City Council

AGENDA Committee of the Whole Meeting April 10, 2017 5:00 p.m. A. Roll Call B. Items Also on the Regular Agenda C. Considerations 1. A Recent History of DeKalb Growth Trends. D. Public Participation E. Recess for Executive Session of the City Council 1. Approval to Hold an Executive Session to Discuss Personnel as Provided for in 5 ILCS 120/2(c)(1). 2. Approval to Hold an Executive Session to Discuss Collective Bargaining as Provided for in 5 ILCS 120/2(c)(2). 3. Approval to Hold an Executive Session to Discuss Executive Session Minutes as Provided for in 5 ILCS 120/2(c)(21). F. Adjournment Assistive services available upon request. Hearing assistance devices are available in the Information & Technology Office, which is located to the right, just before entering Council Chambers. DATE: April 5, 2017 TO: Honorable Mayor John Rey City Council FROM: Anne Marie Gaura, City Manager Jo Ellen Charlton, Community Development Director SUBJECT: A Recent History of DeKalb Growth Trends. I. Summary The year 2008 is recognized by many in DeKalb to be the year the economic downturn hit the City the worst. Layoffs in City staff cut deep across many departments. Building Department reports show a steady decline in the value of construction permits beginning in 2006 where values totaled $43.8 million, reaching $16.8 million by 2008. With the exception of a single $25 million 3M project in 2010, values continued to decline for three more years, when the decline bottomed out in 2011 with only $5.9 million in new construction for the entire year. TOTAL CONSTRUCTION VALUE $43,804,626 $32,703,335 $32,121,097 $16,769,706 $12,984,362 $5,886,978 2006 2007 2008 2009 2010 2011 In the years since 2011, the City has realized steady increases in overall construction values. After 10 years, total construction values in 2016 surpassed 2006 construction values. This report takes a closer look at these trends and some of the important projects that contributed to DeKalb’s return to construction values that haven’t been achieved in over 10 years. II. Analysis Occasionally, staff must address perceptions that the City is not business friendly. Another common perception is that development is stagnant in the City of DeKalb. While recent efforts by staff and elected officials to be more business friendly are being recognized and helping dispel that image, this analysis was undertaken to evaluate the theory that development continues to be stagnant. The remainder of this report utilizes construction value data provided by the applicant and pulled from building permits dating back to 2009. Only those permits valued $100,000 or more were incorporated into the analysis in order to exclude minor alteration permits and allow for a focus on new growth or significant enhancements to existing properties. The chart below shows a steady increase in construction values since 2011, and breaks down permits by type of use. Specific data is attached to this report as Exhibit 1. It is interesting to note that while overall trends are increasing, some years are attributed to large economic development efforts or single development projects. DeKalb Developments Valued > $100,000 $60,000,000 $50,000,000 $40,000,000 Residential Institutional $30,000,000 Industrial Commercial $20,000,000 $10,000,000 $- 2009 2010 2011 2012 2013 2014 2015 2016 Page |2 For example, the $40 million 3M project in 2016 was an important contributor to DeKalb’s continued increase in construction value for the year. Without the project, construction values would have declined over 2015 by over $25 million. Bringing this project forward in the timeframe required by the developer required a significant effort by City staff and elected officials, which ultimately saved hundreds of 3M jobs from leaving the region. Commercial development during the same year was comparatively strong, with over 17 permits, including the new Aspen Dental building and multiple commercial build- outs or