Editor's note: This is the tenth consecutive year that Springfield Business Journal has convened a panel of local business leaders to discuss the status and future of Springfield. This year's panel included: Frank Buraski, Buraski Builders; Kayla Edwards, Express Employment Professionals; Mitch Johnson, Memorial Health System; Jim Kuhar, Aspen Real Estate; Jim Lestikow, Hinshaw & Culbertson LLP and chairman of The Greater Springfield Chamber of Commerce; Brian Oaks, Prairie Capital Convention Center; Ken Page, Springfield Branch of NAACP; Steve Schoeffel, Victory Enterprises; and Jill Schuller, OMNI Communications. The discussion was moderated by the Springfield Business Journal staff: Brant Mackey, publisher; Bridget Ingebrigtsen, editor; and Joe Natale, senior correspondent.
The group met at the Hilton Garden Inn on Friday, May 9. Topics included the local economy, home construction, health care, tourism, the Q5 initiative, commercial real estate, diversity, employment, politics and marketing, among others. We invite our readers to share their thoughts on these issues as well. Please send your comments to:
info@springfieldbusinessjournal.com.
SBJ: Let's start with Frank. Buraski Builders has been in business since 1981; have you seen this kind of slowdown before, and when will there be a recovery?
Buraski: Our business has been growing steadily as the years have gone on. Actually, the last two years have been the best two years we've had in business. When it's going to change is when the media decides to change it. If you tell everybody prices are going to go down for another year, people are going to wait another year to buy a house.
SBJ: Do you do commercial and residential building?
Buraski: We do both. We try to diversify because (for example) right now, new home construction has slowed down but remodeling has picked up. It balances itself out a little. Even in the last two weeks, the phone has been ringing off the hook. For us, it already seems like it's starting to pick back up again.
SBJ: Is the cost of supplies going up?
Buraski: It's hard to lock in any prices now – lumber has been somewhat stable. Anything that has anything to do with oil – vinyl siding, roofing materials – that stuff goes up almost on a weekly basis. That's the toughest part.
Kuhar: I agree with Frank 100 percent. I'm in the real estate business. I specialize in commercial real estate but Aspen is a full-service real estate agency. The Springfield economy as far as housing is concerned is not as bad as the national media says. On the street, my biggest question is: "Is Springfield really doing as well as the ads say we are?" We are. It's down, like Frank said, from the past couple years, but it's not bad at all. If the national press would just not bang it so hard and be so harsh on us, people would be more eager to go out and look and buy. To counteract that, U.S. Today is going to have a feature article about Springfield and how we are bucking the trend nationally in the real estate business. Those are good things coming for Springfield, and we ought to be thankful for that.
SBJ: Have we been in the position before where we've seen the pricing of construction materials change on a weekly basis?
Buraski: Yes we have. Generally, it's every spring. As soon as building starts, prices start going up. It used to be, when I started in business, suppliers would hold the prices during the duration of a project. They would hold the prices until you were done. Then it was 30 days and now it's daily. They'll hold the price for today, and that's it.
SBJ: How do you compensate for that?
Buraski: To keep up with the competition, you just have to do the best that you can. You bid it based on what you think it's going to be based on your experience and you go with that. I don't think there is any builder who has in their contract that if prices go up, we're going to charge you more. We've never done that and we would never get a job if we did that. That's probably the toughest part of our job right now. We don't know what a project is going to cost when we get done based on the way things are going price-wise.
SBJ: Is the increase in construction materials mostly because of the price of oil as opposed to a natural disaster?
Buraski: Now it's based on the price of oil and gas. Everything is going up. Every letter we get states that because of the price of petroleum – and just about everything has petroleum in it, which is surprising – people are starting to charge delivery charges and gas surcharges. Anything that goes up, as we know, gets passed on to somebody. Right now it's us. When we start a project, we have to figure out where we are going to be at the end.
Page: What ranges of homes sell quicker or better?
