and adopt a formal findings of fact. Alternately, they develop such a finding for major projects where litigation seems likely.

BE FAIR, OPEN AND HONEST

The developer before the Plan Commission is usually a successful businessman who is often betting his life savings on his project. You must treat him fairly. If the developer is proposing an unpopular project, citizens will speak out strongly against the proposal. At the public hearing the Chairman should keep order, and rule out of order testimony that is not pertinent to the case. The planner has the most contact with the developer. The planner is often advising the developer, but must make sure that the developer understands that the planner is only an advisor to the Plan Commission. The Commission and Board can and will take action that is not consistent with the planners recommendation. The Plan Commission and legislative Board makes decisions. The planner owes both the developer and the Plan Commission his honest and open assessment of the project. When it becomes clear that a Plan Commission will recommend denial of a project the planner should work closely with the attorney to ensure that no procedural errors are made. The attorney and planner must work to ensure that there is no case against the community.

THE COURTS AS A SUPER ZONING BOARD

Most judges do not wish to become a super zoning board. They do not typically overturn a local denial that is based on law and sound judgement. The Courts and the local government should ensure that they have a logical and current Comprehensive Plan and Zoning Ordinance. The plan and code should be consistent. The goals and objectives of the plan and the purposes and intent of the zoning ordinance should be consistent. A simple restatement of purposes and intent in the zoning code that is taken directly from the State enabling legislation ensures that at least the purposes of the code are consistent with State enabling legislation.

MAKING SURE THAT YOUR DECISION MATCHES CASE LAW

In Illinois standards were established in the courts in two major cases. These standards will be considered by the courts in evaluating challenges to municipal zoning decisions. The planner and attorney should obviously consider these standards when making zoning decisions, and preferably state so in writing in the findings of fact.

LASALLE NATIONAL BANK v. COUNTY OF COOK (1957) SINCLAIR PIPE LINE COMPANY v. RICHTON PARK (1960)

1. The existing uses and zoning of nearby property.

2. The extent to which property values are diminished by the particular zoning restrictions.

3. The extent to which the destruction of plaintiff's property values promote the health, safety, morals, or general welfare of the public.

4. Relative gain to the public compared to hardship imposed upon the individual property owner.

5. The suitability of the subject property for the zoned purposes.

6. The length of time the property has been vacant as zoned, considered in the context of land development in the vicinity.

7. Community need for the proposed land use.

8. The care with which the community had undertaken to plan its land use development.

A simple written statement with a paragraph explaining how your decision is consistent with these 8 standards is valuable. They form a good framework for your report to the board and your findings of fact. THE TRACK RECORD OF YOUR COMMUNITY Does your community make logical decisions on land use, or are your decisions unreasonable, arbitrary, and capricious? Have your zoning decisions often been overturned by the courts, or are you usually upheld? You must try to make sure that the decisions of your Plan Commission and legislative Board is consistent. Communities often have developers who cause no problems, and other developers that cause major problems. You still must make sure that you treat both developers fairly. YOUR LAWYER IS YOUR PARTNER It is important that your lawyer is your partner in working with your community. His training is different than yours, and he sees things in a different way. You need to work closely with him or her to ensure that you and your community make consistent, logical, and fair decisions based on law.

About the Authors

Chuck Eckenstahler, AICP, is the owner of Public Consulting Team, a Benton Harbor, Michigan planning consulting firm which has consulted with the Villages of Beecher, Sauk Village Glenwood and Homewood as their consulting planner. He holds two Masters' Degrees, one from Governors State University and the other from the University of Notre Dame. He is an active writer, having more than 150 articles published on various economic development, land use planning and real estate development topics. He can be contacted at 219-879-1012, or E-mail at pctecken@netnitco.net.

Craig Harlan Hullinger, AICP, is the President of Planning Development Services. He has served as the Will County Director of Land Use and Planning where he supervised planning, zoning, engineering, and building functions. He is currently working with the Villages of Minooka, Tinley Park, Mokena, Munster, IN, the Eastern Will County Regional Council, and as an expert witness. Craig has a BA Degree in Public Administration and a Master's Degree in Environmental Planning. He can be contacted at 309 966 1616 or E-mail chullinger@gmail.com.

