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HomeMy WebLinkAboutRESOLUTIONS-1986-009-R-86• • 0 1/22/86 9-R-86 A RESOLUTION I' Adopting the Evanston Economic Development Strategic Plan ii WHEREAS, Evanston, Illinois, is primarily a residential City with '+ stable population and virtually no vacant land available for new commercial ;j or industrial development; and 1! (! WHEREAS, the number of manufacturing establishments have declined !� over the past ten (10) years; and l WHEREAS, there has been a shift of heavy manufacturing operations !1 such as processing, hardening and grinding, to more light manufacturing I operations, such as assembling, packaging and shipping; and l WHEREAS, the relative smallness of Evanston's industrial base ' restricts the -amount of manufacturing, and the attraction of revenues from outside the community; and i� WHEREAS, the development of major retail shopping centers in jj nearby suburbs has reduced Evanston's strencth as a retail center for the north shore; and ! WHEREAS, the number of specialty retail stores in Evanston have j� increased as has the number of eating and drinking establishments; and i WHEREAS, Evanston is a strong base for service industries; and i I! WHEREAS, an overall strategic plan based upon retaining existing !i ij businesses, coupled with the selective attraction program and new business ! development seems to offer the best response to Evanston's economic condition; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF EVANSTON, COOK COUNTY, ILLINOIS: �j SECTION 1: That the Evanston Economic Development Strategic Plan 1 as outlined in a draft document dated March 31, 1985, and attached hereto as Exhibit 1, is hereby approved I and endorsed subject to the following modifications:- • • 0 9-R-86 1/22/86 ii SECTION 2: That the City of Evanston in the implementation of said 1� Economic Development Strategic Plan shall place a greater F emphasis upon the desire to retain certain retail uses it and other businesses that serve as a magnet for trade and commerce in addition to manufacturing. SECTION 3: That the growth of the arts and entertainment in Evanston II and its significant contribution to the local economy !i is important and shall be encouraged. I` SECTION 4: That said Economic Development Strategic Plan shall be Ij I, revised and updated periodically to reflect current I j` trends its the local economy. I SECTION 5: That the City Manager is hereby authorized to direct City staff to implement said Economic Development i Strategic Plan by bringing forth to the City Council recommendations regarding projects and/or programs in order to implement said plan. i� � r ' Adopted and approved this day of ��'r��u� 1986 Mayor ATTEST: City Clerk �. I � Approved:_ `'L�`� , 1986 \ /:-- x & A, /:. /f EVANSTON ECONOMIC DEVELOPMENT STRATEGIC PLAN May 31, 1985 Developed by EVANSTON INVENTURE EVANSTON ECONOMIC DEVELOPMENT STRATEGIC PLAN EVANSTON INVENTURE'S GOALS AND OBJECTIVES The purpose in forming Evanston Inventure was to coordinate the economic development age.ndas of the City, the University and the private sector. One of the first actions of the Inventure board was to direct its executive director to develop a mission statement which would clearly set out Inventure's goals and objectives. The mission statement and its supporting goals and objectives follows: MISSION: To promote the economic development of Evanston by generating a broader tax base and creating new employment opportunities. GOALS: 1. Prepare and implement a long term economic development program and an overall marketing strategy in concert with the City of Evanston, the Chamber of Commerce and Northwestern University. 2. Spearhead the development of the Evanston/University Research Park. • 3. Focus support and assist in the development of city- wide projects and programs which would have a major impact on the economic stability and quality of life in Evanston. 4. Assi.st the City in creating an overall business retention and attraction strategy. 5. Develop and implement a small business formation and support program to include financing, site assembly and technical assistance. 6. Work to strengthen the public -private partnership by broadening support for Evanston Inventure throughout the business community and among Evanston -based organiza- tions and residents. The following Strategic.Plan is structured to implement that mission statement and its supportive goals. • i.-�r:i�.'a %�.w �„_ •_ ...,.. � ��r. �r � J .Y', _ _ .•%''. d"`s' w,.L;• '" n ".i.' }?y."'^i';{�. �'k. .'•, '�'_ .{.: 'r .:r •Y :i' _ .y 1+?4.'7rV�vi -r �i�.tt�<i;��.�+. e�.,. ,�[ :�p;;?'�1�-,.�Vr .r.�Y'.`,' 'i.a':Y'i Si "� 't ..i .. 'TM"•w.� •.V�i� "J�"_ �Pr: .r ... ftr.'Cd•� .. �•.�e..a'�e.. '• rt'. � ,C , .,.if. ... ,... ,. ... .. ._,_ .... b�~ ........ •r._ .:e'• , e_ . __ ... ....a __... .... ._ �S;. cr'�`�"?: �.%,7.eha�.�.