Kuhar: The range right now that appears to be real, real strong is the $80,000-$125,000 market. Up to $250,000 is okay. The higher end – extreme higher end, which is custom – has a little bit of time on the selling (market). The overall market has gone from 103 days on the market to 141 days on the market. That's the (Capital Area Association of Realtors) average. It's still reasonable. Basically, it's the composite of five counties in which Sangamon is the key county.
SBJ: With the Illinois Department of Transportation moving an office to southern Illinois, there should be some houses going on the market if those employees decide to relocate. What do we know about that? Steve, do you have any links there?
Schoeffel: I don't know much more other than what we all read in the papers and the political blogs. The governor decided to move that particular office of IDOT out of Springfield, and there are a number of reasons why he says he is doing that. There are a number of reasons why the legislators in Springfield are saying he is doing it. On the surface, it doesn't seem to make a lot of sense because they say they're moving it to the community of Benton, which doesn't have a facility for it, and they say it's all about price. Springfield comes back and says we have lots of space downtown at considerably less than this rented space that you can move into at any time. I don't know what's going to happen. It sounds like there is a review process that they have to go through with the legislature. Whether they can totally stop it or not, I'm not sure; but, they are going to have to go before a committee in the legislature and talk about why they are going to do it and justify it cost-wise.
SBJ: One report indicated that the governor was going to move the IDOT office downstate because Sangamon County doesn't support him. Does it help the governor in another part of the state to make that move whether or not we like it in Springfield?
Schoeffel: From my standpoint, it doesn't (help him) because his numbers down there are no better than they are here. His approval rating is unlike anything I've ever seen. His approval rating statewide is 13 percent. You go outside the Chicago metro area, it's below 10. At the height of George Ryan's trials and all that, his approval rating was higher than that.
SBJ: Is it logistically possible to impeach the governor?
Schoeffel: It's in the constitution; however, it says the House goes first and then it goes over to the Senate. The common consensus right now is if it gets thrown over to the Senate, then it's not going to go anywhere. (Senate) President (Emil) Jones is fairly supportive of the governor and is not going to let it go anywhere.
SBJ: Mitch, what about the medical district? Isn't the medical district waiting for a considerable amount of money to be released from the state?
Johnson: The Mid-Illinois Medical District has completed a grant application to the Illinois Department of Commerce and Economic Opportunity for one-time funding in the amount of $300,000. This is separate from the $300,000 per year funding appropriation for 10 years included in House Bill 2037 which was passed by the General Assembly in 2007, but subsequently vetoed by the governor along with other statewide projects totaling over $400 million. The Medical District Commission, our legislators and other community leaders will also continue to advocate for long-term funding appropriations. (Editor's note: The day after our discussion, Johnson shared an update on the $300,000 grant: "The DCEO grant I mentioned was NOT included in this year's appropriations after all, and DCEO has informed the District that it is unlikely that the $300,000 one-time grant will be forthcoming at this time.")
SBJ: Does the governor have considerable influence over funding for the medical district?
Johnson: The medical district is officially a commission that is part of state government, and any agency of the state is influenced by the governor. Rep. (Raymond) Poe and Sen. (Larry) Bomke were the ones who introduced the legislation. We've been frustrated because the medical district in Chicago that ours is really patterned after, started in the mid-'40s. It didn't really do much until the mid-'70s and then started progressing. But for years, either in the late '70s or early '80s, the state government appropriated about $1 million per year to that medical district to help hire staff, develop facilities, incubator facilities, which are facilities for entrepreneurs who had good ideas that they wanted to bring to market. We were really hopeful when this medical district was created, that we would get some percentage of that. We haven't had any appropriations to date. We received two grants totaling $300,000 to develop a master plan and a marketing plan for the district. That's the extent of the state support for our medical district.
SBJ: Didn't we hire somebody?
Johnson: Actually, the (Greater Springfield) chamber of commerce hired a person for their medical initiative, and that person will support the medical district, but he's not limited to the medical district. They'll support development throughout Sangamon County related to medical care. It's part of the Q5 initiative.
