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Wednesday, June 11, 2008 08:44 pm

No new restrictions on redevelopers

Springfield needs a neighborhood development policy

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Untitled Document Frustrated builders call it the last straw — a union-originated Springfield ordinance to require those who get city grants to contribute to an apprenticeship program. The original proposal, which came before the City Council on May 20, was amended to make it apply only to grants of $500,000 or more, but union officials are reportedly trying to get the threshold lowered. If they are successful, this will become one more burden in a city already known for being difficult to develop in. An apprenticeship program, as part of an overall neighborhood development strategy, would be a good way to help minorities get started in the building trades, but the way this has been presented makes it more of a burden than a path toward opportunity.
Developers who qualify for grants are usually dedicated to rebuilding neighborhoods, taking on difficult projects that don’t make economic sense in traditional terms. They deserve to be applauded for their efforts. Instead, their successes are greeted with more restrictions, plus inconsistent and confusing rules. City program managers often blame unions, and union bureaucrats often blame one particular union business manager, who is said to be more powerful and politically influential than all the rest. What is really to blame is the absence of a neighborhood development policy. Despite the best efforts of the city’s frustrated economic development staff, rather than being proactive about neighborhoods Springfield has slipped into a reactive mode, saying, in effect, “If you insist on redeveloping slum areas, bring us a proposal. If it fits our rules and our programs, and we can’t find any other reason to say no, then maybe we’ll provide a minimal grant.” Developers yearn for a day when the city comes to them and says instead, “We want to revitalize neighborhoods, and we’re looking for help to do that.”
“They should be figuring out ways to help us,” says Ron Fafoglia, executive director of TSP-HOPE, a nonprofit group that builds affordable homes on Springfield’s east side. “Instead, they spend all their time telling us why we can’t do what needs to be done.”
The Enos Park neighborhood is fortunate to be in a TIF district, one of the few residential areas of the city to have that distinction. The TIF was put into effect in 1997 as a way to improve housing and infrastructure. However, neighborhood residents have been disappointed in the results, because so far none of the money in the TIF fund has been spent on the rehabilitation of housing, as they had been promised it would be. Unlike other comparable cities, Springfield requires all projects receiving TIF funds, no matter how small, to meet prevailing wage requirements — to pay union-scale wages. The one exception is that developers have been allowed to use TIF funds for property acquisition while being given verbal assurance that prevailing wage is not required on the project. Even so, to gain access to acquisition grants they are required to sign documents stating that they will pay the prevailing wage. It is confusing for developers to be given one set of rules verbally while being asked to sign something else. Another source of confusion: There is a Springfield ordinance specifying that TIF grants of $25,000 and more require the prevailing wage, but city staff members say the ordinance doesn’t mean that grants below $25,000 are exempt. The extra cost of union-scale wages would make most residential rehab projects even less feasible than they already are in low-income neighborhoods, where housing prices are lower than elsewhere in Springfield, one of the lowest-priced housing markets in the country. Besides, few prevailing-wage contractors are available and willing to bid on small residential projects, which are more tedious and less lucrative than new construction or commercial projects.
In a more neighborhood-friendly city like Decatur, TIF funds have been used to change the face of the Near-West neighborhood. “Our city has made neighborhood growth and development one of its top priorities,” said Billy Tyus, assistant city manager in charge of public relations. Over the past three years, nearly $500,000 in grants has been provided to homeowners, who pay a 50 percent match. The grants, of as much as $30,000, are for exterior rehabilitation or the correction of code deficiencies. So far, 22 such projects have been funded, making a visible difference along West Main Street between downtown and Millikin University. The program has been so successful, officials may request another $500,000 allocation to cover other areas of the neighborhood. Not only does Decatur not require prevailing wage, these small TIF grants don’t even need City Council approval. “These are private homes, not public facilities,” explains Greg Crowe, assistant city manager for economic development. Because there is very little red tape involved, an old neighborhood has new vitality. That could happen here if policymakers would begin asking what neighborhoods need rather than how they can add more requirements to an already dysfunctional system. It only makes sense that small projects should have fewer restrictions than large projects. It would also make sense for nonprofit projects to have fewer restrictions than for-profit developments. What makes the most sense is for Springfield to find ways to get money flowing back into its blighted inner city, to get boarded houses rehabbed, to get vacant lots built on, to get tax-burden properties back on the tax rolls, and to bring old neighborhoods back to life.
Fletcher Farrar, president of Illinois Times, heads the nonprofit Old Neighborhood Rehab Inc., which rehabs houses in Springfield’s Enos Park neighborhood.
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