The pay-off from the South Shore Line's West Lake Corridor and Double Track NWI investments of a combined $893 million depends in part on what happens around the rail line's stations, and success there will take patience, money and a tolerance for risk.
That's what officials in several Chicago suburbs told a group from Northwest Indiana earlier this month on a tour of communities on the Metra commuter rail line. The day-long trip highlighted the complexity of leveraging that rail infrastructure into further development around train stations.
The tour was organized by One Region and included more than 50 officials and business people with a professional interest in transit-oriented development.
The Jan. 13 tour visited the Hyde Park neighborhood in Chicago, and the suburbs of Berwyn, Lombard, Glen Ellyn, Wheaton, Lemont and Orland Park.
Leveraging train stations means luring residents who hold lucrative city-based jobs, and who want the denser, mixed-use neighborhoods that have defined the transit-oriented development seen in cities and suburbs around the country.
For residents, it usually means cheaper, though still urban-like and upscale, living. For communities — especially built-out, landlocked ones — it promises population and tax-base growth without geographic expansion.
Whether that promise is met depends on sticking to a plan, forging partnerships with developers, dealing with local politics, and riding the ups-and-downs of the general economy, local development officials said.
A long process
The scale of development varies — Orland Park's goal is to create a downtown, but TOD is also used to help reinvigorate existing downtowns, as in Glen Ellyn, which has "more of a boutique, niche kind of downtown," according to Staci Hulseberg, the village's director of Planning and Development.
One feature common to all is relatively dense residential development, mostly apartments but sometimes condominiums. Lemont's TOD consists mainly of 82 canal-front condos with businesses on the ground floor. Wheaton boasts block-filling apartment complexes, including the more than 300 units in Wheaton 121. There, residents can workout, take a swim, wash the dog, play bocce and host a barbecue without leaving the complex.
Glen Ellyn is joining the apartment boom with plans for two buildings near the Metra line running through downtown. One would be on the site of a former family-owned grocery store, and another on the site of a former auto mechanic shop.
That situation — waiting for locally owned property to come up for sale, then guiding its development — is also common. Lemont is currently shepherding development of an old hardware store property along the I&M Canal.
Orland Park's decade-old Metra station at 143rd Street was used as a catalyst for development that includes luxury apartments, upscale shopping and a new University of Chicago outpatient facility.
"It's been a long process for these communities," One Region President and CEO Leah Konrady said at the outset of the tour. "It's not something that happens overnight."
Local government's role
"This area you're sitting in today used to be a blighted, industrial brownfield," village Director of Development Services Karie Friling told the tour group on its arrival in Orland Park.
The village created a 25-acre Tax Increment Financing district in 2004 and built the underground infrastructure needed for development.
Then, "the recession hit us, and everything came to a grinding halt," Friling said.
The recession delayed development in several Illinois communities. In Orland Park, village officials decided to push forward, which meant fronting the money for development.
The village sold $63 million in bonds, but is now profiting from development that includes the five-story, 295-unit Ninety7Fifty apartment and commercial building, Friling said.
The use of tax increment financing (TIF) for TOD development is fairly common. Although few are as extensive or take place with the kind of surge seen in Orland Park, which has come to include another upscale apartment building, a Mariano's-anchored retail development, the 120,000 square-foot University of Chicago outpatient center and plans for more entertainment and shopping.
At smaller-scale developments, TIF revenue is often used for facade, restaurant and retail grants and forgivable loans.
Public money helps get development "off the floor," a KPMG consultant working for the Regional Development Authority told the One Region tour group. Local government absorbs some of the risk, "de-risking" the project to varying degrees, for the developer.
"Anything you can do to help de-risk — those things are going to be critical," KPMG's Ted Hamer said.
Dyer Town Councilwoman Mary Tanis called the TOD tour "very inspiring."
She said she particularly appreciated seeing the variety of architecture, admiring most the City Hyde Park apartment and retail building designed by renowned architect Jeanne Gang's Studio Gang Architects.
Tanis said she was also glad to see different ideas about how, and where, to locate bicycle lanes. And, the example of Orland Park's Ninety7Fifty apartment building, which reached full occupancy shortly after being built, was instructive, she said.
"It will help give us a vision," she said of the trip, "how we can plant those seeds in the right place."
The tour "gave us a good selection of communities and opportunities," Hammond City Planner Brian Poland said.
"One of the things you're seeing," he said, "is each of those communities handled their architectural standards differently."
He said the downtown TODs, particularly in Berwyn and Lemont, stood out as examples for Hammond, though its two stations will be treated differently.
"The type of densities we can achieve at the Gateway Station are greater than South Hammond," he said.
Poland also noted the greater flexibility Illinois communities have regarding use of TIF funds, particularly Orland Park's $63 million bond issue to assist in the Ninety7Fifty project. "We can't do that," he commented.
Dyer Town Councilwoman Cathy Lareau said it's difficult to compare the Metra communities that have had commuter rail service for years with South Shore communities that don't have rail service yet.
"Overall, I have my concerns," she said. "I'm trying to keep an open mind."
Patience and planning pay, according to Illinois officials experienced with TOD. Several of the officials brought up the need for a "champion," a person or group with a singular vision and willingness to say "no" to any proposal that doesn't fit precisely with the plan.
"We only have one chance to get it right," Orland Park's Friling said.