SBJ: Where are we with the medical district?
Johnson: There's a partnership with Q5 and the chamber to promote growth and not let the lack of state appropriations slow us down. This new director will help implement the marketing plan that we created. The district has an office now located at Lincoln Land Community College Center on Mason Street. They are beginning to reach out to potential companies in the medical-device and research sector to come to the local area. I want to make a point here that everyone's expectations are really high, and ours are, too, for the medical district. Realistically, the things that are being done will benefit our grandkids more than they will us. That's what happened in Chicago; that's what happened in the Texas medical district. It's a longer lead time than we would all like to think. The first thing we'll see are local developers moving into the area. There is a concentration of employees between the two hospitals, the medical school, the Prairie group and Springfield Clinic. There is a demand for all kinds of support services: more restaurants, hotels, dry cleaners, shops, more back-office space. We'll see more of that ancillary development initially; and it's a longer lead time to help the scientists at SIU to take their research ideas and help bring those to market. We've had consultants in from other medical districts that have done that – recently one from New Mexico that was head of an incubator facility, which could bring innovative medically related ideas and devices to market. She made the same point to us that this is something that everyone has high expectations for. The media is very interested in reporting on new developments, technology and new research, cancer research and so on. But, it's tough; it's a high risk kind of venture.
SBJ: A couple of years ago at a medical conference, it was said we had to hire 80 doctors in the next few years. Springfield Clinic has been hiring about two dozen doctors a year. We've seen phenomenal growth while at the same time there seems to be layoffs at the hospitals, which may be attributed to outsourcing. Is that true?
Johnson: That's true. Actually, we're growing in terms of our employment and most of our utilization. One thing people don't realize about the Springfield medical community is that we serve, especially for overnight in-patients, over half of our patients come from outside of Sangamon County. They come as far away as Quincy, Bellville, Danville, and as far north as Bloomington and Streator. From calendar year '06 through calendar year '07, we've seen almost a 5 percent growth in the number of patients that were admitted to the two hospitals in Springfield. The medical school has plans to add something like 50 physicians over the next couple years and Springfield Clinic's new addition they said will add 40 physicians over the next two or three years – not all in that building but moving some around. We outsource our security department to Securitas, and all our former employees either kept their jobs with Securitas or took another job with Memorial.
SBJ: Kayla, you're involved in personnel. What do you see happening on the medical side?
Edwards: We do quite a bit in the medical field. Something that has changed recently is the addition of technology. Adding new technology has actually boosted the need for more people. Although that is short-term, we've had an up-tick in the number of people that we've been sending to Memorial with the conversion of electronic medical records. As that transition happens, they have a need for more people, not less. They might have fewer needs after they convert, which is the idea for going to electronic medical records but in the interim it's created more need for people. We're also seeing more need for people in housekeeping and laundry, as a result of what Mitch said. The overall people they have at the hospital does create the need for extra staff to support the additional patients.
SBJ: Does Springfield have those people?
Edwards: Yes. At Express, we have more open jobs right now than we've had in the last year. It might be a surprise, but usually the temporary help business/contingent workforce business is a great predictor of things to come; but, we have more openings now especially for those general skills types of positions. Finding dependable, reliable help is getting more difficult. We have a number of openings in that $10, $11, $12 range.
SBJ: What is the unemployment rate in Springfield right now?
Edwards: Right about 5 percent. It's 4.9 in the county and 5 in Springfield. The state's is 5.5. Springfield is doing better than the state.
Johnson: I want to pick up on one thing that Kayla said. Part of the medical district is to promote the growth of existing employers, and another part is to bring in new employers. All of us realize the real engines of growth here is existing providers care. There is a lot of pent-up demand to modernize facilities that have cores that were built back in the '60s. I think there is going to be a lot of construction on both hospital campuses in the next few years, in addition to all the ancillary construction I talked about. The technology is driving a lot of it. We're doing three major projects, but they're being done inside the four walls of existing facilities –upgrading technology, imaging and x-ray.
