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Mitigating Impacts on Local Institutions

Illinois

Photo of Building to be subsidized.

In Rockford, Illinois, the Illinois Department of Transportation (IDOT), the City of Rockford, and the Federal Highway Administration (FHWA) subsidized the construction of new buildings for five local institutions in the West State Street neighborhood. The subsidies ensured that these institutions could relocate from a highway improvement district and retain their ability to serve the community.

In 2003, IDOT, FHWA, and the City of Rockford came together to develop a plan to reconstruct 4 miles of West State Street (U.S. Business Route 20). West State Street is the main access road to Rockford's Central Business District. The reconstruction plan for West State Street included the addition of right and left turn lanes, a landscaped median, a multi-use path, bus turnouts, and additional traffic signals. In order to execute these improvements, IDOT and its partner agencies needed to acquire additional rights of way on both sides of the road.

Rockford's West State Street neighborhood is a low-income neighborhood with a predominantly minority population. To complete the reconstruction project, the partner agencies needed to relocate nearly 100 residential units, 20 businesses, and five local institutions within this community. The 5 local institutions included 4 churches and a minority-owned funeral home with over 3 decades of history in the community. These institutions relied heavily on support from their local parishioners and patrons, so they could not afford to move outside the neighborhood.

IDOT and the City of Rockford conducted an assessment of available buildings to see if they could purchase buildings for these five institutions within the neighborhood. The assessment revealed that there were no available buildings that could provide the requisite amount of space for the churches and funeral home in the immediate area. Without an intervention, these institutions would have to pay to construct new buildings in order to stay within the community. Fortunately, IDOT and the City of Rockford?s planners recognized that the value of the current buildings would not be sufficient to finance new construction and that a different approach would be necessary to save these facilities.

The partner agencies decided to provide additional financing beyond the requirements of the Uniform Relocation Act to finance new construction for all four churches and the funeral home. The financing method used was a Deferred Mortgage Option (DMO) using FHWA funds. Under the terms of DMO financing, FHWA would forgive all mortgage debts annually as long as the institution remained in the newly constructed building. The institutions would, therefore, not have to pay a mortgage as long as they remained within the local community.

The West State Street project shows how a combination of Federal, state, and local agencies can improve a transportation project through careful analysis of local conditions. Although the original project provided benefits such as a median park and multi-use path along West State Street, it did not initially recognize the needs of the entire community. Since project planners remained sensitive to arising community needs resulting from the right-of-way acquisition, the partner agencies were able to develop a satisfying solution. Ultimately, this project will give all the location-dependent community institutions along West State Street the ability to continue serving neighborhood residents.

For more information, contact Michael Hine, mike.hine@fhwa.dot.gov.

Updated: 07/11/2012
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