alterations. Six of these projects were for various restaurant projects that exceeded the $100,000 threshold established for this study. A few significant projects were also responsible for construction values achieved in 2015 as well. Two Target projects in Park 88 totaled just over $20 million in construction value. In addition, nearly $4.5 million was spent to construct the University Plaza project as tallied in the residential category, while $12 million in the institutional category was added as a result of the Oak Crest DeKalb Area Retirement Center project. Totals in 2014 were fueled by construction of the new library and a mosque, which show up in the institutional category. Commercial activity totaled nearly $5 million that same year, with several new restaurant buildouts and alterations (Wingstop, Panera, Culvers, Subway, Ellwood), a new airport hangar, and the expansion of Manning Ford. More commercial value was added in 2013 than any of the years evaluated. During this year, a new hotel (Hampton), a new McDonald’s, and Pappas’ new mixed use building on Sycamore Road were all newly permitted that year. Several other significant remodels and new tenant build-outs were also accommodated in 2013. A $1.5 million building on Wagner Court added to the industrial totals in 2012. Commercial totals during the same year totaled nearly 8.3 million and included investments for 130 W. Lincoln Highway. Also of note is that while construction of new residential units has not regained the magnitude achieved in 2006 and 2007, most years experienced some alterations large enough to exceed the $100,000 limit established for the study. This is represented by the rust color in the table above. The map provided on the next page shows the geographic distribution of construction projects over the years by color. Additionally, the size of the project is also represented, with larger circles representing a larger construction value. The map clearly represents that development in the community is not stagnant or limited in area of size. New development is evenly distributed throughout the community with a wide range of both small and large investments being made. Page |3 Page |4 It is important to note that none of the data represented above includes City, school district or Northern Illinois University construction projects, which also occurred during the time period evaluated. The $13 million Police Station started in 2012, and the $85 million high school began construction in 2009. Northern Illinois University construction projects are also not included in the data. Like the library projects, these projects do not add to the tax base, but they do contribute to the short term economy by providing construction jobs to residents or individuals who likely spend money in the community. In order to further test the results of the data obtained from building permits, staff evaluated total and new equalized assessed value (EAV) aggregate data from the County dating back to 2005. This data is presented in the table below. Note that the table includes different dollar values on the left and right sides of the chart. Red line values representing total EAV are shown on the left side, while blue line values representing new EAVs are shown on the right side. It is worthy to note the downward trend of new EAVs starting after 2005, while the total EAV trend line continued to increase until 2008. Possible explanations for this variation are the time that it takes for the market to correct total EAVs, or the time that lapses between County reassessments that happen every four years, known as the quadrennial reassessment. It is also important to note that assessed values can be expected to be at least two years behind permit data valuations. This is because values associated with permits is reported at the time the permit is issued (prior to construction). Assessed values are not fully reported until the year after a project is completed. It is