SBJ: How far into the future does the hospital plan?
Johnson: We have very concrete one- and three-year plans. We're working now on updating our master campus plan that's five to 10 years. It gets pretty murky out past five years.
SBJ: The medical district is close to the downtown area, and Brian and Jill are located in that area. In the past few years, we've seen the opening of the Abraham Lincoln Museum and Library. Was it everything we expected it to be?
Schuller: It has done a lot to raise the awareness of Springfield as a destination point. It has done a lot to even raise the perceptions locally of what this city has. I have heard things from some of the retailers in the downtown plaza area that they have not necessarily gotten as much spillover from the museum as they had hoped for originally. Part of that is because of how incredible the museum is and when people are there, they are spending a significant amount of time to go through it, and they do not have time to add on to their trip. But, it has done a lot to improve the downtown area. There is still the question of how we can take those people who are visiting, and get them to other areas downtown and support those markets down there.
SBJ: Brian, what do you think?
Oaks: I don't have much to add on top of what Jill said. Our businesses are fairly separate. We do no additional business from the presidential library and museum itself; although 2009 is the Lincoln Bicentennial. We're adding events for the bicentennial, so the presidential library adds another piece to the puzzle that makes Springfield the ultimate destination for Lincoln and for all sorts of history.
SBJ: On the image issue, we're going to get good national press on our real estate market and economy here and we have the medical district. Is the Lincoln Bicentennial an opportunity to market Springfield to businesses and companies to relocate here?
Schuller: You just hit on something, which is it's not just one area. We're not talking about just entertainment. We're talking about a lot of different things.
SBJ: Here's a place with a quality of life.
Schuller: Absolutely.
SBJ: Are we carrying that message?
Schuller: As a marketing person, I would say I don't see a lot of that yet; but I have to believe we have a fairly active Springfield Tourism and Visitors Bureau that does a lot of that, and the chamber as well. We're (OMNI) not directly involved in that with the clients that we have, but it would be great to see more of that as a business initiative as people are out seeking companies to come here and look at Springfield. That is certainly a benefit that I would want to promote.
Johnson: I know there is a lot of planning going on behind the scenes – committees looking at how we can maximize the impact. I've heard the eyes of the world are going to be on Springfield, and it's not going to be just the day, the week or the month, but all of 2009. It's a real opportunity to put our best foot forward.
SBJ: Let's talk about the city of Springfield. Is our mayor (Tim Davlin) going to run again, Steve?
Schoeffel: I don't know.
SBJ: There are rumors about him running for a statewide office.
Schoeffel: There has, but it's pretty early to figure out who is going to run in 2010 statewide in Illinois. To predict where he will be two or three years down the road is pretty tough at this point.
SBJ: We heard $38 million for infrastructure (Q5 study). Jim, in your position is infrastructure an issue for businesses looking at Springfield?
Kuhar: It's always an issue. It's a major issue. It's one of the reasons why a lot of businesses pass over Springfield. We can't offer – because of infrastructure – amenities that other cities can offer. It's not something that has happened during Mayor Davlin's watch. It's gone on for quite some time, and it continues. The thing that makes it so very, very difficult in that situation is infrastructure is not something you can catch up on in a year, three years or five years. It's a long-term commitment with significant amount of tax dollars. Springfield is the state capital and has the burden of the homeowners paying the lion's share of real estate taxes because there are so many exempt government buildings. That is costly to mount an effort infrastructure-wise to accomplish some of those needs. The burden of infrastructure now, and has been, on the developer, and that makes it a very costly proposition. We have a Q5 chamber, builders association and Capital Area Association of Realtors committee who have done a great job of reviewing and redoing the builder/developer agreement with the city of Springfield. What it's going to accomplish, hopefully – and I think they will; they've done an incredible job with this – is level the playing field. At least a company that is coming into Springfield knows what set of rules are out there and how things have to be in order to move forward. That is a major step, but the funding is key and it's tough because it doesn't exist right now.
