Hard Question for Geneva: Compete for Industrial Development or Bow Out?

It's really a chicken-and-egg nightmare for city leaders.

On the one hand, the city's tax base is way too heavy on the housing, too light on the industrial and commercial. 

Someone at Monday's special Committee of the Whole meeting—I think it might have been Mayor Kevin Burns—said a healthy balance is about 50-50 between residential uses and business uses. And think-tank analysts have determined that municipalities spend more than a dollar on services for every tax dollar brought in from residential development. But the services for industrial and commercial businesses cost less than a dollar for every tax dollar they generate.

The upshot is that Geneva—which is more in the range of 75 percent housing—needs to double its light industrial areas if it wants to get to the tax-base promised land. 

The good news is that there are still opportunities for such growth in certain parts of town. The bad news is, getting utilities to those areas requires investment.

So, as a policy-maker, what's the call? Does Geneva want to compete for new, light-industrial growth or throw in the towel because of the expense?

That's just one challenge Geneva City Council members are facing as they begin to look at the 2012-13 budget.

Public Works Director Dan Dinges told the City Council Monday that staff could use some direction from policymakers about what to pursue and what to let go.

A good example is the Southeast Development Area east of Kirk Road and south of the railroad tracks. The area is planned to be light industrial, but it will need infrastructure improvements to make it an attractive buy. Dinges said development "likely is to occur from Fabyan Parkway and head north."

"One of the question we’ve been discussing—should the city start looking at investing capital improvement funds to support that southeast development?" Dinges asked.

To extend water, sewer and electric services to the entire area might cost as much as $20 million over time, Dinges said. So the city has intended to make improvements in smaller bites, starting in the coming year, so that it's not a $20 million "all in." Geneva could use "recaptures" that would allow the city to recoup some of the infrastructure investment or set up a tax-increment finance (TIF) district to help pay for the improvements, Dinges said.

But those are actions that take time, and the city would have to pursue them aggressively—not an easy direction to make at a time when assessed values are dropping, state revenue sources are going away and constituents are begging for tax relief.

Complicating matters is that DuPage Airport is developing its own tech park to the east, "so we have that competition," Dinges said. The Airport Authority recently said it would change direction from a technology park to a traditional light-industrial park.

First Ward aldermen Sam Hill and Chuck Brown said they don't see any reason to invest funds from the 2012-13 budget in development of the southeast area.

"At the moment we cannot compete with DuPage Airport," Brown said. "This is a project we have to put on hold. I don’t think there’s a chance we’re going to be competing with that."

"That puts us right behind the Eight Ball," Hill said. "As long as DuPage is going to spend their tax dollars, we can't be (spending ours.)"

When the footing is equal and utilities are available to developers, Geneva does well in competing for industrial and light industrial development, because it has its own Electric Department and lower rates, Economic Development Director Ellen Divita said.

Monday's discussion was open ended, and no action was taken, but the consensus on the southeast development area seemed to echo the remarks of Hill and Brown: Put utility extension projects on hold and focus city economic development efforts in some of the industrial spaces on the far East Side that aleady have available utilities, in the area of FONA International on Averill Road and the Northern Illinois Food Bank on Dearborn Court.