therefore not surprising that the 2011 low shown in the table on Page 1 doesn’t show up until 2013 in the table below. City of DeKalb Total EAV & New Property EAV $800,000,000 $35,000,000 $700,000,000 $30,000,000 $600,000,000 $25,000,000 New Property EAV $500,000,000 Total EAV $20,000,000 $400,000,000 $15,000,000 $300,000,000 $10,000,000 $200,000,000 $100,000,000 $5,000,000 $0 $0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Total EAV New Property EAV Page |5 The increasing trend line in new EAV is also what would be expected based on permit data, although it does not appear to be at the same rate as shown in the permit data, which may not show up until 2018 or 2019. III. Conclusion Permit data shows that construction values in 2016 rose to a level that was higher than total construction in 2006, which was the last year evaluated prior to declining trends that bottomed out in 2011. Furthermore, this 2016 data is the end of a five year increase in construction values that occurred consistently after 2011. This data is contrary to popular belief from some that development is stagnant in the City of DeKalb. While this analysis shows that many of the annual increases can be attributed to single or a few major projects, these projects are none-the-less an important part of the City’s efforts to promote and/or support development in the community. These projects all contribute to both the short term economy in terms of construction jobs, and the long term economy for those projects that contribute to the property tax base. They are also viewed by prospective developers as a positive when considering DeKalb as a possible location to locate or expand their business. Supporting the “right” projects as opposed to many projects has been DeKalb’s recent history and has positioned the City well in achieving overall construction value increases. Continuing these trends by supporting economic development efforts that encourage new development and continued investments in existing properties are important steps in positioning the City on the right track toward stabilizing its tax base, which will in turn help to reduce the overall tax burden. The year 2017 will include increases for University Village, Casey’s, Sonic, a new gas station, and the downtown projects recently approved by the City Council. These projects include the approval of the new mixed use Cornerstone project, Sundog IT's rehab of the old Moxie building, and the Forge’s rehab of an existing downtown space for their brewery and tasting room. These and other projects being targeted in Downtown DeKalb will add to construction values in 2017 and beyond. Exhibit 2 provides a graphic overview of recently completed, approved and projects under construction in downtown DeKalb. It also shows the locations of properties where significant investments in civic projects may occur. Projects outside of the downtown are also on staff’s radar. Efforts to stabilize and grow projects on West Lincoln Highway and Sycamore Road are being evaluated. Staff also continues to work with its development partners on industrial opportunities along Peace road and elsewhere throughout the community. The City’s success depends, in large part, on perceptions of potential investors that are often times based on what they hear on the street or see in print regarding the local economy’s health. The information in this report supports the story that growth in DeKalb is not stagnant. These statistics, along with a willingness to support new investments, by Page |6 the actions of staff to move worthy projects through the development process to a successful approval by the City Council, are viewed positively by investors considering DeKalb locations. Staff encourages City officials and residents to use this information as a basis to speak positively of growth and economic development in DeKalb. Page |7  APPENDIX 1 PERMIT DATA FOR PERMITS GREATER THAN $100,000 Property Address Value Description Totals 