Schuller: There is a lot of concern that we don't have the infrastructure to attract the right kind of businesses, but yet people are so impatient when they're told that it's going to take several years to do it; here's our plan to do it, but it will take a long time. That's the sense I get. It's our society or culture that wants this immediate gratification, but they don't understand it's going to cost and it's going to take time. The results will pay off in the long-term. What you said, Mitch, is true: this is not necessarily for us to reap the benefits immediately, but our children and grandchildren will. We don't always look at it that way. Our society wants it right now, but it can't happen right now.
Kuhar: A lot of this is because elections happen every two, four, six years. Regardless if it's municipal, state government or federal government, you have somebody who wants to do the right thing, but has to be elected in two years. That's very, very difficult for someone to say, "If I do this I'm not going to get re-elected." Can you muster the people – the vote – with your counterparts to do that? It's a very difficult thing.
SBJ: Infrastructure isn't sexy.
Kuhar: No.
Johnson: I was following the Q5 initiative, too. The committees that did the work did a very thorough job. They were headed up by really good people who volunteered a lot of time. Some of those committees met two or three times a week. Yet, when they presented their numbers they were the basically the messengers that got shot, and nobody wants to hear what the number is. At the same time, things like the fairgrounds happen. How could that happen? How could we let the infrastructure at the fairgrounds go? Who was asleep at the switch?
Oaks: Another issue the city council faces is multiple tasks in terms of funding. The pension funding I hear is much larger than the infrastructure funding, but it's mandated. It has to be done. Infrastructure doesn't have to be done until it "breaks," which is the situation that happened at the fairgrounds. The pension funding is something that has to be addressed by state law.
Page: When I first moved here, one thing that was commonly said was that Springfield did not want blue-collar industry, and it is still said they want white-collar industry in the city of Springfield. That is something that is commonly said about Springfield, and another thing I look at is how Springfield plans its growth. We have a lot of sprawl in this city; therefore, the infrastructure in the inner part of the city is lacking because everything moves out from the city. The businesses Springfield has are moving in a certain direction; therefore, there's no need to maintain those areas because they're not there. Stores and streets and sidewalks are in disrepair because nobody is there to deal with them. That's the way Springfield has planned its growth. I don't know how much builders have influence, and if there are any true green builders in the city, that look at the adaptive re-use of brownfields versus using greenfields. You look at MacArthur. That's the starting of a true brownfield. We're just watching it go that way.
Buraski: Everything is driven by money. All the newer areas being developed are being developed further out because it's less expensive. The closer it is to downtown, the more it costs. When people look at space, they're looking at how much per square foot. It would be nice if the city or somebody could come up with a plan that would help builders. I would love to do something closer to downtown, but I just can't afford to do it. It all comes down to money. There needs to be some sort of a plan that would benefit or help people develop closer and in-fill.
SBJ: Frank, didn't your son (Jason) son rehab a building downtown?
Buraski: Yes, he did, and we're looking at other buildings. The problem – again, downtown – the TIF district. The city gives money to fix up the building. The problem we notice is the people selling the building add that to the cost. So if the building's worth $200,000 and the city is going to give $100,000 to help develop it, they add $100,000 to the price of the building. So the people who benefit from the TIF seem to be the people who are selling it, not the people buying it. The TIF money is running out in seven or eight years. Before, when people were buying them at inflated prices, and they do that now, in seven years from now they are going to be stuck with buildings that aren't worth the amount of money they paid for them because that money was figured in. The city is trying, and downtown looks really nice, but sometimes the wrong people have benefited.
SBJ: Wouldn't the demand of people wanting to live downtown help create a situation where it is necessary to address the downtown infrastructure?