For more information on Chuck or Craig visit our web page at http://www.ruhu12/blogspot.com

PREPARING AN ECONOMIC DEVELOPMENT STRATEGY

PREPARING AN ECONOMIC DEVELOPMENT STRATEGY

IN

TEN EASY STEPS

By

Chuck Eckenstahler and Craig Hullinger

3/6/2009

Introduction

Every local governmental official is now challenged with the need to promote jobs and new investment in their community. The question asked is “How does our community accomplish this task?”

This question is often answered by chamber of commerce members, government employed professional economic developers, and/or an assembled group of academics. These individuals usually work with a large group of interested individuals offering their opinions of what programs and activities should be undertaken by businesses and government to stimulate the local economy.

The recommendations might include an improved effort to retain existing businesses or an effort to attract new businesses. Tasks could also include developing a business park or improving education to provide more skilled employees. It may also include efforts to improve our neighborhoods and downtown business districts to attract young well-educated adults who wish to live and work in an attractive and exciting community.

The responses differ, typically having as many variations as there are people discussing what should be done. To the lay person preparing the community economic development strategy can be an overwhelming and complex task; being something “best left to the professionals.”

The truth is that strategic economic development planning is rather simple. It is not rocket science. This article seeks to demystify preparation of an economic development strategy, simplifying the process into ten easy tasks. By answering simple, easily understood questions, a group of people can prepare a strategic plan organizing an economic development program for their community.

Question 1 - Who are we?

A simple question! Yes, we know we are a community of, for example, 5,000 people. That’s correct, but what do we know about ourselves? How many people do we have in the workforce and what are their ages? What jobs do they do and how much and what type of education do they have? How many are unemployed or underemployed? How many kids are in school, when will they graduate, how many will go on to college and how many will obtain other advanced technical training?

Many of these questions can be answered by data obtained primarily from the US Census. This information can provide a narrative and quantified description of who we are and who makes up the workforce. It can also identity their education and job skills. According to business site locators, available workforce is one of the top criteria of any firm seeking to expand or locate a new business operation.

Question 2 - What is our economy?

It is usually simple to identify the major employers. This typically includes school district and hospital. The city or county government and a few major businesses are also major employers. They account for a substantial number of jobs located in the community. However, there is a large segment (some estimate 80%) of jobs that are provided by smaller business that often times are overlooked in this simple tabulation and small businesses are the primary generator of new jobs.

Data from the US Census, US Department of Commerce and state employment agency can be useful in providing a narrative and quantified description of the number and type of jobs in the community. This data allows examination of the number of jobs and wage scale of the current jobs in the community. It can also help identify the growth (or decline) of these jobs over time, which is important to know to determine what specific jobs the community currently has and what types of jobs that the community would like to attract.

Question 3 - What are our problems and opportunities?

This is a more difficult question answered by a detached unemotional critical evaluation of “community competitiveness”.

One way to answer this question is to complete what researchers call a “SWOT” analysis. To complete a SWOT analysis, the community lists its economic Strengths, Weaknesses, Opportunities and Threats.

The completed list provides information identifying unique opportunities for existing business expansion and opportunities for recruiting new businesses. It also identifies weaknesses and future threats which may discourage business expansion and new business location, which may be remedied by specific community action.

For example, the SWOT analysis might disclose that the workforce has a concentration of skilled computer operated machine tool makers. This workforce can be offered to prospective businesses needing such workers. It may also disclose that the farmland designated for industrial development has no water and sewer and is not “shovel ready” for a business to immediately begin construction.

Question 4 - What are our strengths?

Like a well trained prize fighter, who patiently waits to use his “best punch” to win the fight, an economic development strategy must identify the community’s economic development “best punch”. Completing the SWOT analysis helps identify unique economic strengths that can define the “economic development knock-out punch” for use in the fight to create new employment opportunities in the competitive global environment.

Identifying the “knock out punch” is sometimes easy. It might be a unique geographic location affording superior logistic transportation amenities. Or it might be proximity to a nationally rated university. Or perhaps it might be a young highly educated available workforce. It could be an attractive recreational or small town residential lifestyle that the community offers to new residents. Regardless of the type of strengths identified, analysis of community strengths is necessary to select those specific opportunities that can be used to create new jobs within the community.

Question 5 - What do we want to be - our future vision?

Of the ten questions, this question is the most difficult to answer - what do we want to be?