2009 Commercial 2555 SYCAMORE RD 6,900,000 TARGET STORE 1037 S ANNIE GLIDDEN RD 168,310 GOODWILL 1740 E LINCOLN HWY 300,000 GAS STATION 2270 BARBER GREENE RD 400,000 TAILS TRAINING CENTER 917 GREENBRIER RD 100,000 ALTERATION OF 8 UNITS 7,868,310.00 Residential 312 QUINLAN AV 275,000 house 449 QUINLAN AV 125,000 house 437 QUINLAN AV 125,000 house 425 QUINLAN AV 125,000 house 455 QUINLAN AV 125,000 house 1021 S SIXTH ST 150,000 house 3415 SANBORN LN 300,000 house 109 COBBLESTONE TRL 100,000 1,325,000.00 Industrial 1832 PLEASANT ST 1,000,000 DEKALB FORGE ADDITION 1,000,000.00 Institutional 507 E TAYLOR ST 1,100,000 ROOM ALTERATION 1,100,000.00 2009 TOTAL 11,293,310.00 2010 Industrial 1250 MACOM DR 25,000,000 3M - NEW 25,000,000.00 Commercial 3260 SYCAMORE RD 125,000 FIRE JOB - PHYSICAL THERAPY 1405 S FOURTH ST 178,000 DOLLAR GENERAL BUILDOUT 2518 SYCAMORE RD 300,000 SEARS 2500 SYCAMORE RD 380,000 HOBBY LOBBY TENANT BUILDOUT 2563 SYCAMORE RD 138,000 DENTIST OFFICE 2201 SYCAMORE RD 450,000 SHELL BLDG - COMMERCIAL 2451 SYCAMORE RD 150,000 MAURICES BUILDOUT HOBBY LOBBY LANDLORD 2500 SYCAMORE RD 475,000 BUILDOUT 2151 SYCAMORE RD 450,000 ADVANCED AUTO 1455 COUNTY FARM RD 100,954 BIOLIFE ALTERATION CAFETERIA ALTERATION 900 CRANE DR 350,000 UNIVERSITY PLAZA 2870 PLEASANT ST 850,000 AIRPORT HANGAR 3,946,954.00 Residential 900 CRANE DR 450,000 CAFETERIA 489 RUTLAND RD 250,000 house 447 RUTLAND RD 250,000 house 577 MAGNOLIA ST 160,000 house 1,110,000.00 2010 TOTAL 30,056,954.00 2011 Commercial 1250 MACOM DR 100,000 3M GUARDHOUSE 1401 PLEASANT ST 250,000 TEGRANT OFFICE SPACE 1211 S FOURTH ST 112,000 FIRE REPAIR - CHUCK JOHNSON Page |8  WALMART-REFRIGERATED DOOR 2300 SYCAMORE RD 175,000 CASES 1212 S SECOND ST 200,000 PINE ACRES REMODEL 400 E HILLCREST DR 125,000 BUSINESS STRIP CENTER 705 E LINCOLN HWY 200,000 GAS STATION RENOVATION 118 W LINCOLN HWY 125,000 CASTLE BANK ALTERATION 1022 W LINCOLN HWY 1,100,000 CVS 115 W GARDEN ST 170,000 fire restoration 1015 W LINCOLN HWY 168,000 ASPEN LEAF YOGURT 2,725,000.00 Industrial 770 ENTERPRISE AV 100,000 NEW INDUSTRIAL BLDG 800 NESTLE CT 190,000 NESTLE 290,000.00 Institutional 1145 RUSHMOORE DR 650,000 HOPE HAVEN ADDITION 339 WURLITZER DR 137,000 HOPE HAVEN 787,000.00 Residential 808 DORKEN LN 115,000 house 3469 COMSTOCK AV 250,000 house 365,000.00 2011 TOTAL 4,167,000.00 2012 Commercial 130 W LINCOLN HWY 2,000,000 NEW NB&T 2569 SYCAMORE RD 450,000 ALDI'S 2520 SYCAMORE RD 800,000 ROSS DRESS FOR LESS BUILDOUT 1401 PLEASANT ST 225,000 TEGRANT 835 EDGEBROOK DR 2,300,000 COMPLETE RENOVATION BETHANY HEALTH CARE - INTERIOR 3298 RESOURCE PKWY 400,000 ALTERATION 1076 RIDGE DR 150,000 FIRE REPAIR 121 W LINCOLN HWY 400,000 CASTLE BANK REMODEL 1024 W HILLCREST DR 120,000 COMPLETE RENOVATION 2062 SYCAMORE RD 396,801 ULTA - TENANT BUILDOUT 335 WURLITZER DR 180,000 ADDITION 770 ENTERPRISE AV 350,000 ADDITION. H.A. PHILLIPS AMERICA'S BEST CONTACTS & EYE 2506 SYCAMORE RD 150,000 GLASSES 141 W LINCOLN HWY 350,000 1ST NATIONAL BANK RENOVATION 8,271,801.00 Residential 714 S 1ST ST 180,000 180,000.00 Industrial 2754WAGNER CT 1,500,000 NEW INDUSTRIAL BLDG 1,500,000.00 2012 TOTAL 9,951,801.00 2013 Commercial 1101 W LINCOLN HWY 400,000 663 S ANNIE GLIDDEN RD 4,150,000 HAMPTON INN 545 E LINCOLN HWY 1,500,000 MCDONALDS COMMERCIAL SHELL W/ 8 2179 SYCAMORE RD 1,000,000 APARTMENTS ABOVE 901 S ANNIE GLIDDEN RD 157,000 ANYTIME FITNESS 1212 W LINCOLN HWY 250,000 RED ROOF - CONCRETE WORK 2359 SYCAMORE RD 115,000 SEARS 2466 SYCAMORE RD 100,000 BUFFALO WILD WINGS REMODEL 2211 SYCAMORE RD 1,000,000 SHELL 302 GROVE ST 181,000 FERANDAS Page |9  2347 SYCAMORE RD 420,000 DSW - LANDLORD 2300 SYCAMORE RD 500,000 WALMART REMODEL 9,773,000.00 Residential 832 RIDGE DR 1,492,000 507 E TAYLOR ST 160,000 ALTERATION OF 8 UNITS 3628 PEBBLE BEACH CT 235,000 house 122 ELM ST 135,000 house 3403 COMSTOCK AV 200,000 house 540 FOX HOLLOW 250,000 house 2,472,000.00 Industrial DEKALB FORGE NEW 1832 PLEASANT ST 890,000 CONSTRUCTION 816 E