Kuhar: Last night (May 8) they had the upper-story tour downtown. If anyone here has seen those condos, they really have spent effort, time, money, thought in redoing and rehabbing some of the older buildings. If you have not done it, I would encourage everyone to do it. People coming into Springfield from Chicago understand the second, third story loft/condo concept. People in Springfield – let's face it – park at the front door and walk in. (Laughter) If they're two rows away then you're going to circle five times to get that parking place by the front door. (Laughter) It's just a different mentality. That's changing. I'm sure it's going to be very positive, but it's not going to happen overnight. The former YWCA is going to be rehabbed and restored and made into condos it looks like, at least that's their intent now. The people who built the condos on Fourth and Washington/ Fourth and Adams – in the middle of the block there, are the ones who acquired the YWCA. That's a positive. It's happened on Seventh Street. Like Frank said, there's an interest there; but, the going price right now is pretty stiff when you have to spend an awful lot of money once you get there. When you're rehabbing buildings, you never know what's inside the wall until you tear a hole in it.
Buraski: My son just leased his. Once he put it up for lease, he had calls everyday, all day long. The interest is there, definitely; it's just the cost of doing it. We would love to do more of that downtown, it's just the cost of getting in there and what you have to do. They all need new plumbing, new electrical, new roofs. The buildings have been let go for so long. They need a lot of work.
Page: When you're looking at that whole issue of bringing industry into city of Springfield, and even the state of Illinois, the Department of Commerce and Economic Opportunity has a database that lists all the properties in the state. You should check that database. It lists the properties, the square footage, the infrastructure, everything about it, the location, the amenities and what's attractive about it. It goes into that holistic thing because it has a lot to do when people call and say, "I'm coming to Illinois and I have this, and this, and this, and this is what I want." That database has been there about five of six years, and it's very interesting if you want to see how Springfield is marketed.
SBJ: Part of the infrastructure is the new power plant. The local branch of the NAACP was interested about minorities being on the job. Ken, could you address that issue?
Page: If you look at the power plant, that was a unique opportunity for the city of Springfield and Mayor Davlin's administration to change some of the perceptions of the city. That's another thing that people don't realize is that the perception of Springfield outside of Springfield – a lot of guys think it's really great because I live here and it's a great place to raise kids – but if you go outside of here, people will tell you what they think of it because they look at a lot of things. The power plant was a great opportunity for the city of Springfield to change a lot of things, even if it was just short-term. You don't build coal-fired power plants in this county that often because we deal with a lot of it, and being the environmental justice officer at EPA (Page's full-time position), that's one thing I had to go through because of the Sierra Club and their complaints. You just don't build coal-fired power plants in the state of Illinois – in this country – because that's something the environmental groups say is a no-no. That's why when the Sierra Club came in they put on a lot of conditions, additional controls and things like that so you will have less coming out of the smoke stack. It's difficult to build a coal-fired power plant, especially in somewhat of an urban area. This was in the works for a very long time. This didn't pop up like two years ago because the city had to go through a lot just to have a public hearing on it. I thought it was a great opportunity for the city to change a lot of their perceptions because they were not hiring African-Americans. I brought it up during my first term as president of the NAACP because I knew about it through the permitting process. You could write into your request for proposals that you could hire so many, and that is done on every level if you really want to do that and really want to see change. Lo and behold, the RFP was let, and it was not in there. Therefore, when KBB bid on the project, there was nothing to hold their feet to the fire to say that you have to hire a certain percentage, which was unfortunate. Now, they went back and made some changes themselves. The city could not hold them to that, and the city lost on that, and went to the unions and said we'll try to work. They were trying. When KBB sent out the requests that we wanted so many electricians, they added in there that we wanted African-Americans, we wanted minorities, we wanted women. They had it in there. It was just the lack of planning before you got to the process, and then trying to plan it when you've started the process, which is literally impossible to do. So, that did not happen. It would have been a great opportunity, especially the power plant because that's going to take many years to complete. That's a great opportunity for people to work out there.
SBJ: You mentioned the perception of Springfield. What is the perception of Springfield?