This question is most often answered by a carefully worded vision statement, prepared by the consensus of interests that places into words a mental image of what the desired future should be. The phrase “Our Future Vision is that our community will be the premier regional location for business investment in 2015” is an example of a vision statement.

This statement tells a big story. It proposes that the community will be the premier location for new business investment when compared surrounding areas. It also provides a means to measure comparative success by measuring economic indicators such as 1) increased jobs, 2) an increase in number of businesses and 3) and an increase in business tax base within the community. It also gives a time period to measure success.

Question 6 - How do we get there?

With an understanding of our strengths, weaknesses and opportunities plus a vision of what the community wants to be in the future, answering this question may become clear. The answers become a list of specific actions that must be completed to either eliminate defined weaknesses, or maximize identified strengths to capitalize on identified opportunities.

For example, the lack of “shovel ready” sites can be remedied by investment in utilities, roads, and governmental approvals necessary to have the site ready for construction immediately upon receipt of a building permit. Another action may be a Tax Increment Financing District or a Business Development District or a Special Service Area to provide incentives for business investment. Other actions may include completion of community appearance projects, securing worker skill training programs for laid-off workers, or conducting a national marketing program to recruit new businesses to locate in the community.

Question 7 - What resources do we have and need?

Every community has resources, typically scattered among a large number of separate organizations. Key to answering this question is identifying these resources and involving them in developing the economic development strategic plan with agreements to “take-on” and fund specific work tasks.

A chart can be prepared listing the specific work task identifying the person or organization that is responsible for the task, when the work is to be completed and how it will be funded. Preparing this chart early in the strategic planning process also identifies work tasks that do not yet have a sponsor or funding.

In our example, a work task to install infrastructure for a “shovel ready site” may be assigned to the city public works department. Obtaining necessary planning and zoning approvals would be a task for the city Planning Department. The City Council could be assigned responsibility to begin city council sponsorship of a TIF district for a future business using tool making machinery equipment. The Community College could be asked to sponsor a workforce retaining effort with the chamber of commerce assigned the task of developing and implementing a marketing program.

The chart may also identify the need to involve other organizations or recommend formation of new entities to carry out specific works tasks. We might need a downtown development organization to sponsor a downtown redevelopment plan or a neighborhood redevelopment organization to sponsor redevelopment programs.

Question 8 - Who is responsible?

The key to successful implementation requires gaining commitments from specific individuals to complete work tasks. This “buy-in” of responsibility is critical to success.

In our model economic development strategy, the Mayor, Public Works Director, City Planner, Economic Development Director, President of the Community College and Chamber of Commerce Director would be named as “responsible parties” and charged with the duty to complete one or more specific work tasks.

Question 9 - How much does it cost?

Undertaking an economic development program costs money, typically more that any single organization has within their budget. Answering this question establishes a budget for each work task and identifies who is to provide the funding for the task.

Question 10 - How do we know when we get there?

In every successful economic development program the progress towards completion of each work task is periodically reported. It gives the opportunity to celebrate success and to modify the tasks if necessary to assure successful accomplishment.

Measurement tools to gage progress are critical. Useful milestones to measure success should be included as part of the Strategic Plan.

Some strategies break the process down into a number of separate categories, such as logistics, health care, energy, agri-business, retail, etc. Other approaches include a much quicker and simpler process, with the development of a on page strategy. This approach can sometimes be used as an interim until a full blown strategy can be developed.

On Line Examples

The following web pages show examples of recent Economic Development Strategies. Each effort is somewhat different, but most of them follow most of the ten items.

One Page http://peoriastrategy.blogspot.com/

Neighborhood http://www.renaissanceparkpeoria.com/

Regional http://www.edc.centralillinois.org/content/about-edc-central-illinois

Conclusion

Preparation of an economic development strategic plan is not an overly complex process and can be accomplished by answering ten questions to define a Vision for an economically improved community. Specific answers lead to identification of weaknesses that need to be remedied. The process also identifies strengths and specific opportunities with can serve as the base for a job expansion and business investment program. It provides a mechanism to identify specific work tasks, determine their cost and assign responsibility for their completion and means to measure incremental progress.

There are numerous resources to help communities prepare economic development strategies, including regional planning organizations and private consultants. While use of outside assistance brings technical skills and greater experience to the process, community representatives are still required to answer all ten questions, develop the vision and work tasks, and accept responsibilities to complete each work task.

