I’m sure it comes as a surprise to no one that Berwyn, like most surrounding communities, is in need of economic revitalization.  What may surprise you is that Berwyn does not have a plan for economic revitalization.

The current state of the economy is creating difficult challenges for just about every municipality.  The problems emerge as a result of lower sales tax revenues, reduced commercial real estate tax revenues due to commercial foreclosures and failing businesses, and the increased costs of goods and services to city governments.  Throw in the resulting collateral damage of lost real estate transfer taxes, permit and license fees and you begin to realize the scope of the problem.

The numbers become more somber when you consider the fact that Cook County commercial property owners pay far more in taxes than typical residential homeowners.  As these commercial revenues dry up, you begin to see the formation of an economic formula that lays the groundwork for municipalities to impose much higher real estate taxes on residential homeowners.

Now consider the rate of residential foreclosures and ask yourself how many of us will be left to pay these higher taxes?  Berwyn residents need to understand that higher city expenses and decreasing city revenues translate into higher tax burdens on every Berwyn resident.  

Is there a solution?

Forming a solution requires understanding the problem.  Of course, elected officials need to tighten their belts and start running the city like a business, but those measures alone do not translate into a solution.

On behalf of Berwyn taxpayers, I would like to propose a clear strategy involving simple steps we can take which will generate millions of dollars of additional tax revenues and earn Berwyn the respect and prestige its residents deserve.

The ultimate goal is to improve our commercial tax base.  By improving the tax base, you ease the tax burden on Berwyn residents and taxpayers.  In this regard, we need to understand that our primary development opportunity in Berwyn is, unquestionably, located at the southeast corner of Cermak and Harlem (Cermak Plaza).  It is the gateway to Berwyn, serving to welcome thousands of visitors to Berwyn every day.

Currently the condition of the Cermak Plaza is  a commercial embarrassment to this city.

The long abandoned Service Merchandise shell was just the beginning of what is rapidly becoming a ghost town development populated by low quality, no growth business establishments and vacant storefronts.  And the immediate future is not promising.

For instance, Circuit City, having closed many stores nationwide, is on the brink of bankruptcy.  Their  survival strategy” to merge with Blockbuster, another company on the verge of bankruptcy, is like jumping on the Titanic as a lifeboat.  Ironically, the blighted condition of the Cermak Plaza provides Berwyn its last best chance of vastly improving the city’s seemingly endless revenue shortfalls.

Berwyn is faced with a rare and important opportunity.  The decisions we make today about the use of this important location will define Berwyn’s status and stature for the next 100 years.  Yet, despite this opportunity, we were ready to approve Food 4 Less as the major tenant at this location, arguably the worst possible choice among several other potential occupants such as Meijer, Costco and Lowes.

Without the benefit of any professional guidance or comparative analyses, there was no serious consideration given to solid recession-resistant anchors like Costco or Meijer. The choice of a  Food 4 Less was so shortsighted that major business leaders and professional planners throughout the community cringed at the proposal and were dumbfounded that we would not only choose  Food 4 Less”, but were willing to give Food 4 Less an incentive in the form of rebating the sales tax which would otherwise benefit Berwyn’s residents.

A copy of the professional comparative analysis of  Food 4 Less and Costco is available upon request and is also available at www.BerwynBrick.com. There you will see that the current political approach to managing this opportunity may cost Berwyn residents tens of millions of dollars in tax revenues over the next decade.

A conservative comparative analysis reveals, among other things, that Costco’s first year annual sales are estimated to be $78 million increasing to $132 million in its 10th year of operation at the Berwyn location.  Compare Food 4 Less estimates of total annual sales at $27 million increasing to $32 million in its 10th year. 

As we journey down this road, we need to ask the following questions:

— What type of development would be in the best long term interests of Berwyn residents and taxpayers?

— What type of development will generate more tax revenue to reduce the tax burden of Berwyn residents and taxpayers?

— What type of development will attract more people from surrounding communities to frequent Berwyn’s restaurants, stores and entertainment establishments? By shopping in Berwyn, people from other communities help to reduce the tax burden on Berwyn residents.

— What type of development will most likely attract the middle and upper middle class spenders and thus generate greater sales tax revenues to subsidize improvements in Berwyn?

— What type of development will have a positive impact on property values?

— What type of development will change the  FACE of Berwyn and provide the type of gateway at the corner of Harlem and Cermak that will tell the world that Berwyn has arrived ?

When municipalities have the opportunity to attract high quality business entities, a well-thought-out plan is needed.  The strategy which I am proposing involves public discussion at every stage and focuses on the following:

1. Consult with and hire a professional specialist to evaluate our options and formulate an economic development strategy that represents the best interests of Berwyn residents.

2. If the property owners are unwilling to join the city in executing the economic development strategy and are unwilling to sell the land, the city should move forward with legal action necessary to gain control of the property.

3. With or without the land-owners cooperation, the Cermak Plaza and perhaps the high school should be placed in a TIF district to finance substantial development.  Once in a TIF, the city is in a far better position to pursue an eminent domain solution.

4. Quality developers with proven mall revitalization experience must be solicited.  Developers would be required to conduct a study of the Plaza and submit basic design concepts as well as provide a list of high quality businesses that have expressed an interest in the project. 

5. Once a developer is chosen, the redevelopment agreement between the City and developer would act as the guiding document to revitalize the site and would represent the strategic economic development plan for the City.

This proposal was presented to the city council two months ago.  There is broad agreement with the content of the proposal among professionals and business leaders.  The timing of the proposal seems particularly appropriate as we celebrate Berwyn’s Centennial.  The proposal represents a professional strategy to jump-start Berwyn’s Second Century of Progress with Pride.

I proposed that Berwyn residents, the Director and President of the BDC and members of the business community be invited to participate in a city-wide discussion of the issues as they relate to the Cermak Plaza specifically and the City of Berwyn generally. Please contact your city officials to express your opinions about this matter.  The full analysis and proposal can be found at www.BerwynBrick.com (click on Case Study Number 1).