Changed suburban spending because of COVID-19, Naperville edition

While most public attention with COVID-19 has focused on big cities and countries, numerous suburbs will deal with the effects of the pandemic as well. Here is how Naperville, a large and well-off suburb, is planning to tackle a budget gap:

The city of Naperville is shaving nearly $25 million off its 2020 budget in the wake of the economic downturn caused by the coronavirus pandemic…

City Manager Doug Krieger said some of the projects were selected to be postponed because they’re considered “nice-to-haves” and aren’t expected to cost significantly more to be completed in future years. One major project, a $2.6 million plan to improve downtown streetscapes, was included on the list for deferment because “the downtown merchants did not want to proceed” with it in light of the pandemic, he said.

The moves will help the city offset anticipated declines in revenue sources — such as sales tax, food and beverage tax and motor fuel tax — as residents and businesses continue to follow the stay-at-home order…

Other work that will not take place this year includes $9 million in water meter-reading technology upgrades, a $7 million road widening project on North Aurora Road and $1.1 million of work toward a park at 430 S. Washington St. to be built in conjunction with North Central College, as well as smaller projects such as LED lighting conversion, tree planting, electric vehicle charging stations, flooring replacements and conference room IT and electric upgrades.

Suburbs and other municipalities can generate tax revenue through several sources (as noted above). Property taxes are affected by property values, which appear at this point appear to be holding firm during COVID-19. Sales taxes are generated by local businesses; this will certainly be down in communities (though the decline of retailers was already an issue). Food and beverage taxes will be down. And the number of people buying gasoline – feeding into the motor fuel tax – is down (and projections for the state’s funding through this suggest a big dip). In Illinois, we are near a third month of reduced business and social activity and this will make a big dent in municipal finances.

At the same time, based on the descriptions here, it sounds like an average resident of Naperville would not even notice that these improvements are not addressed this year. Of course, it could create a backlog for future years – pushing projects down the road means other planned projects might be delayed later – but the focus is on helping to address the current issues.

Naperville may be an unusual case compared to many other suburbs. It is a big community with a lot of successful businesses. The local government prides itself on being well-run and stable. It is not clear how long Naperville could continue to work through budget shortfalls but it is likely better prepared for this than many places.

This means that many municipalities could be facing tough questions in the months ahead about local projects and local funding. If the federal government and states are struggling with missed revenues, this will certainly affect municipalities who have to address local budget issues.

The millions in tax incentives Naperville has offered to keep businesses

According to the Daily Herald, Costco has requested $5.5 million in tax rebates from Naperville in order to open a second store on the site of a former Kmart. This might fi with the incentives Naperville has offered to businesses since 2008:

Marriott

Total incentive offered: $10 million

Total incentive paid: $2,865,000 in hotel/motel tax and sales tax rebates

Expiration: When total is met or 20 years after agreement started in 2012

Hotel Arista/CityGate Centre

Total incentive offered: $7.5 million

Total incentive paid: $2,545,000 in hotel/motel tax and sales tax rebates

Expiration: When total is met or 20 years after agreement started in 2008

Hotel Indigo/Water Street District

Total incentive offered: $7.5 million

Total incentive paid: $965,000 in hotel/motel tax and sales tax rebates

Expiration: When total is met or 20 years after agreement started in 2018

Embassy Suites

Total incentive offered: $7.4 million

Total incentive paid: $1,457,000 in hotel/motel tax and sales tax rebates

Expiration: When total is met or 20 years after agreement started in 2015

Main Street Promenade

Total incentive offered: $1.4 million

Total incentive paid: $306,000 in sales tax rebates

Expiration: When total is met or 25 years after agreement started in 2013

There are a couple of ways to look at this. Perhaps this is just the cost of doing business these days. Big businesses can ask for tax breaks or incentives, plenty of places are willing to offer them, and everyone can still think that they win. For some companies and some communities, this money might just be a small drop in the budget.

On the other hand, it is striking that Naperville has to play this game. This is not a desperate suburb looking for jobs or a turnaround. This a large, wealthy suburb with a lot of accolades. And yet, to get a Costco which would provide tax monies plus fill an annoying vacancy on a stretch the city would like to improve, the city is being asked to provide millions of dollars in breaks to make it worthwhile for Costco. And if Naperville does not pony up, do they just locate in a nearby suburb?

Looking at the list of businesses for which Naperville has provided incentives, four of them involve hotels and a few involved newer developments. Competition is tight in a number of sectors, particularly among retailers and filling suburban vacancies. Again, maybe this is what it takes to keep businesses happy, jobs in town, and some tax money flowing.

Naperville will decide on this soon.

UPDATE 2/19/20: Naperville approved the deal and one leader spoke of the move as providing a catalyst to revive the Ogden Avenue corridor.

Developing suburban tourist destinations along major highways

The suburb of Naperville is looking to develop entertainment and tourist destinations on undeveloped land in the northwest corner of the community:

In the works at the two properties both using the CityGate name are an apartment building with a rooftop event center on the east side of Route 59, along with an arena for hockey games, concerts and conventions; and on the west side, a brewery or winery with a restaurant and hotel, as well as residences and offices — all designed with public art as a focal point.