�.,.. _•v7�;!:.::? - is •�. _ EVANSTON ECONOMIC DEVELOPMENT STRATEGIC PLAN 2 THE EVANSTON ECONOMY Evanston is primarily a residential city with a stable or declining population and virtually no vacant land available for new commercial or industrial development. Once a major retail center for Chicago's North Shore, Evanston's Central Business District has come to be dominated by a rapidly growing office and business services sector. Evanston's industrial base has declined in importance as the land available for manufacturing has dwindled and heavy manufacturing has moved south or off -shore. Evanston's most remarkable characteristic is the relative size of its non-profit sector. Northwestern Univers.ity and the city's two large hospitals are the city's three largest employers and 'they are all among its largest property owners.• Institutional property accounts for 18 percent of Evanston's total land area (excluding city streets and alleys).1 The relative smallness of Evanston's industrial and commercial base has shifted an increasing share of the city's property tax to owners of residential property. Commercial and industrial property account for 27.6 percent of the city's total assessed value, although these two uses take up only 15 percent of . Evanston's taxable land area. Expansion of the city's commercial and indus- trial base by only a few percent could provide a more than proportional measure of relief to Evanston property owners. Employment.of Evanston Residents Evanston residents comprise a largely white-collar workforce. Professionals, managers and administrators, skilled workers, and sales workers account for over 80% of the jobs held by Evanston residents. According to Chicago metro- politan area Journey to Work statistics, 41% of all employed Evanston residents commute to places of employment in Chicago. Many others commute to neighboring suburbs. Although Journey to Work statistics do not provide any precise numbers, it is safe to assume that many of the jobs in Evanston are held by workers from Chicago or other nearby municipalities. Employment in Evanston Manufacturing .Due' to their relatively large investments in plant and equipment, large manufacturers are major sources of property tax revenue for most municipal- ities. There .are no large manufacturing employers, however, in Evanston. The city's manufacturing base consists primarily of small to mid -sized companies employing fewer than 100 persons. Census of Manufactures data shows that the number of manufacturing estab- lishments in Evanston declined from 131 in 1967 to 123 in 1977, the last year 1 Evanston Planning Department, 1982. • EVANSTON ECONOMIC DEVELOPMENT STRATEGIC PLAN 3 for which figures are available. In that same period, value added to product in those Evanston companies dropped from $88.8 million to $60.5 million.2 The dramatic decline in value added infers that there has been a functional shift inside the Evanston manufacturing sector. Less value added suggests fewer "heavy" manufacturing operations such as processing, hardening and grinding and more "light" manufacturing operations such as assembly, packaging and shipping. Manufacturing is a major source of export income for most communities, since most of the goods produced by manufacturers are sold to customers from outside the municipality. In this way, products are "exported" from the municipality while money is "imported" from other parts of the country. The money brought in from outside the municipality serves to enhance the local economy. The relative smallness of Evanston's industrial base restricts the amount of manufacturing export income attracted to Evanston. Fully 22%, or 1,300 of the city's 5900 "manufacturing" employees3 work in administrative positions, which create no manufacturing value added locally. Although several large manufacturing companies are headquartered in Evanston, they have generally located their manufacturing operations outside of Evanston. • Retailing The development of major regional shopping centers in nearby suburbs has reduced Evanston's strength as a retail center for the North Shore. Evanston's share of total metropolitan area retail sales declined from 1.5% in 1963 to 1.2% in 1977.4 Especially hard hit have been general merchandise and furniture sales. The general merchandise share dropped from 1.8% to 0.5% and the furniture market share dropped from 2.5% to only 1..0% from 1963 to 1977. According to the Census of Retail Trade, Evanston was home to 23 general merchandise stores in 1967. By 1982, that number had dropped to eight. During the same period, however, the number of specialty retail stores in Evanston increased from 82 to 108 and the number of eating and drinking establishments grew from 68 to 90.5 Total retail employment in Evanston grew from 4,600 in 1967 to 5,400 in 1982. This increase is more than accounted for by the increase in employment in eating and drinking establishments from 660 in 1967 to almost 2,000 in 1982. As Evanston has increasingly become a restaurant town, retail payroll (adjusted for inflation) has fallen, due to .the low -paying, part-time nature of restaurant jobs. 2 Adjusted for inflation, 1967 base. 3 As defined by the US Census of Manufactures. 