About the authors -

Chuck Eckenstahler is 35 year veteran of municipal planning, economic development and real estate consultant serving clients in Illinois, Indiana and Michigan, and a past contributor to the Illinois Municipal Review. He teaches economic development subjects in the Graduate School of Business at Purdue North Central, Westville, Indiana and serves on the faculty of the Lowell Stahl Center for Commercial Real Estate Studies at Lewis University, Oakbrook Illinois. He can be contacted at pctecken@comcast.net or by phone at 219-861-2077.

Craig Hullinger AICP has 35 years of experience in economic development, city planning, and transportation planning. He is the Economic Development Director of the City of Peoria, Illinois, and a member of the American Institute of Certified Planners and Lamda Alpha. He was formerly Planning Director of Will County. He publishes a number of blogs on Peoria economic development which can be found at http://peoriaed.blogspot.com/ . He can be contacted at Hullingerc@gmail.com or by phone at 309-494-8640.

___________________

Economic Development Strategy Questions

1. Who are we?

2. What makes up our economy?

3. What are our problems and opportunities?

4. What are our strengths?

5. What do we want to be - our future vision?

6. How do we get there?

7. What resources do we have and need?

8. Who is responsible?

9. How much does it cost?

10. How do we know when we get there?

EXAMPLE STRATEGIC PLAN WORK TASK CHART

ECONOMIC DEVELOPMENT STRATEGIC PLAN Work Tasks
Work Task	Description	Budget	Funding Source	Responsible Party	Completion Date	Progress Measurement Tool

Easy to Print Link Below:

http://docs.google.com/Doc?id=dgp5tpcd_118pjfvkng6&btr=EmailImport

SMART GROWTH IT'S MORE THAN AG PRESERVATION

SMART GROWTH IT'S MORE THAN AG PRESERVATION AND STOPPING URBAN SPRAWL By CRAIG HULLINGER AICP, CHUCK ECKENSTAHLER AICP and BETH RUYLE


Introduction


Smart Growth is the latest buzz word in the planning media. During 1999, there were over 100 various ballot initiatives concerning urban sprawl, growth management, open space and smart growth placed before the voters across the United States. Even candidates for the presidency of the United States discuss the concept of offering different federal funding strategies to assist states and local governments to reduce sprawl.


In Illinois local officials are reviewing their plans to incorporate smart growth land use goals in response to national and statewide attention toward smarter land use planning. Nevertheless, what is smart growth? How will governments determine if their local plans are smart growth oriented? Do we need to make changes so that our plans are smart growth oriented and ,if, so what changes do we need? The intent of this article is to answer these questions.


Smart growth means different things to different people. Some proponents think that any infrastructure improvements, such as new road, especially interstates, in suburban areas promote sprawl, or in their minds "unsmart growth." They believe that we should target federal and state resources to rebuild older central cities, whether or not these cities lack vitality. Obviously, this approach also has opposition.

Some developers feel that smart growth means higher density development on smaller lots, which may provide for greater profits. Others feel that governments should purchase land to save it from development pressures. It becomes open space or could even continue to be farmed. Not since the environmental movement of the 1970's have we seen such a public emphasis on land use and land regulation.

The $10 billion Clinton Administration "Livability Agenda" which calls for the control of urban sprawl through preservation of open space and protection of water supply is only the beginning. The current attention to the issue of urban sprawl and wise management of our resources could result in new legislation and state policies addressing future new development. The concern for preservation of open space and protection of our resources has resulted in new resources and may initiate new legislation and state policies concerning land use controls. Background and a

Definition Smart growth has grown from the anti sprawl development movement. In part, smart growth seeks to prevent leapfrog developments that are not contiguous to existing communities. A primary goal of smart growth is to save our most valuable natural resources and direct new development to areas where infrastructure is already in place, thus saving the expense of building new infrastructure and converting undeveloped land for urban uses.

The State of Maryland has enacted a "Smart Growth and Neighborhood Conservation" initiative, which they intended "to reverse the inefficient and often costly pattern of development that has been the standard in this country for the past half century."

According to the Maryland model, smart growth has three straightforward goals:

To save our most valuable remaining natural resources before they are forever lost;

To support existing communities and neighborhoods by targeting state resources to support development in areas where the infrastructure is already in place (or is planned) to support it; and

To save taxpayers millions of dollars in the unnecessary cost of building the infrastructure required to support sprawl.

