Economic Development - FAQs
How did the Village attract Oberweis Dairy to open in Skokie? Oberweis Dairy was attracted to Skokie for many reasons. The available site that the Village had acquired sits at a very attractive location off the Eden’s Expressway at the corner of two mayor corridors, Dempster Street and Skokie Boulevard. Additionally, an innovative financing technique allowed the agreement to come together. The agreement allows the Village to recoup all land acquisition, demolition and environmental cleanup costs for the site, but did not require a large upfront financial burden for Oberweis. In total, the Village spent $1.665 million to acquire the two parcels of land. While Oberweis only paid $400,000 upfront they will make annual “royalty” payments to the Village over the next ten years based on a percentage of sales generated by the new development which is estimated at close to $500,000. These payments combined with the increased property and sales taxes anticipated from the new use are expected to make up the shortfall in the purchase price over the next ten years. The total investment by Oberweis in this new development is about $2 million. Oberweis officially opened in late October 2012. This new development brings major tangible and intangible benefits to West Dempster Street corridor and is expected to spur additional development in the area.
What is the Village doing to redevelop West Dempster Street? The Village continues to focus on revitalizing West Dempster Street and receives numerous inquiries from developers and retailer/restaurant representatives regarding the corridor. A Tax Increment Financing (TIF) District was established in late 2010 for the area bounded by Gross Point Road on the west and Kilpatrick Avenue on the east, encompassing the majority of commercial properties along West Dempster Street.
In addition to extensive direct mail marketing, the Village sent email contacts to executives at over 200 companies attending the 2012 International Council of Shopping Centers Dealmaking event at which the Village had a booth.
Three primary site acquisitions were completed by the Village at 4811, 4904 and 4945 West Dempster Street, and structures on those parcels were cleared to prepare the area for new development. One of these sites, 4811 West Dempster Street, is now home to a combination Oberweis Ice Cream and Dairy Store and That Burger Joint (also owned by the Oberweis Company) which opened in late October 2012.
A new Red Mango opened in summer 2012 at 5230 Dempster Street and a new 13,125-squarefoot Walgreens opened in late October 2012 at the southeast corner of Dempster Street and Crawford Avenue. Kaufman’s Deli at 4905 Dempster Street is recovering from a fall 2011 fire by substantially upgrading and expanding its delicatessen and bakery. The new facility boasts an expanded deli that includes interior dining, refurbished exterior walls and upgrades to the parking areas, landscaping and signage. The iconic Skokie business re-opened in early November 2012.
The Village also has created a West Dempster commercial rehab and site improvement program through its new West Dempster TIF District. This program enables the Village to offer matching funds for significant exterior building and site improvements to existing commercial properties up to $150,000 for a larger, stand-alone building. Both Kaufman’s and a new Papa John’s Pizza were able to take advantage of this program.
Why do there seem to be so many vacant commercial spaces and what is the Village trying to do to fill them? The downturn in the national economy has affected many businesses. As a result, the number of vacant commercial and industrial properties has increased for several years affecting the appearance and vitality of business and industrial districts. Additionally, Skokie has a lot of older buildings that are no longer as appealing to potential business users. This trend began to reverse itself in 2011 as the industrial real estate market improved dramatically, and retailing and professional services rebounded as well. Although much of the problem was due to national economic problems, the Village has been very active in addressing the vacancies. The Economic Development Division is aggressively marketing vacant retail spaces in Downtown Skokie and the West Dempster Street commercial corridor. The Village has purchased some of the most deteriorated and vacant properties for future sale and redevelopment when the real estate and financial markets improve. The objective is to attract modern commercial and mixed-use developments where feasible. The Village also adopted a vacant building ordinance that requires property owners to maintain vacant properties. The Property Standards Division makes extra inspections of vacant building to assure that they are secure and maintained to Village property standards. In Downtown Skokie, the Village has even instituted an attractive window covering program for vacant stores. Seven new businesses have opened in Downtown Skokie in the past year: Siunik Armenian Grill; Aw Yeah Comics; Libertad; Bughouse Studio, Gorilla Tango Theatre, Beats Provoke Movement and Nirvana Boutique and Spa.