4 Barton-Aschman Associates, 1982. • 5 A 1985 Chamber of Commerce survey puts the number of eating and drinking establishments at 106. • EVANSTON ECONOMIC, DE.VELOPiDIT STRATEGIC PLAN 4 Retailing is (;enerally not a source of export income for a municipality. Most retail activity is constrained by the size: of the local population. Except for regional malls and other exceptional retailers which draw a large proportion of their customers from outside the municipality, retailers recycle money already in the local economy. In the case of franchise operations, retailers may actually draw money out of the local economy. Service-s As the nation's economy .has made the transition from a manufacturing base to service base, Evanston has experienced that same transition at an accelerated pace. According to the Selected Services Census, the number of service businesses in Lvanston increased nearly twice as fast as in either Cook Cou►ity or the 'Jot.(- of I Il irmis from 1977 to 1982. Of the Selected Service Indur.tries (includ in,, I,u.,,iness, personal, repair and amusement services, among others) business set -vices are the fastest growing source of employment. Efill) loyererit in business services (consultants, computer leasing companies, etc.) nearly doubled from 1,000 .to 1,872 between 1977 and 1982. Evanston's for -profit health care sector, including offices of doctors, dentists and optometrists is also vital to the local economy.. Health services (excluding hospitals) employ nearly 2,000 persons in Evanston. The Census of • Selected Services oily be�,;Gn counting for -profit health services in 1982, so no information on.historic trends in this sector is yet available. Fiany service firms, unlike retailers, can generate a significant amount of "export income." For example, management consultants and computer software developers selling most or all of their products and services to individuals or organizations that are not based in Evanston, bring new dollars into the local economy._ A : those: dollars are spent or invested in Evanston, the local economy is expanded. Piany of Evanston's business service firms have a customer base that is regional or even national and are significant earners of export income. Finance, Insurance and Real Estate This category, not included in the Census of Selected Service Industry Statis- tics, is a Major source of employment and economic activity in Evanston. State National Bank, First Illinois Bank, Washington National Corp., Shand, Morahan & Company, Inc. and dozens of smaller Evanston firms operate in this category. More research is needed to measure the impact.of finance, insurance and real estate firms on the local economy. Many of these firms may be significant export income earners, exporting insurance policies, etc., and importing dollars. Non -Profit Health Care and Educational Services This category, while not a source of tax revenue for the Evanston munici- pal government, includes Evanston's largest employers, Northwestern University and the two hospitals. Detailed information on this sector is not available • EVANSTON ECONOMIC DEVELOPMENT STRATE GIC PLAN from the Census of Selected Service Industries, and local data must be acquired on an individual basis. Northwestern University is Evanston's largest source of export income. Income that Northwestern attracts from outside the local economy, in the form of tuition from students, grants from foundations, corporate and private donations and other sources, is spent on local services and payroll. Economic Development Issues Evanston's economy has shifted from a manufacturing and retailing base to a service base. This is not an uncommon occurrence, given nationwide economic trends, but it is a transformation that will have a significant impact on how and where Evanston residents work, and how they pay for important City services. Potential Problems The decline of Evanston's industrial sector threatens both Evanston's employ- ment and property tax bases. Indirectly, it also threatens the vitality of Evanston's business services sector, since manufacturers comprise the first level of business services customers. •The City of Evanston depends on a healthy retail environment to generate sales tax revenue. The sales tax, next to the Utility tax, is Evanston's largest non -property tax revenue source. Retail expansion seems problematic. at the present time. Both of these trends have forced the City of Evanston to rely more heavily upon the residential property tax. This tax, however,'has a major impact upon development investment decisions and may not be open to additional increases. Opportunities The business services sector, one of Evanston's major new sources of export income, has emerged as the fastest growing segment of Evanston's service economy. Policies which encourage additional growth in this sector, through local expansion or new business development, will help to attract export income to Evanston. The rapid growth in.the number of eating and drinking establishments in Evanston may indicate that Evanston has the potential to become an enter- tainment center for the North Shore. Cultural opportunities provided by Northwestern University may also contribute to this goal. Northwestern University and many of Evanston's technology -supportive businesses could give Evanston a comparative advantage over other Chicago -area municipal- ities in attracting new and existing high-technology businesses. The proposed Evanston/University Research Park represents a major step in this direction by Northwestern, the City and the local business community. 