Many supporters of smart growth in Illinois identify with the Maryland goals. These goals support logically planned infrastructure and development. Who's Doing What? In Illinois, the smart growth movement is expanding rapidly. Besides supporters of wise infrastructure development, the movement has grown to encompass many diverse groups including open space preservationists, transportation planners, pro growth advocates, economic developers who seek the location of jobs closer to home and citizens seeking additional and higher levels of government services. Each group brings a specific agenda and view concerning the pattern of future land use. In Northern Illinois, a quick inventory of interested groups would include the Metropolitan Chicago Mayors Caucus, the Northern Illinois Planning Commission, the Metropolitan Planning Council, Openlands Project and the State among others.

County and multi-jurisdictional planning bodies will also become involved with smart growth initiatives as needs to plan for both redevelopment within existing communities and for expansion of the urban areas beyond local governmental jurisdictions become necessary. Various research studies and, more recently, policies and recommendations for better land use management have been published by many of these groups. These studies are designed to provide information and simulate local officials to action, recognizing, in Illinois, land use planning and development regulations are administered by local government.

As the collective mayoral voice of municipalities in the Chicago region, the Metropolitan Chicago Mayors Caucus established the following vision and principles related to smart growth: Vision The Chicago metropolitan region will be a place where all residents enjoy a high quality of life characterized by access to jobs, economic opportunity, quality housing, educational opportunity, an effective transportation system, and a safe environment.

The mayors adopted the following principles to support their vision:

1. Regional growth and development policies, programs, and projects should respect local decision making authority.

2. Policies to guide the region's growth and development should be developed by the region.

3. Regional growth and development initiatives should promote balanced economic development throughout the Region.

4. Initiatives to promote the region's growth and development should employ positive incentives, not mandates or penalties.

5. Regional growth and development initiatives should respect personal and economic choice and the diversity of the Region's communities. The most recent Smart Growth Vision was released by the Metropolitan Planning Council in December. "Building Stronger Communities" represents a year long effort to build consensus concerning smart growth for the greater Chicago region and the whole state.

The study identified five goals which embody smart growth;

1. Protect open space,

2. Coordinate transportation with development,

3. Improve water quality,

4. Expand housing for workers, and

5. Coordinate and expand state support to local communities.

Smart Growth Graduates to Sensible or Sustainable Growth Almost daily the local newspaper contains a report about future land development, whether it be titled smart growth, sustainable growth, sensible development or anti sprawl development. Usually the media summarize a state or local effort to achieve one or more of the goals stated above. In Illinois Governor Ryan and the Illinois General Assembly have established the Illinois Growth Task Force to study smart growth and establish state policy and investment guidelines.

Many local governments are reviewing their plans and testing whether their current plans fulfill smart growth standards and provide for sensible and sustainable future development. One such group is the Eastern Will County Regional Council, an intergovernmental agency created for joint planning by the local governments in that area. According to Ken Kramer, Chair of the Council and a Park Forest Trustee, "Eastern Will County is truly a microcosm of the State. In terms of smart growth, we represent older cities as well as fast growing rural communities. We need to improve existing roads. We need new roads built as well as better public transit to job centers.

In the future we will be one of the fastest growing Illinois county and we must consider our need to house this expanding workforce." "The goal of the Smart Growth Strategy for Eastern Will County will be to draw together our local governments to assure we have a land use plan which conserves resources and supports our ability to grow in the future. We also need to increase the number of jobs in our area, to reduce long commute times for our workers." Kramer believes the Eastern Will County Regional Council is a proper vehicle for the study of smart growth since the council represents a group of communities which, while independent, must base their future planning on several common growth and development issues including transportation improvements and location of new employment opportunities.

"Ultimately, the character of Eastern Will County will be shaped by the individual decisions made by each local government. Collective future planning will provide a chance to address quality of life issues, reduction of traffic congestion, increasing available jobs and reducing impact to our schools rather than reacting to new as it happens." Testing The Local Plan For Smart Growth Consistency Local officials should determine whether their community plan is a Smart Growth Plan.

Below is a series of questions which can be used to test as to whether the plan could be considered a Smart Growth Plan.

