Position Statement on Clarendon Hills Train Station Redevelopment Plan - By: Citizens for Clarendon Hills - (C4CH) October 2012
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Position Statement on
Clarendon Hills Train Station
Redevelopment Plan
By:
Citizens for Clarendon Hills - (C4CH)
October 2012
www.citizensforCH.com
www.citizensforch.com
Introduction
In 2011, Clarendon Hills Village staff presented a train station redevelopment plan to the Village
Board. The plan was prepared by external consultants who proposed general ideas and options
for both a short, and a long-term concept to redevelop the approximately one acre site
currently identified as the Metra station building and adjacent parking lot. At a March 2012
Village meeting the redevelopment plan was unanimously accepted by the Village Board,
assuring the project's scope and concept would move forward as the Village's official train
station redevelopment plan. During a subsequent Village meeting in May 2012, the Board
adopted a resolution supporting a grant application from the Illinois Transportation
Enhancement Program - effectively 'green-lighting' the initial multi-million dollar phase of the
long-term redevelopment project.
Background
The train station redevelopment concept is a key part of the outdated Downtown Master Plan
completed in March of 2006. The train station site was identified as an important downtown
feature, which attracts commuters from within and outside the village on a daily basis. While
the importance of the Metra commuting traffic impact to the downtown business community
has not changed since 2006, the economic environment and commercial redevelopment risk
profile has changed substantially since then.
Following the decisive 86% - 14% defeat of Home Rule, the train station redevelopment
concept is working its way through the capital approval process in a measured fashion by
Village officials. C4CH has identified this project as a potentially high impact issue to taxpayers,
lacking appropriate public focus.
The details in the project plan expose the "red flags" which bring about the failure of many
large-scale municipal projects: the lack of transparency, the absence of clear written and
measurable objectives, the misalignment between staff and taxpayers, poor project
management, omitted or inadequate market studies, and improper planning to name a few.
Those failures burden taxpayers with the reminder of bad financial decisions for decades and
leave in their wake, long-lasting visual scars.
The long-term detrimental effect of excessive municipal debt borne by taxpayers is well
documented in our own backyard.
Two recent Chicago Tribune stories documenting high-debt/poor commercial decisions:
http://articles.chicagotribune.com/2012-06-09/bridgeview-property-taxes-DEBT-TOYOTA-PARK-HOME-RULE
http://articles.chicagotribune.com/2012-09-09/bellwood-property-taxes-DEBT-HOME-RULE
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What is the Train Station Development Plan?
The train station redevelopment plan comprises both new construction and refurbishment of
existing structures under two phases; a “Short-Term Plan”, and a “Long-Term Plan. The short-
term plan is offered as an immediate improvement to the site while allowing time for market
and economic conditions to improve before pursuing the long-term plan.
Short-Term Plan:
The preliminary cost estimate for the short-term plan ranges from $5.0 million to $6.1 million.
This plan has two primary components; a
newly-constructed pedestrian underpass
approximately 200 feet east of the Prospect
Avenue rail crossing, and cosmetic
improvements to the existing Metra
commuter building and warming shelters.
The pedestrian underpass is the single
largest cost component of the short-term
plan at approximately $4 million.
The short-term plan comprises no
commercial investment opportunity and
would be Village taxpayer financed, beyond
grant funds received. In addition, the
number of parking spaces would not
change.
With the pursuit of the ultimate long-term
plan, the approximate $1 million cost
incurred for remodeling the existing Metra
Source: Village of Clarendon Hills; Final Report for ITEPMay25-2012
building would be an ‘abandon’ expense, as
the building would have to be demolished to
make way for the significantly larger
structure proposed in the long-term plan.
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Long-Term Plan:
The preliminary cost estimate for the long-term plan ranges from $15.3 million to $18.4 million.
In addition to the pedestrian underpass, the long-term plan includes a two story, mixed-use
building with attached three story parking garage. The proposed building design would add
8,770 square feet of first floor retail space and 8,925 square feet of second floor office space.