5 • EVANSTON ECONOMIC DEVELOPMENT STRATEGIC PLAN 6 Overall, a strategic plan based upon retaining existing businesses, coupled with a selective attraction program and new business development seems to offer the best response to Evanston's economic condition. EVANSTON ECONOMIC DEVELOPMENT STRATEGIC PLAN The foundation for a successful economic development strategic plan is made up of.three major areas of business development: 1. Retention and Expansion of Existing Businesses 2. Attraction of Outside Businesses 3. New Business Formation The Evanston Economic Development Strategic Plan is based upon the assumption that these goals of retention, attraction and new business formation build upon each other as do the tactical programs which support them. Some programs support one basic area of business.development, others support all three. Strategic Goal #1: It must be the .first priority of any strategic plan to retain t•he City's existing businesses and the jobs which tney provide. . Particular ettorts must be made to retain businesses involved in man.utacturing,' export service and business services because of their potential Tor growth beyond Evanston-s demographic or locational constraints. "Export businesses" are those firms which "export" goods or services beyond the Evanston/Chicago marketplace such as manufacturers or national insurance companies. Attention must also be given to maintaining a healthy retail economy for the suppor- tive environment it provides to export service business and headquarters development as well as its contribution to the overall quality of life in Evanston. Strategic Goal #2: Because of Evanston's need for. a broadened and diversified tax base, an aggressive business attraction program needs to be developed and targeted to business services, corporate headquarters and high-technology industries. lnese businesses nave proven to be ideally suited to Lvanston's worK torce, location and economic climate. Strategic Goal #3: Evanston's economic .future lies in both its ability to bring existing business from the outside and to generate new business growth from within. Evanston should become a center for new business formation, particularly in newly emerging "thoughtware" sectors such as communications, tinancial services, business services, health care and technology. Such an entrepreneurial environment would most likely include business incubators, equity financing, technical assistance and close liaison with the University. GOAL #1: Retention If Evanston is to maintain the quality of its city services it must stabilize and ultimately expand its tax base of commercial and industrial properties. EVANSTON ECONOMIC DEVELOPMENT STRATEGIC PLAN 7 However, understanding the realities of the economic changes which have taken place in Evanston over the past 20 gears, a retention strategy should be specifically aimed at keeping those businesses which have the greatest poten- tial for generating or supporting growth and employment. Manufacturing and i export service industries, such as Washington National Insurance or the hospitals, export goods and services and import money which, in turn, is invested in Evanston in local goods, services and payroll. Business services, such as -computer leasing, microfilming, banking and advertising provide a necessary environment for attracting new businesses into the City, particularly a corporate headquarters. Retailing also contributes to that environment and needs to be supported through an aggressive Chamber of Commerce program. GOAL #2: Attraction A business attraction strategy should center around exploiting those existing advantages Evanston now has or is developing, such as the Research Park. These advantages show up most strikingly through growth patterns of businesses which have expanded in Evanston over time. As discussed earlier certain kinds of businesses, such as business services, national headquarters, health care and, recently, high technology have found Evanston to be a good home. In the case of the first three categories., business services, national headquarters and health care are well established in Evanston and statistically have done well ti here. The fourth category, high technology, is a new economic development potential which needs to be exploited as part of Northwestern University's announced interest in forming research partnerships with the private sector. Our ability to take advantage,of this newly focused institutional resource can generate a major change in Evanston's economy. The nurturing of a high technology economy tied to research and, development partnerships between the University and the private sector is one economic arena within which Evanston has a decided advantage over its suburban and big city counterparts. The high technology/research economy could conceivably create a new economic balance for the City and substantially increase both its employment and tax base over the next 10 to 15 years. GOAL #3: Business Formation One of the United States' greatest economic strengths is its entrepreneurial environment which spawns thousands of new businesses every year. Certain areas of the country are becoming centers, of new business development, particularly New England and California, where concentrations of venture capital, technology and educational institutions create a "critical mass" for new business formation. A recent study by Penn State showed that over 90% of new businesses in over 40 "business incubators" across the country planned to remain within the same geographic area after leaving the _incubator. Evanston needs to foster its embryonic entrepreneurial environment so as to become a center in the Midwest for new business formation. Such a strategic goal holds the greatest potential for long term economic, stability. 