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Apr 07, 2009
Skokie's new twist on attracting restaurants and retailers to its struggling downtown made all the difference to Robyn Mendheim, who plans to use a village "rebate" of up to $50,000 to rehab the interior of a century-old building.
"Without the village's help, this wouldn't have been possible," to buy the property, said Mendheim, who wants to lease space to a bakery. "It's a tremendous opportunity. It's very difficult to get financing from a bank these days."
Experts and village officials say Skokie's willingness to pay to dress up old buildings is an example of the creative ways local governments are trying to lure business in a difficult financial landscape.
From Frankfort to Elmhurst, and Wheaton to Lombard, communities are either tweaking old incentive programs or discussing new ones, said Kristi DeLaurentiis, of the Metropolitan Planning Council. "That is what every community should be looking at, enhancing the vitality of their downtowns," DeLaurentiis said.
In Naperville, for example, officials have set up a new $200,000 grant program to try to spruce up the Ogden Avenue corridor, a roughly 2-mile strip of shopping centers and restaurants, said Doug Krieger, the city manager. The focus, he said, is on "signage, entrances—anything that can make Ogden Avenue more navigable."
Lombard, like Skokie, is also trying to lure restaurants downtown, which has a significant number of vacancies, according to city officials. A sizable carrot is a forgivable loan up to $100,000 if the restaurant stays in business for at least 10 years, said William Heniff, the village's director of development.
"After 10 years, it's no longer a loan, it's a grant," he said. "It's a waterfall."
In Skokie, the hope is that the rebate initiative will help create jobs and tax revenue and spur more development, said Mayor George Van Dusen.
New restaurants and retailers downtown will complement projects such as the Illinois Science and Technology Park, which has created 800 jobs among 14 tenants, the mayor said.
The rehab program started last year, but is especially important now, Van Dusen said, because of the challenging economy.
"I don't think I've talked to a businessman since last summer who hasn't told me, 'I'm hanging on,' " Van Dusen said. "We have to be kind of bold and think creatively and take some chances."
The new plan provides up to $50,000 to rehab the interior of a building used for retail or a restaurant. The money is paid after the work is complete, but having it available can help an owner obtain financing, officials say.
That was enough to help entice Mendheim, who bought the building at 8044 Lincoln Ave. with a partner in July. A video gaming company has moved onto the second floor.
The village is advertising the interior rehab program in print and on radio.
Mendheim plans to add restrooms, flooring and a new fire-resistant ceiling as an incentive to the bakery to move in on the first floor.
Mendheim already had used a similar but older village program aimed at fixing up building exteriors so she could replace cornices, second-floor windows and a glass storefront. She will get another $50,000 from the village for the exterior work.
Skokie has spent about $600,000 in the past 15 years helping rehab the facades of about a dozen buildings downtown, says Tom Thompson, the village's economic development coordinator. In the current economy, creative financing is necessary because of the difficulty getting traditional bank loans, said developer James Matanky, president of Matanky Realty Group based in Chicago.
"It's a whole different era, when you can't get regular financing," said Matanky, whose company recently put together a $3 million grocery store project in the Back of the Yards neighborhood.
The effort used a variety of non-traditional funding, including money from special taxing districts as well as private investment, Matanky said.
"Right now, if you're lucky, a bank is going to loan you 50 to 60 percent instead of 85 percent," he said.
In southwest suburban Frankfort, village officials are mulling ideas to help businesses get started in their town of about 16,500.
Details of how a grant program might work and be funded are being discussed, according to director of development Jeff Cook. The money could be used for rehabilitation or to pay some of the start-up costs for businesses to locate downtown.
The main idea, he said, is to do whatever it takes to keep the community's financial engine running.
"We now find ourselves in an economic climate where businesses are just holding on," Cook said.
Freelance reporter Robert Channick contributed to this report.
jjlong@tribune.com
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