The parking structure would have room for 190 parking spaces, reflecting a net increase of 23
reserved Metra commuter parking spaces. While the cost of the parking structure alone
exceeds $5 million, it would only be expected to operate ‘revenue neutral’; that is, permit fees
would be entirely offset by the maintenance and upkeep costs of the structure. Each of the 23
new parking spaces would cost taxpayers at least $217,000.
The proposed development is estimated to generate approximately $32,000 in property taxes
in a stabilized year, of which $3,800 would represent the Village’s share. In addition, the retail
component is estimated to generate approximately $35,000 in annual sales tax – assuming
100% occupancy.
A key acknowledgement of the long-term plan is that the large percentage of public space
creates unfavorable project economics, discouraging private investment interest. In fact, the
estimated lease revenues generated under a ‘100% occupancy’ scenario would not support a
suitable rate of return to a private developer, for just the mixed-use building portion of the
development project.
Source: Village of Clarendon Hills; Final Report for ITEPMay25-2012
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C4CH Position Statement on Current Train Station Development Plan
While C4CH would support future funding for "minor redevelopment" of the train station
facility, we reject outright a multi-million taxpayer funded plan. A commercial redevelopment
project should have little, if any, financial burden on the taxpayers. Commercially-driven
projects in the Village should be based upon sound and sustainable market principles. In
essence, only those commercial redevelopment plans which are; self-financed, have a high
degree of transparency and public input, follow prudent project management & business
protocol, and are consistent with a new master plan should be brought forth.
The current train station redevelopment plan is misaligned with taxpayers’ disposition for
controlled spending and represents an irresponsible financial commitment by the Village
officials. C4CH considers the plan unacceptable as presented (both short-term and long-term
concepts) and should not be considered viable plan options.
An economic review of the current train station redevelopment plan reveals a long-term cost
structure that would significantly outweigh any incremental financial benefit this project would
bring to the Village. By the project consultants’ own admission, the unfavorable project
economics would not support private investment based on the large percentage of non-
revenue generating public space/structures. A significant portion of the proposed
redevelopment costs would need to be supported by residential property taxes. Most
importantly this project places taxpayer money in a risky real estate venture that will be
managed by Village staff unskilled in this business area, repeating mistakes made municipal
managers throughout Illinois over the past decades.
Summary of the key issues supporting C4CH’s opposition to the current plan:
1. The project represents a multi-million dollar debacle; completely out of line with the size
and character of Clarendon Hills
2. The plan is missing written and measurable objectives, calling into question, adequate
transparency.
3. The plan lacks a basic target market/train station user survey. Proper surveys are a
fundamental requirement for large-scale commercial projects.
4. The current project plan is based on the outdated & arguably flawed Master Plan from
2006.
5. Village management should not be, and is not skilled to be in the real estate development &
operating business.
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Analysis of the Village Board’s Accepted Plan
A C4CH sub-committee has thoroughly reviewed the Houseal Lavigne Associates plan document
and identified areas of concern in the plan presentation and concept.
No clear project objectives (written and measurable)
Unclear project scope
No formal user & market surveys
High project costs
High risk for failure
No clear project objectives were evident from the plan document. The project plan
document and official Village train station-related documents offer vague and questionable
redevelopment objectives. The following were referenced in the project plan Executive
Summary:
1. "A stated goal of Metra was to increase parking." Is this Clarendon Hills’ goal?
2. "The vision for the Village was to have an iconic station facility while
incorporating a commercial or mixed use building." Is this necessary? And if so, a
fraction of the spending can achieve a “charming” station consistent with the
image and character of Clarendon Hills.
3. "An additional consideration is the construction of a pedestrian underpass due to
potential grant money." Obvious considerations for a small town like Clarendon
Hills would be the long-term impact of operating and other costs, which were
not addressed in the plan.