1. Does the plan provide for increased land for new development adjoining the current developed area?

2. Does the plan call for developing vacant land within the existing pattern of development?

3. Does the plan promote the building or improving of new roads which will expand the pattern of development to vacant or existing agricultural land areas?

4. Does the plan specify land which should be preserved from development?

5. Does the plan require the installation of additional water and sewer lines, using state grants or loans, while current capacity remains unused?

6. Does the plan seek to decrease the average single family home lot size?

7. Does the plan consider more pedestrian pathways within the community including shopping/entertainment areas, schools, government buildings, etc. and have you considered road width and sidewalk requirements in new subdivisions.

8. Does the plan promote coordination of the pattern of land use with abutting neighbors?

9. Does the plan explore mass transportation for workers to reach their places of employment?

10. Does the plan include housing for families employed in jobs located in the community?

Fortunately, there is no correct answer nor wrong answer to these test questions. These questions form the basis for discussion and determination, by local officials, whether their plan meets their definition of smart growth. What to Do with this Information Citizens and the media will call upon individual communities in the next several years to test whether their community plans fulfill requirements for smart growth.

It is possible that coordination with surrounding comminutes will be necessary. It is also possible that coordination with county, regional and state agencies will be required to assure that investment in roads and other infrastructure correspond with state and local established smart growth policies. The long established land use planning rules are beginning to change with increasing demand on local governments to limit urban sprawl, to provide for more open space, to preserve agricultural land, and to lessen the dependance on the auto as the principal means of transportation. A review of the local plan today may identify changes necessary to reach conformance with forthcoming statewide smart growth policies. Careful attention should be given to Illinois Growth Task Force deliberations as the outcomes of the task force may indicate new statewide goals and possibly legislative initiatives which will shape the role of local government planning in the future.

About the Authors

Chuck Eckenstahler, AICP, is the owner of Public Consulting Team, a Benton Harbor, Michigan planning consulting firm engaged by the Villages of Beecher, Sauk Village and Homewood to serve as their consulting planner. He holds two Masters' Degrees, one from Governors State University and the other form the University of Notre Dame. He is an active writer, having more than 100 articles published on various economic development, land use planning and real estate development topics. He can be contacted at 219-879-1012, or E-mail at pctecken@netnitco.net.

Craig Harlan Hullinger, AICP, is the President of Planning Development Services. He has served as the Will County Director of Land Use and Planning where he supervised planning, zoning, engineering, and building functions. He is currently working with the Villages of Minooka, Tinley Park, Mokena, Munster, IN, the Eastern Will County Regional Council, and as an expert witness. Craig has a BA Degree in Public Administration and a Master's Degree in Environmental Planning. He can be contacted at 309 634 5557 or E-mail Craighullinger@gmail.com

Beth Ruyle is a Financial Advisor with Ehlers and Associates. She recently served as the Director of the South Suburban Mayors and Managers Association. For over twenty years she lead this thirty eight municipalities in this Council of Governments in the development of plans and programs. At Ehlers and Associates she is undertaking a myriad of projects in fiscal strategic planning, economic development, intergovernmental programs and public finance. Ruyle has her Master Degree in Public Administration from the University of Georgia. Contact Ruyle at 309 966 1616 or at E-mail Bethruyle@gmail.com.

For more information visit our web page at http://www.ruhu.blog.com. .May 2000 / Illinois Municipal Review

“Just outside Chicago, there’s a place called Illinois.”

Move your business and home to downstate

“Just outside Chicago, there’s a place called Illinois.” The State of Illinois developed this catchy slogan for it’s tourism marketing program to encourage Chicago-area residents to visit the Illinois south and west of Chicago, instead of visiting Wisconsin and Michigan. The strategy aimed to keep tourism and the dollars it generates in Illinois.

The strategy need not stop at tourism, though. Communities in downstate Illinois should employ a similar strategy when attracting businesses and economic development. Outside of the Chicago metropolitan area, the cost of home ownership and renting is tremendously cheaper. The cost of doing business is also much less. Congestion, often cited as a quality-of-life issue, is virtually non-existent: “rush hour” in smaller communities is often the “rush minute”.

Demographic trends indicate that the problem is only going to get worse in Northeast Illinois. Of Illinois’ population of 12 million people, 8 million citizens live in or around Chicago. By 2030, Illinois is projected to grow over 15%, but of the 2 million more people living here, most will be living in or near metro Chicago.