0 . • EVANSTON ECONO111C DEVELOPKiENT STRATEGIC PLAN PROGRA11 �UPPUKi 1. Southwest Industrial Corridor Development Plan A physical development plan needs to be establishes, for the future development of the Southwest Industrial Corridor, the area south of Dempster and west of Dodge. Such a plan should evaluate the potential for industrial expansion as well as future industrial development, particularly as a site for additional light manufacturing that is an out,rowth of the kesearch Park. Due to the Southwest side's importance to the overall Evanston economy, this plan should also evaluate commercial services and job training 'needs in the area. Of particular concern is resolution of the future of the existinc rail freight line. The development plan should be pr-oduced by the City with the cooperation of Inventure. Supports: Retention, Attraction 2. Public Sector Economic Development Incentives A public incentive pachae must be developed which is prudent and effective as well as targeted to those businesses which the City wishes to retain and attract. The City already' has an effective Industrial f,evenue Bond finan- cing program and has agreed to incentive land virite downs and public improve- ment investments in selected development situations. Additional flexible incentives neeu to be developed and publicized in order to establish Evanston's competitive position. Such an incentive packa,;e could include discretionary public improvements, property tax phase -ins on tar( le ec rehabilitation (consis- tent with State and County taxing statutes), fore;oin(, buildin(; permit and licensiny fees within certain targeted developwent zones, use of eminent domain to acquire and transfer needed properties for business expansion, leveraged lendinc proc,�rams in targeted areas, and fortis of incentive zoning. Such an incentive package needs to be carefully structured in conversations both .within and without City ,overnment. Inventure �.:uuld offer its expertise and support in such discussions with the City's Lconun,ic Development Committee: State of Illinois incentives, such as Build Illinois, iieeu to be tailored .to fit Evanston's needs. New lesislation, which %,,oulu allo,.j the city (jreater latitude in structuring incentives, needs to be developed. Inventure, the City and the University should meet regularly to discuss legislative priorities and to plan for joint support of beneficial le�iislation. Inventure would coordin- ate these meetings. Inventure should also encoura;e its i.,e;rbers to participate in state-wide efforts to a ,ressively pursue economic development. Supports: Retention, Attraction 0 • EVANSTON ECONOMIC DEVELOPMENT STRATEGIC PLAN 9 3. Private Sector Economic Development Incentives Mirroring the need for a set of public incentives is a corresponding need for private incentives which can be brought to bear on a selected basis to assist in the retention .and attraction of targeted businesses. The creation of a private financing mechanism is probably the most flexible way to provide private incentives for business retention. A financing corporation could be established using private sector funds, supported through public and other contracts. Such corporations are becoming more prevalent throughout the country, though most are capitalized with public monies, an avenue which is probably foreclosed because of Evanston's already tight budget situation. These corporations are also focused on lending, whereas the corporation being proposed would have the ability to make equity investments as well as deal in real estate development. Another program emphasis of the corporation would be on minority business development, a function the corporation would be uniquely qualified to perform with both financing and technical assistance resources. Inventure would be the administrator of such a corporation and use its moral suasion in concert with its financing tools to affect to the best advantage all forms of business development. Supports: Retention, Attraction and Business Formation • 4. Retention Communication Program The joint City/Chamber/Inventure retention program, now under way, provides the much needed organized communication between business and government. This program, financially sponsored by Inventure, should be expanded to all com- panies on a regular basis after the initial targeted companies and industries have been contacted. Inventure, the City and the Chamber should continue this program through 1985. Supports: Retention 5. Research Park The Research Park is a major project in support of the Attraction Program. It provides a central physical location for high technology activities adjacent to the University which is required for any technology economy to flourish. A partnership, already .in