What CityGate as a whole aims to do, developers and city leaders say, is become a true entertainment destination, giving visitors and residents reasons to come, places to stay — even places to live…

Still, there is optimism for CityGate plans, which eventually could include a band shell, a pedestrian bridge over Route 59 and a connection to the Illinois Prairie Path.

“From what we’ve been able to gather, Naperville is gaining a number of people visiting because of tourist attractions outside of Naperville,” Halikias said. “We’re looking at it and saying, ‘You know what? We should have the tourist attractions in Naperville.'”

And all right off the interchange of Route 59 and I-88. Three thoughts in response:

1. Even though many Americans likely do not think “suburb” when they hear about tourism, more suburbs are pitching themselves as cultural or entertainment centers. Tourism can help bring in money from visitors, which helps grow the local tax base without further burdening local residents or property owners. Additionally, the right kind of tourism can be viewed as family-friendly, a vibe many suburbs would like to cultivate.

2. One of the draws of Naperville is its vibrant downtown. Would an entertainment center on the edge of the city compete with the downtown and its restaurants, stores, and other amenities? This connects to a broader question: how many entertainment centers can thrive in the suburbs of the same region, let alone within the same community?

3. The development is said to include apartments, nearly 300 of them. While this helps provide a base for the new amenities nearby, it does not completely alleviate a problem of this development: how accessible is it to nearby residences or communities and how car dependent will the new place be? Even with access to the Prairie Path, the majority of visitors will need to come by car. Two sides of the property will be bordered by very busy roads. The majority of people will drive, park, and leave. This is a very different kind of center than Naperville’s downtown – which can be said to help contribute to Naperville’s small town charm – because of transportation. Perhaps the development will have a full range of options that can keep people there for hours. But, creating a coherent space with its own feelings and around-the-clock vibe could be hard to develop.

Naperville gaining a reputation for racist incidents?

A recent controversy involving race at a Naperville Buffalo Wild Wings leads to considering evidence for and against the idea that Naperville has more racism than other suburbs:

The city, which census figures show is nearly three-quarters white, has also faced concerns about diversity and inclusion. After Naperville resident and state Rep. Anne Stava-Murray said the city had a legacy of white supremacist policies, the city convened a public Naperville Neighbors United discussion, where organizers said the city had work to do in areas like building minority representation among city leaders

Kevin Mumford, a University of Illinois professor who has studied race relations, said racism could be on an upswing in suburbs such as Naperville because of events in Chicago and nationally. African-Americans in high-profile positions in Chicago, such as the new mayor and leaders of the Chicago Teachers Union who were highly visible during the recent teachers strike, can cause “status anxiety” among white residents across income levels. That can be exacerbated by Trump supporters who feel a strong anti-Trump sentiment in Illinois, he said…

“I know about Naperville,” tweeted pop singer Richard Marx, who grew up in north suburban Highland Park. “And, disgusting as this is, it’s not terribly surprising.”…

Naperville has a problem with racism, but it’s no worse than in any neighboring suburb, Sullivan said. Instead, she suggested Naperville residents are more willing to confront it. Residents shared the video of the gas station confrontation and the essay from the former Naperville resident because they wanted to talk about them, she said.

The two sides presented in the article put it this way: is Naperville more racist than other suburban communities or does it just get more attention because of its status and the willingness of community members to talk about the issue? Figuring that out would require deeper knowledge of how race and ethnicity has played out in Naperville as well as insights into how race and ethnicity is treated across a variety of American suburbs, including suburbs similar in characteristics to Naperville.

No suburb wants this reputation, particularly one with lots of accolades, wealth, and a vibrant downtown. And Naperville leaders would likely point to some significant demographic changes in the community in recent decades plus efforts to encourage interaction between groups in the community as well as with local government. At the same time, communities can acquire a status or reputation through repeated events. Similarly, what leaders say is happening in a community does not always match day-to-day realities of what residents and visitors experience.

(UPDATE 11/6/19 at 10:48 AM: The character of suburban communities can change through different decisions and reactions to both internal and external social forces. In recent years, Naperville has become home to political protests, a change that would have been difficult to forecast for a traditionally conservative community.)

Marijuana sales viewed as hurting family-friendly suburbs, Naperville edition

Tuesday night the Naperville City Council voted against allowing marijuana dispensaries to locate within the suburb:

Naperville City Council members voted 6-3 Tuesday to opt out of recreational marijuana sales within city limits, and directed staff to come back with information on a potential referendum question for council consideration.

The decision to opt out of recreational pot sales came several hours after hundreds of people began packing the Naperville City Council chambers as residents and non-residents waited their turn to comment on the issue of whether to allow the retail sale of pot. The discussion on marijuana sales brought 238 people to sign up for public comment on the topic — a vast majority speaking in favor of opting out while wearing white and orange “opt out” shirts.

Over the past couple weeks, the group was organized to rally and lobby city council members to keep recreational cannabis dispensaries out of Naperville. At the same time, residents in support of retail marijuana sales have circulated a survey on the issue.