While growth is encouraging, it also comes with associated costs. Both Chicago and Illinois would be better off if some of the projected growth occurred in other Illinois communities. The addition of two million more people to the Chicago area will create more traffic congestion and air pollution. This will require increased capital expenditure at the federal, state and local levels as the transportation, protective and educational infrastructures swell to accommodate this growth. The increase in taxes need to manage this growth is rarely appreciated by citizens.

Illinois communities outside of Chicagoland could accommodate and welcome this growth. Many communities are at best experiencing moderate growth, while many more are losing population. These smaller communities often have housing stock, roads, schools, and other infrastructure that have capacity sufficient to the task.

This potential is illustrated by comparing two large metropolitan areas in Illinois. The moderately-growing Peoria metropolitan area is the second largest metro area in Illinois. However, as the following table demonstrates, there are significant advantages to locating or relocating “downstate”:


Chicago / Peoria


Median Home Price[1]

$ 274,700 / $ 114,900


Average Commute Time (2000)[2]

35 minutes / 20 minutes


“Cost of Doing Business” Rank[3]

90th / 47th

Cost of Living Index Composite[4]

103.9 / 96.9

Student-Teacher Ratio[5]

16.40 / 14.40

Relocating Businesses and Employees Downstate

More and more people are controlling their own job location. The Internet permits more people to work remotely. Telecommuting allows mobile professionals to flee large, congested metro areas and work and live in a pleasant environment. Free lance writers, advertising executives, entrepreneurs, artists, computer experts and even salespeople are typical of employees who often have control of their work location. Jack Manahan is a perfect example. Manahan left the Chicago suburbs for Peoria. As a home-based computer consultant to government, he simply drives 10 minutes to the airport when he needs to visit a client. "I saved half the cost of my auto insurance and got a much nicer home in Peoria when I left Chicago. And the rush hour is much less than in Chicago. Peoria is a pleasant place to live and work, without the hassle of a really big city. "

Long gone is the requirement for manufacturers, agencies, sales forces and consulting companies to be located in a large metropolitan area. In fact, the cost of doing so might well outweigh the benefits. The same connectivity that permits telecommuting allows business leaders the flexibility to move their entire company to smaller, more attractive communities where both the quality of life and the cost of doing business are better. The marketplace is no longer local – it is global and requires little more than a strong technology and transportation infrastructure. This trend is accelerating and will likely continue to be popular, especially as congestion increases.

Attracting a Retiree Migration South

Moving to a downstate community can also be an excellent retirement strategy. Retirees can achieve substantial savings from the sale of their homes. With Chicago’s real estate market rocketing skyward, retirees can often turn the sale of one home into the purchase of two: A home in a moderately-sized downstate community that offers proximity to family and friends and offers all the amenities of city life, and possibly a second home for the winter months in the Sun Belt. This move is especially appealing to those individuals who grew up downstate but moved to larger metropolitan areas for work reasons.

One budding strategy in attracting retirees is to build housing communities in conjunction with universities and colleges. The housing can be privately developed, with alumni and faculty targeted as purchasers. The partnership is a win-win situation: Alumni bring a love of the institution and serve as natural source of volunteers, donors, event boosters and even students in continuing education. The city gets more homeowners and consumers in the local economy, but does not need to concern itself with these new citizens taking high-paying jobs or additionally taxing the local public school system.


Craig Harlan Hullinger AICP is the Economic Development Director for the City of Peoria. Craig has a BA Degree in Public Administration, a Master s Degree in Environmental Planning. Contact him at (309) 494-8639 or chullinger@ci.peoria.il.us.

Christopher Setti is an Economic Development Specialist with the Economic Development Department of the City of Peoria. Chris has a BA in Political Science and a Master’s Degree in Public Administration. Contact him at (309) 494-8618 or csetti@ci.peoria.il.us.

[1] National Association of Realtors: http://money.cnn.com/pf/features/lists/nar_3q05/price.html#table
[2] Arbitron “Average Travel Time to Work Comparison.” www.arbitron.com/outdoor_companies/travel_result.asp
[3] Forbes Magazine, “Best Places for Business and Careers.” May 5, 2005.
[4] ACCRA Cost of Living Index, 2nd Quarter 2005
[5] www.money.cnn.com. “Best Places to Live 2005.”