What is the Village doing to redevelop Downtown Skokie? The Village is leading several key efforts to redevelop Downtown Skokie and attract more business activity to the area. Skokie made a major investment in the Illinois Science + Technology Park several years ago to help attract high-paying jobs to the area and revitalize the vacant former Pfizer Pharmaceutical facilities just north of Oakton Street. The park now has 19 tenants generating over 1,300 jobs and substantial local tax revenue. The Village also spearheaded the construction of the new CTA Yellow Line station in Downtown Skokie. The $20 million station, for which the Village received $14 million in federal funds, opened on April 30, 2012 and should help make Downtown even more attractive to potential businesses and residents. Major roadway and streetscape improvements are planned for the area to help it function better, enhance the aesthetics and make Downtown Skokie more pedestrian friendly. A bike path has been built along the former Union & Pacific Railroad land connecting the West Dempster commercial corridor and commuter station to the research park and the rest of Downtown Skokie. Incentives to assist Downtown Skokie property owners to upgrade the facades of their buildings as well as interior spaces are resulting in attracting new restaurants and businesses to the area. Other programs are ongoing that provide attractive window coverings for vacant stores, assistance to retailers to enhance their show windows, new banners and enhanced landscaping, improved signage, and upgraded parking lots. More special events including the Wednesdays on the Green program have been added to the Village’s marketing efforts to attract more shoppers and patrons to Downtown Skokie. The Village initiated the successful DS5 promotion from January to May 2012 and also launched the Shop Local Skokie Facebook page. Direct marketing efforts to attract more retailers and restaurants continue as the Village attempts to revitalize the area and create the lively Downtown that the community desires.
What can the Village do to reduce the business property tax burden? Cook County has a complex method of property taxation. For several decades, the County has used a disparate system of property assessment with significantly higher rates for business concerns than for residents. Additionally, the State of Illinois issues a multiplier to be applied against the assessed valuation to "equalize" it with assessment practices throughout the State relative to its percentage of fair market value. An "equalized assessed valuation", or EAV, is arrived at by the County and the State before local tax rates are applied. The Village of Skokie, elementary school district, high school district, Cook County, Skokie Park District (a separate governmental entity), Oakton Community College, Niles Township, and several other smaller taxing districts apply local tax rates. The Village of Skokie's tax rate only constitutes 7% of an average property tax bill. This percentage has been steadily dropping for many years, as the Village has been able to stabilize operational and service costs while increasingly seeking alternative means of revenue generation. Sales tax revenue is the single largest revenue source for the Village's General Fund. In fact, the Village has maintained or even reduced its property tax levy for every year since 1991 without any reduction in services. While the Village cannot affect most of a property tax bill, it has certainly reduced its own dependence on this source of revenue.
What are the major advantages of a Skokie business location? Skokie is a pro-business community and recent surveys have shown that a very high percentage of businesses are satisfied with their Skokie location. Major advantages include: A suburban location close to Chicago and O'Hare Airport with direct interstate highway access and various modes of public transit; Skokie is conveniently located to and accessed by local labor markets; Skokie is a fully developed, mature community with excellent public utilities and municipals services; Skokie's ISO Class 1 rated Fire Department and nationally accredited Police, Fire and Public Works Departments make it the only municipality in the country to combine such highly rated services; Reasonable taxes, and more importantly, no hidden costs of doing business; All schools, roads, municipal buildings and accompanying services are in place, decreasing the possibility of any major tax hikes; The Village has not increased its property tax levy since 1991, and actually decreased the levy in most years; "One stop shopping" with respect to approval of development plans, permits, technical assistance and licenses; The Village's Community Development Department stands ready to assist business, not impede it.
What is a TIF district and why are they so popular for redevelopment purposes? Tax increment financing (TIF) is a State legislated development tool exclusively for municipalities. Under TIF, an eligible "blighted" district is formed and an initial base EAV of the area is determined. All of the affected taxing districts continue to receive tax revenue based on the initial EAV throughout the life of the TIF. As redevelopment occurs and the area's EAV increases, taxes on the increased portion are diverted to a special fund to pay for public costs associated with the redevelopment effort. This is the "tax increment".
The establishment of a TIF district does not affect an individual property owner's tax bill and does not constitute an automatic tax increase or decrease. Tax revenue is merely distributed differently with the incremental portion being deposited to the special fund. The municipality is able to borrow against the incremental revenue flow by issuing bonds or paying for redevelopment costs from other sources of funds.
TIFs are popular for redevelopment purposes because they operate under the premise that redevelopment should pay for itself. There are very few tools available to municipalities to facilitate redevelopment. TIF allows a community to take on some of the extraordinary costs associated with redevelopment and have an equitable source of revenue to pay for those costs. In essence, all of the taxing districts invest in a TIF district, and all benefit from the redevelopment at a future date.