LOCUST ST 1,300,000 CONEX CABLE ADDITION 1455 COUNTY FARM RD 550,000 BIOLIFE REMODEL 2585 WAGNER CT 150,000 INDUSTRIAL BUILDOUT 2,890,000.00 2013 TOTAL 15,135,000.00 2014 Commercial 2347 SYCAMORE RD 289,000 DSW - TENANT BUILDOUT 1015 W LINCOLN HWY 150,000 WINGSTOP 2476 SYCAMORE RD 150,000 PANERA ALTERATION VERIZON WIRELESS - 2387 SYCAMORE RD 350,000 ADDITION/ALTERATION 1262 W LINCOLN HWY 450,000 CULVERS 217 S SECOND ST 150,000 COSENTINO LAW FIRM ALTERATION 2300 SYCAMORE ROAD 100,000 SUBWAY 2575 WAGNER CT 200,000 RAYNOR DOOR 402 MANNING DR 1,480,000 BRAD MANNING FORD ADDITION 1387 S FOURTH ST 500,000 MARDI GRAS LAUNDRA-MAT 3232 PLEASANT ST 1,200,000 AIRPORT HANGAR 2219 SYCAMORE RD 250,000 ELWOOD STEAK HOUSE 5,269,000.00 Institutional 801 NORMAL RD 300,000 MOSQUE 309 OAK ST 25,464,568 DEKALB PUBLIC LIBRARY 25,764,568.00 Residential 532 FOX HOLLOW DR 225,000 house 427 N FOURTEENTH ST 106,000 house alteration 808 DORKEN LN 265,000 house addition 900 CRANE DR 2,875,719 South Tower Floors 2-8 3,471,718.50 2014 TOTAL 34,505,286.50 2015 Commercial 1116 W LINCOLN HWY 128,000 MUKESH PATEL 629 E LINCOLN HWY 200,000 SKATEBOARD LOVE 800 NESTLE CT 215,000 NESTLE 2579 SYCAMORE RD 200,000 ANYTIME FITNESS 913 W LINCOLN HWY 510,000 BURGER KING 2300 SYCAMORE RD 1,083,500 WALMART COOLING EQUIPT 2383 SYCAMORE RD 325,000 CHIPOTLE 237 E LINCOLN HWY 120,000 Q-NAILS 2337 SYCAMORE RD 213,917 ATHLETICO 2,995,417.00 Institutional 2944 GREENWOOD ACRES DR 12,000,000 OAKCREST ADDITION 12,000,000.00 Industrial P a g e | 10  733 ENTERPRISE DR 182,947 LIGHTHOUSE CATHOLIC HVAC TARGET DISTRIBUTION CENTER - 1115 MACOM DR 5,000,000 ALTERATION TARGET DISTRIBUTION CENTER - 1115 MACOM DR 15,006,654 ALTERATION 20,189,601.00 Residential ANNIE GLIDDEN HOUSE 1115 N ANNIE GLIDDEN RD 200,000 ALTERATION 900 CRANE DR 105,000 CANOPY 900 CRANE DR 3,286,536 NORTH TOWER 900 CRANE DR 974,399 CENTRAL BUILDING 453 RUTLAND RD 256,000 house 3486 SANBORN LN 225,000 house 3701 GREEN TREE LN 400,000 house 1726 FURROW ST 175,000 house 217 FORSYTHE LN 214,913 house 3664 PEBBLE BEACH CT 260,000 house 900 CRANE DR 410,817 SOUTH TOWER 1ST FLOOR 6,507,664.43 2015 TOTAL 41,692,682.43 2016 Commercial 625 BETHANY RD 350,000 RESOURCE BANK 2577 SYCAMORE RD 330,000 STARBUCKS ALTERATION 811 W LINCOLN HWY 106,000 STRUCTURAL REPAIR 2061 SYCAMORE RD 378,000 SHELL BUILDING - ASPEN DENTAL 2101 SYCAMORE RD 368,000 SHELL BUILDING - 1127 W LINCOLN HWY 750,000 POPEYE'S LOUISIANNA CHICKEN BRIAN BEMIS 1890 SYCAMORE RD 400,000 ADDITION/ALTERATION 460 E LINCOLN HWY 400,000 SHELL BUILDING - 2061 SYCAMORE RD 250,000 ASPEN DENTAL TENANT BUILDOUT 2300 SYCAMORE RD 127,000 ALTERATION - WALMART 1321 SYCAMORE RD 300,000 WENDY'S ALTERATION 920 GREENBRIER RD 110,000 ALTERATION 1180 W LINCOLN HWY 140,000 BOWLRRITO 456 E LINCOLN HWY 150,000 MARCO'S PIZZA 2160 SYCAMORE RD 450,000 CINEMA REMODEL 1001 N ANNIE GLIDDEN RD 280,000 CASEY'S ADDITION 251 E LINCOLN HWY 108,000 THAI PAVILLION Residential 540 W LINCOLN HWY 150,000 house addition 455 LARKING AV 210,000 house 125 MCCORMICK AV 100,000 house alteration 460,000.00 Industrial 1650 MACOM DR 40,000,000 3M 1801 PLEASANT ST 500,000 DEKALB FORGE NEW 40,500,000.00 Institutional 2350 PRIDE DR 6,000,000 CHRIST COMMUNITY CHURCH 6,000,000.00 2016 TOTAL 46,960,000.00 P a g e | 11  Downtown Projects WL OC US PIN TS E T ST ST N5 TH N1 ST ST OA Egyptian K ST ST N2 Theatre ND ST Commercial Kitchen ST PAL N3 RD W LINCOLN HWY ME N4 RC T TH Potential Potential EL OC STEAM Site US STEAM Site ST TS T N6 New Thai TH DeKalb Pavilion Cornerstone Forge Brewery Sun Dog ST EL INC S1 ST OL UNION PACIFI NH C RAILROAD WY Mixed Use Commercial ST N7 TH GIR ST A RD S2 ST ND ST S3 RD ST GR O VE S4 ST TH GIR A ST RD ST S5 FRA TH NK LIN City Completed S T Hall ST Approved S7 TH Possible SPE Civic Project Site ROP ST CT S6 ST TH Under Construction File: \Community Development\Downtown Opportunities.mxd Created: 1/31/2017 DJE Return to Agenda I 0 125 250 500 750 1,000 Feet Last Updated: 4/6/2017 DJE