Additionally, the grant funding application for the 'Illinois Transportation Enhancement
Program' contains the following project 'objective':
"The goal of the Train Station Area Improvement project is to improve commuter
accessibility and experience and reverse a trend of declining ridership at the Clarendon
Hills station"
Clear objectives are the critical starting point for any project. The goal and vision presented in
the current plan are general and do not identify specific solutions to specific problems. Good
project objectives must be specific, measurable, action oriented, realistic and time-bound.
Unclear project scope reveals itself in the train station plan through a justification of both a
short-term and long-term vision. The plan discussion acknowledges the current economic
downturn but still offers a monumental and unsustainable capital budget. Project alternatives
are also questionable – if not misleading. As the quote from the plan document below
demonstrates, a decision to pursue the short-term project vision provides a stealthy strategy
toward the ultimate redevelopment goal defined by the long-term vision.
"While the development concept clearly represented the long-term vision for the site, it
was determined that an interim (short-term) concept should also be created that would
provide immediate improvement to the site while allowing time for market and
economic conditions to improve before pursuing the larger scale development."
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C4CH calls into question the inappropriateness and possibly, misleading effort of the
consultants to offer multiple project options when it appears there is only one project option.
As a result, C4CH also questions the consultants’ responsibility to represent the interests of
Clarendon Hills taxpayers in this project or any future village projects.
Is there a need or want of a pedestrian underpass by Clarendon Hills residents or commuters?
While safety is paramount, no amount of capital or operating expense will completely eliminate
risk. In addition, it is our view that the level of incremental operating expenses associated with
general maintenance, access, security, drainage, and repair for both the structure and elevator
equipment are not consistent with a small village’s scope.
Other community, pedestrian/rail underpass projects have been driven by specific crossing
location safety issues and supported by historical incident rate metrics. Historical safety data
has not been provided for justification of Clarendon Hills' underpass proposal. In addition, it
does not appear that a risk assessment and risk mitigation analysis has been performed. A
general statement that a pedestrian underpass is safer does not constitute a risk analysis. Even
though the current Clarendon Hills pedestrian underpass project proposal would eliminate the
at-grade crossing just to the east of the Metra station building, the much more frequently used
at-grade Prospect Avenue pedestrian crossing would remain unchanged.
No formal user or market survey was conducted. The plan document refers to meetings
between the consulting team, Village Project Steering Committee, Village staff, business owners
and separate public forums. While the Village is commended for these efforts, public forums
do not provide representative nor accurate data, or user-level input sufficient from which to
base a financially successful project design that dispatches large sums of taxpayer money. The
current train station redevelopment concept would represent the largest and most expensive
project in the history of Clarendon Hills.
Well-designed surveys are requisite in identifying user groups and profiles, and understanding
user requirements and needs. Proper surveys and market studies also help refine the project
scope as well as determine the willingness for customers to pay. Since the Metra commuter
experience is a fundamental element of the proposed train station project, a user survey of
existing and targeted additional riders/parkers should play an essential role in any user-
centered design.
Surveys being quantitative in nature can also be subject to statistical analysis. Statistically valid
sample sizes can relatively small based on "margins of error" and confidence levels. For
example, a statistically valid sample size for a population of 8,000 with a 5% "margin of error"
would require a sample size of 367 respondents. A 10% "margin of error" sample would
require a sample size of just 95 respondents.
It is also critical for market research activities to analyze local business requirements. Details
on adjacent town retail square footage and occupancy should be taken into consideration and
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the validation of demographic and retail supply/demand data against the Clarendon Hills
business district must occur.
High project costs for both the short-term and long-term project concepts are not in line
with the capital risk profile for the Village (over 95% of Village tax revenue is sourced via
property taxes). The plan also lacks review of realistic, on-going annual operating costs.
In both project concepts, a pedestrian underpass is a prominent feature - as well as a significant
portion of the project cost. However, justification for the pedestrian underpass feature is
mentioned only in passing and not supported by a review of data, statistics or qualitative
analysis. Specifically, the plan document justifies the pedestrian underpass in the following
manner:
"The significance of this facility is that it not only improves the site and provides for a
safer crossing, it enhances the attractiveness and accessibility of commuter parking on
the north side of the tracks."