existence between the City, University and the business community needs to be quickly brought to fruition through agreements on governance, real estate, covenants, and financing. The Research Park, though not the only major project in the City, must be treated as one of its highest priorities because of its potential to raise the City's entire economy to a higher level. Inventure should continue in its coordinative role, assisting both City and University to gain the most from the full range of their resources. Supports: Attraction, Business Formation • �. EVANSTON ECONOMIC DEVELOPMENT STRATEGIC PLAN 10 6. Downtown Development Plan The Central Business District (CBD) requires a general development strategy to direct its future development in terms of new office space use, specialty retail development, shopper amenities, traffic and parking. The CBD is the mainspring of any urban center. Because of its proximity to the Research Park and because it is home to many business service functions, it must be protected and maintained. A CBD development strategy could include a special financing district for joint downtown promotion by retailers as well as special services such as decorations, landscaping, parking, etc. The Chamber of Commerce has understood the need for such a plan for some time and is now overseeing a downtown planning committee effort. The Chamber should receive the support of the City, Inventure and Northwestern University in this planning effort. Supports: Retention, Attraction 7. City-wide Marketing Program Both the attraction and retention strategy require a new investment image for Evanston. Building upon its growing business services base, its high tech- nology potential and existing quality of life, the marketing program should have as its goal the repositioning of Evanston as a location for both real estate and business investment dollars. The target for the marketing program should be two -fold: 1) the real estate developer and investor who is always seeking new opportunities to catch a market as it develops and 2) the high tech business, corporate Headquarters or business service company looking for a new prestige address or a new source of skilled employees. It is proposed that such a marketing program be produced through Inventure'and funded by the City and the private sector. Supports: Retention, Attraction 8. Commercial revitalization Though the City has done an excellent job on South Chicago Avenue development, a commercial revitalization strategy for Howard Street and other areas needs to be put in place to complement the Southwest Industrial Corridor Plan and the overall attraction strategy. The City's major access corridors and edges must be given proper developmental attention so that they are consistent with the City's overall marketing image of a modern city with a high quality of life: Church Street, Emerson, Dodge and portions of Dempster, Main and other streets need to be looked at along with Howard to determine if beautification and revitalization programs ought to be.implemented. This commercial strategy will produce both new business formation as well as retention and contribute to the overall development of downtown by providing rejuvenated access points to the City. Planning, targeting and implementation of such an edge and arterial plan should be the responsibility .of the City with strong support from Inventure and the Chamber. Supports.: Retention, Attraction and Business Formation .µ::.a..�d�Y��c3 ar:��?' �'�°��... •j . �.•wS1 r��nn��.'�• � * A EVANSTON ECONOMIC DEVELOPMENT STRATEGIC PLAN 9. Business Incubator/Technology Commercialization Center II Strong support should be given to the proposed Business Incubator and the newly formed Technology Commercialization Center at Northwestern. The Incubator will provide the initial center for new business formation in Evanston and provide another anchor in the Research Park. The Technology Commercialization Center will formalize the technological and business assistance potential of the University in helping area companies to grow and expand. Working in concert with the business development corporation, particularly its venture capital function, the Commercialization Center gives Evanston a giant head start in its strategic goal of becoming an entrepreneurial center for the Midwest. The Center should be supported strongly by the University and be integrated into both the City's and Inventure's business assistance programs. Supports: Attraction, Business Formation 10. Arts and Entertainment The maintenance of a strong cultural environment is cruicial if Evanston wishes to be competitive in the recruitment of technology oriented companies. Because { of their dependence upon highly paid, highly skilled and all too mobile employees such companies are particularly sensitive to the need for an environ- ment which provides for varied lifestyles. Though no program is specifically recommended, technical assistance by Inventure for cultural and entertainment projects should be measured within the context of long term economic develop- ment. Responsibility for maintaining or further developing that environment must be equally shared by all in the community. Supports: Retention, Attraction, Business Formation •