The Village of Skokie, Illinois is a mature, inner-ring suburb that experienced its major growth in the 1950s and 1960s. Located 16 miles northwest of downtown Chicago, and 12 miles east of O’Hare International Airport, Skokie is home to roughly 66,000 residents, according to 2008 U.S. Census estimates.

According to Tom Thompson, Economic Development Coordinator, “the Skokie Village Board has always taken a proactive approach to economic development. Skokie has been fortunate to enjoy a healthy cross-section of retail establishments, office space, and – unlike most of its neighboring suburbs – industry.”

In the late 1980s, however, many of its smaller retail downtown businesses were competing against the proliferation of large malls, including Skokie’s own redeveloped Westfield Old Orchard Center, he explains. In addition, the downtown area faced challenges including buildings that were becoming outdated, insufficient parking, and a general deterioration of its infrastructure.

Hence, the downtown area was faced with many vacancies. Establishing a Tax Increment Financing district in its downtown afforded the Village the flexibility it needed to address these issues, says Thompson.

Tax Increment Financing (TIF) is an economic development strategy that can help financially strapped local governments make the improvements they need, like new roads or sewers. TIFs can also provide incentives to attract new businesses, or help existing businesses stay and expand.

According to the Illinois Tax Increment Association, TIFs can provide these incentives, without a locality having to tap into general revenues or raise taxes.

“TIF calls for local taxing bodies to make a joint investment in the development or redevelopment of an area, with the intent that any short term gains be reinvested and leveraged so that all the taxing bodies will receive larger financial gains in the future. The funds for this investment do not come from current revenues, but from future tax revenues, not otherwise expected to occur. These new revenues are generated by increased public and private investment in identified, underperforming areas.”

Skokie adopted its second downtown TIF redevelopment plan in 2005, involving collaboration between the Village and Forest City Enterprises, for the purpose of developing the Illinois Science + Technology Park.

The new biotech campus has replaced a research facility left empty when Pfizer Pharmaceutical (previously G.D. Searle Company,) closed its Skokie facility in 2003. The $500 million project is owned and is being developed and managed by Forest City Science + Technology Group. The group is a national leader in life sciences park development, with a successful park in Cambridge, Massachusetts.

As part of the redevelopment plan, Skokie issued a $10 million tax increment bond in 2006. The bond proceeds were used by Forest City to raze seven buildings and to provide for certain new infrastructures improvements. The redevelopment of the site is ongoing, with 470,000 square feet of laboratory and office space available immediately. There is an additional 1.3 million square feet in build-to-suit opportunities. The new campus has attracted 20 tenants, including two new tenants, APP Pharma, and Lucid. By August, another 125 scientists will be moving onto the campus, which will bring combined new employment to over 1,000.

During his presentation at a recent Illinois Tax Increment Finance workshop held in Chicago, Skokie Mayor George Van Dusen said, “When we lost high-paying jobs in our downtown, we had to ask ourselves: What do we need now?”

“We realized, if it was jobs we had just lost, then what we wanted was more of the same. We wanted high-paying jobs. And we were reminded by one successful developer, that in this internationalist economy, high-paying jobs and good public transportation go hand in hand.”

A key element in the redevelopment plan has been to bring a new Chicago Transit Authority (CTA) Yellow Line transit stop to Skokie’s downtown. The Village will be holding a groundbreaking ceremony for the new transit stop on June 21, 2010.

The new Yellow Line stop will cost $20 million to construct, with the bulk of the funds provided by the state and federal funds. The balance will be provided through the second downtown TIF district. The station is expected to be open in the fall of 2011.

Essential to Skokie’s success with its planning, zoning, and redevelopment goals has been the strong spirit of resident volunteer activity.

Ann Tennes, Skokie’s Director of Marketing and Communications, explains that “Skokie has a very robust process of resident involvement, encompassing thirteen boards and commissions that serve in an advisory capacity to the Village’s elected officials.”

The boards and commissions often bridge the gap between business and government, and there is a healthy two-way exchange that breeds an understanding of the needs, wants, and limits of the public sector and private business.

“Recognizing that businesses that offer jobs and attract patrons increase economic activity, the Boards feed us ideas, and we respond in kind,” she says. “At the end of the day, we all want what’s best for the community.”

Peter Fugiel, Ph.D., co-authored this article with Mardee Alvaro, MuniNet editor. Peter, a frequent contributor to MuniNet Guide, recently hosted an Illinois TIF Financing Workshop, sponsored, in part, by MuniNet.