The short-term project plan cost estimate (excluding grants/other funding) ranges from $5.0 -
$6.2 million. Other than the pedestrian underpass feature which has a cost estimate of $3.4 -
$4.0 million, Metra commuters would only experience cosmetic enhancements to the existing
facilities and structures. In fact, the cosmetic and service improvements to the station alone
total nearly $1 million.
The longer-term project plan (excluding grants/other funding) ranges from $15.2 - $18.5
million. This plan includes a complete redevelopment of the site (not mutually exclusive to the
short-term plan commitment) to include a two-story retail/office building totaling 17,695
square feet of leasable space. New-build commercial projects in the Village have been non-
existent since the real estate crash. At least three large, 'green field' parcels in the central
business district have sat idle - some for multiple years.
The ‘lure and temptation’ of potential grant money to pursue "status projects" may indeed
have the opposite impact (additional and/or unexpected operating costs, further safety
concerns, additional property management distractions, etc.) and should be studied in detail
before further pursuit.
High risk for failure becomes more probable when there is no attempt to recognize the
problem, or problems that the project is trying to solve. The current project concept is a
contradiction in design and perceived project objectives. In addition, the natural economic
imbalance of taxpayer funding to support a very large commercial project will manifest in
differing priorities and poor decisions over the long run.
A worst case scenario would involve an underutilized commercial project, increasing the tax
burden to home and business owners for decades. Toyota Park in Bridgeview, IL is a case study
in misaligned scope and objectives between municipal government, developers and taxpaying
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residents on a grand scale. As a contrast to Clarendon Hills, however, Bridgeview’s home rule
status allowed local government to bypass residents and local business owners in the process.
In Summary, C4CH recommends the project plan be rejected and the following actions
undertaken, related to the further progression of a train station redevelopment option:
1. Conduct a statistically valid, unbiased user survey and proper market study
with impact analysis to Clarendon Hills business areas.
2. Develop a well-defined scope and clear, written and measurable objectives -
independent of current project concepts.
3. Perform a thorough property tax impact study for any train station
redevelopment project which moves forward.
4. Summarize and communicate to residents, the prioritized capital projects
portfolio along with the property tax impact for each capital item.
5. Plan around a primary requirement that private investment assumes the
commercial risk. Taxpayer involvement is required when proposed risks are
underwritten by property taxes.
6. Ensure traffic flows support commercial redevelopment needs. Realistic
options to change existing traffic flows must be part of commercial project
evaluations.
7. Plan public hearings resulting in a referendum for any large-scale project
commitment.
Finally, the existing Village Master Plan should be scrapped and replaced with a realistic plan
aligned with the size and character of Clarendon Hills. The 2006 plan is unquestionably out of
date and should not be a vehicle through which new development projects are developed.
C4CH Steering Committee Members:
Bruce Carlsen Brendan Head John Q Smith
Ed Corcoran Kirk Purcell Eric Stach
Jan Cummings Andy Schmidt John Zelenka
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APPENDIX:
I. Houseal Lavigne Associates Train Station Plan Document
Final Report for
http://www.clarendonhills.us/TrainStationPlanning.cfm ITEPMay25-2012.pdf
II. 2006 Downtown Master Plan
http://www.clarendonhills.us/DowntownPlanning.cfm
III. Village meeting minutes from March 19, 2012 and May 21, 2012 under Committee Section
"Land Use" on the Village website for official approval and subsequent approved actions:
MARCH 19, 2012 - http://www.clarendonhills.us/minutes%20march%2024.pdf
MAY 21, 2012 - http://www.clarendonhills.us/MINUTES05-21-12a.pdf
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APPENDIX cont'd:
IV. General train station survey from:
Clarendon Hills 2010 Community Needs Survey
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