Success in Small-Town USA Development

by Gary Davis
Farnsworth Group, Inc.

With some good planning, hard work and a champion for the cause, small-town development can thrive.

Martin Luther King, Jr. once said, “If you can’t fly then run, if you can’t run then walk, if you can’t walk then crawl, but whatever you do, you have to keep moving forward.” Many small towns in Illinois are struggling to fly, run or walk in the area of development, due to the challenges rural communities have been facing for several decades. However, there are some examples indicating that things can change.  

One example of a small-town development success story is the City of Havana, which continues to move forward with new business development resulting from hard work and wise planning, both past and present. The pursuit of new development is led by Mayor Brenda Stadsholt (the champion for the cause), the City Council and other community members enthused to see Havana move forward. 

This central Illinois river town sits at the mouth of the Spoon River and has a population of 3,076—the 419th largest city in Illinois, according to the U.S. Census Bureau. Despite 21 percent of its residents living below the poverty line, Havana continues to pursue growth and economic vitality. Mayor Stadsholt said it best in a recent presentation when she stated, “We are moving Havana forward with pride and optimism.” She says this as the City continues the process to become a central Illinois destination that provides visitors with scenic and business attractions. 

How Did They Do It?
The City jumpstarted its journey of development back in 1986, when the mayor and City Council made a decision to establish Tax Increment Financing District No. 1 (TIF 1). Knowing that TIFs have a 23-year life, the City was able to legislatively extend TIF 1 for an additional 12 years, allowing the continuation of TIF-funded revitalization efforts into 2021. In order to pursue new development along the Illinois River and the south side of Havana, the City designated its second TIF District in 2006—an area known as the Route 78/Illinois River District. These decisions are still paying off years later. 

Havana has seen significant activity in TIF 1 since its inception, resulting in development throughout the TIF 1 District. One significant investment was made in 2001 when a 120-acre business park was established on the east side of the city. Phase 1 of the business park—developed along U.S. Route 136 using a combination of TIF and bond funds—saw several million dollars of private investment. These developments included a grocery store, a farm and home retail store, an agricultural implement dealer, and a chemical warehouse/transfer station. 

Building on this success, the City will complete the infrastructure for Phase 2 of the Havana Business Park in 2019, making the remaining 35 acres of property available for new development. Havana successfully secured a $720,000 U.S. Department of Commerce and Economic Development Administration grant for 50 percent of the costs, and it plans to match the grant with TIF funds to complete the project. 

To further community involvement, encourage city-wide development, and provide a framework for planning, the mayor and City Council updated Havana’s 1969 Comprehensive Plan and approved it in 2014. The City-appointed steering committee, assisted by the University of Illinois and Farnsworth Group, initiated the update in 2013 and spent two years seeking public input, developing the plan, and securing Planning Committee and City Council approval. This plan sets the direction for the development and expansion of city services, which is expected to result in exciting things for Havana’s future. 

Downtown Revitalization
One element of the Comprehensive Plan that ignited excitement in residents, business owners, the mayor and City Council alike was downtown revitalization. As with many central Illinois communities, Havana was experiencing a decline in its downtown business area. Many of the buildings were in significant need of improvement, the brick streets needed restoration, and the sidewalks were beginning to deteriorate. Fortunately, the downtown business area is mostly located within the TIF 1 District.  

Below is a conceptual streetscape master plan for the Havana Downtown TIF District, courtesy of Farnsworth Group:Conceptual streetscape master plan for the Havana Downtown TIF District

In 2017, Mayor Stadsholt, working with the City Council and Ron Hills, the economic development director (a major champion of this effort until his passing in late 2018), decided to utilize much of the remaining TIF funds to improve downtown buildings and infrastructure. The City, working with stakeholders, 353 Court LLC (downtown business consultant) and Farnsworth Group, utilized TIF funding to address what they saw as a path to new development in the downtown. Within two years, Havana has seen significant development in and around the downtown business corridor. Intergovernmental cooperation with Mason County, Havana Park District and Havana School District, among others, has been instrumental in facilitating these efforts. 

After investing nearly $1 million of TIF funds to match private investment, the community is enjoying more than 10 new businesses; several existing, renovated businesses; and a renewed interest in being downtown. Many of the new startup businesses are owned by younger adults—a testament to the mayor’s efforts to keep young people in Havana. Equally encouraging: some of the new business owners are from out of town and believe Havana is a place to locate and be successful. The variety of businesses continues to grow, from boutiques to outdoor sporting supplies to a quilt shop to restaurants and more—all assisting Havana’s pursuit to be a destination for visitors seeking a scenic trip to a historic town with a unique shopping experience. 

What’s Next?
This year, Havana is moving forward with the design and construction of the first phase of the downtown business corridor streetscape. This project, as shown on the conceptual plan, will replace sidewalks, improve parking and include natural landscaping, while maintaining the historic brick street surface. The $1 million-plus project, to be completed by the end of 2019, will provide the infrastructure and enhancements for continued growth in the downtown area. 

Phase 2 of the Havana Business Park will also be constructed in 2019, providing an additional 35 acres of shovel-ready development property. This property is being developed for commercial and light industrial facilities. 

An added benefit is the newly-established Opportunity Zone that covers the majority of Havana’s corporate limits. New federal legislation in 2017 created this tool to assist distressed areas and promote development through Opportunity Fund investments. The City is currently working with the Greater Peoria Economic Development Council and other agencies to explore this type of potential investment.

The Comprehensive Plan will also be updated in 2019 to ensure Havana continues to move forward based on recent trends and events. The updated Comprehensive Plan will explore the City’s options to continue its successful development efforts beyond 2021, when TIF 1 is set to expire. Planning has been an important component of Havana’s development efforts, and the future appears bright as they look for ways to build upon their current successes. iBi

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