People who asked city council to opt out Tuesday night are concerned recreational pot dispensaries would lead to increased availability to children and would hurt the “family friendly” brand of Naperville.

This is not a surprise. A few weeks ago, I wrote about the likelihood that wealthier suburbs would not want to sully their brand by allowing marijuana sales. A community like Naperville has a reputation to protect: it is large, wealthy, has a vibrant downtown, highly-rated school districts, and acres upon acres of single-family homes. While marijuana sales may do little to affect behavior in a community of over 140,000 residents, this is about an image. Not too long ago, the vibrant downtown presented a similar issue: alcohol-related incidents were getting out of hand and the city responded.

At the same time, Naperville could change its mind later. Perhaps the dispensaries will not cause issue in similar communities. Perhaps the city will want the extra sales tax revenue. Perhaps the group that turned up in large numbers in front of the City Council to opt out will fade away and advocates will win the day. But, at least for now, Naperville wants to – and to be honest, does not need to look for quick money or be on the leading edge of this – protect its brand.

More broadly, how long until marijuana sales and use becomes normal fare in the American suburbs? For decades, some claimed the suburbs makes people conservative: they want to protect their families and homes. However, the political tides of suburbia have turned (including in DuPage County as well as in Naperville) and attitudes toward marijuana and other drugs have changed.

Three thoughts on the finding that 7.5% of housing in Naperville is affordable

Naperville is a large – over 140,000 residents – and wealth – a median household income of just over $114,000 – suburb. It also does not have much affordable housing:

A state agency recently faulted Naperville as the only Illinois community of 50,000 or more lacking affordable housing, which, according to the federal government, means housing costs make up no more than 30% of a household’s income. In a report last year, the Illinois Housing Development Authority found just 7.5% of Naperville homes are considered affordable based on the regional median income, among the lowest percentages in the state.

Some elected officials fear Naperville’s high housing costs could drive out seniors and push away recent college graduates and middle-class professionals. As those city leaders consider a slew of new developments, they and housing advocates are debating how and whether to include affordable units that could bring in new residents and help people such as Melekhova stay…

Efforts to include affordable housing in Naperville developments have been met with some resistance. Residents have questioned the effects affordable units would have on their neighborhood and whether the look of buildings with affordable units would fit the character of the area.

One question submitted on a note card during a panel on affordable housing in May was more pointed: “What steps can landlords utilize to minimize the potential negative impacts of the associated tenants utilizing affordable housing?”

Based on my research on suburbs and Naperville, three quick thoughts:

  1. Naperville enjoys being a wealthy suburb. It has a really low poverty rate for a city its size. It has lots of white-collar jobs. While this tends to be put in terms of having a high quality of life, nice amenities, and good schools, there is clearly wealth.
  2. There is not a lot of affordable housing because that is not the kind of housing Naperville prioritized for the last fifty years. As the suburb really started to grow in land area and population in the 1960s, there were public discussions about building apartments. This is not what won out in the long run and the community approved subdivision after subdivision of nicer single-family homes. (See my 2013 article that details some of this.)
  3. More recent discussions and the comments highlighted in the article are common ones in suburban debates over affordable housing. When suburbs discuss affordable housing, they often are thinking of people that would desire in the community such as younger adults and retirees. They are not explicitly seeking out poorer residents. Such concerns can be put in different terms – privileging “quality” development or protecting the “character” of neighborhoods – but they often do not address housing for the many Americans working in lower-paying jobs. And there may be some support for affordable housing units but it is harder to find the suburban homeowners who want to live near those units.

All that said, truly addressing the issue of affordable housing requires more effort than adding a few units spread throughout the large suburb. A larger discussion about what kind of housing the community desires and what kind of residents it wants would have to take place before the number of affordable housing units would truly jump.

Take a road trip to (downtown) Naperville

I found a suggested road trip to the suburb of Naperville, Illinois in a recent AAA magazine:

NapervilleRoadTrip

Several things strike me about this list:

1. All but one of the listed items to do is in downtown Naperville (with that other location almost out of the suburbs on the northwest side). This is a testament to the vibrancy and uniqueness of downtown Naperville.

2. Related to #1, all but one of the locations is walkable from the others. This is probably pretty unique in many American suburbs which are automobile dependent (as is the majority of Naperville).

3. What is missing from this list: Naper Settlement, the downtown shopping options, the rest of Naperville (see #5).

4. There is no mention here of proximity to Chicago. Naperville stands on its own with over 140,000 residents even though Chicago is accessible by car or train within roughly an hour. Would a road trip to a smaller and (perceived to be) safer location – a suburb – be more appealing to many Americans than a global city?

5. Does this accurately represent what Naperville is? On one hand, yes. The downtown features of Naperville represent a unique collection of recreational and consumer options within a suburban downtown. On the other hand, no. Naperville is a sprawling suburb marked by numerous subdivisions, strip malls, and lots of driving. Naperville is unusual both because of its downtown and its size and wealth with the latter two features perhaps not providing much appeal for a road trip.