Page: This year is the 100th anniversary of the 1908 Race Riot. I'm part of the Lincoln Bicentennial Committee in Springfield, as well as in the state. They need to bring in economic development to see how to piggy-back on that because we're looking at other places Lincoln was, like Kentucky and everything. The perception of the city of Springfield is there are a lot of racial issues, and there has been great progress in the city of Springfield. I was not born or raised or educated in the city of Springfield. I came from Selma, Ala., and attended the University of Alabama and I moved here, but it is very different from other small places that I've been. People notice that. Now that the administration has changed, you have a lot of urban people coming into the city. I don't think people realize that. We discussed it at the Governor's Prayer Breakfast. We don't have as many state employees anymore, but you have a lot of urban people coming into the city from Chicago. They are very young and urban and they are used to things like that, so they're very different. What is happening with what they're doing with those apartments downtown, and hopefully they sell them, is those people in state government are allowed to come and go. It's very different now. They come and go a couple of days a week and then they go back and they stay in Chicago, where it used to be you had to move to Springfield if you want a state job. So, that atmosphere has changed tremendously. The perception – whether deserved or not – is there are a lot of race relations. It goes way back, and it's not good. I wish we could get beyond that issue, especially when you have a federal consent decree to hire more African-Americans on the fire and police departments, and that has not happened. People know that; people know that in Chicago; people now it outside of the city. Industry looks at that, too. You look at a lot of the larger industries and some of their top executives are African-Americans. It's the whole thing with schools. I think the schools have done great, and hopefully (District 186 Superintendent) Dr. Milton will do great with the schools. That was a good step. This is an opportunity: the year of reconciliation, in fact to do those things that show we have not relegated our minority population to the east side of Eleventh Street, and that invisible line. When they brought the architects in that were never in Springfield (part of RUDAT), it was really interesting because it really awakened a lot of people in the city because people who had no concept of this city came into this city. Nobody told them anything about it. You know what they did? They saw exactly how this city was broken up, and they said it. These were leaders in their fields, and they clearly said the city can't be a true city if you have these things in the city that divide it. It's cosmetic to take Capitol Avenue from the Capitol to Martin Luther King Drive, which is very symbolic to do that. We're going to make it one. We're going to connect it to say that it doesn't stop at Eleventh Street, and people who live here – African-Americans – will tell you that invisible line still exists today, which blows my mind. People will still say that and people will still not cross Eleventh Street unless they're going to the mall or something, or people going to work and they have to go back. I think the city can change that.
SBJ: You mentioned brownfields and greenfields; what do you think about moving the high school to the west side?
Page: I'm not a tree hugger. I like trees. (Laughter) I have a couple of dogwoods I have to put in the ground. That's a beautiful school; the façade of it is beautiful. I did propose that question of why not trying to acquire everything within a couple of blocks of that school. You have a lot of property there. I'm sure someone will sell those properties. Some of it is rental property and things like that. You would be moving Springfield High School to an area where it will abut New Berlin, Pleasant Plains and Chatham school districts. There's no further growth for that school. You can't grow anywhere because the growth around it is other school districts. I know space is needed. It's beautiful architecture that school. When I moved here people told me about the theaters they had downtown, and it just blew my mind. People still say that to this day the things they just bulldozed down. They do need space. It's just that sprawl, climate change, buses are going to have to go farther, you're going to have to have more buses to take kids out there.
SBJ: The school district would still use the building.
Page: For an administration building, yes.
Lestikow: To tie into what Ken was saying about diversity, when the chamber implemented the Quantum Growth partnership, one of the five areas that we knew we had to work on was the diversity component. We're not going to attract the kinds of businesses we want, and we are not going to make Springfield the community we want it to be without addressing diversity. Luckily, there was a group called the Springfield Project. Tim Rowles is the executive director. It's a 501(c)3 corporation that was organized to do almost exactly what our diversity component action plan called for, which so far has included working on a micro-loan program from new and existing businesses, a small loan that they couldn't get through traditional financing. That will make a difference in the operation of that business. We're working with the University of Illinois in Champaign and the Lee Carey Neighborhood Association. The intent there is, within the boundaries of the association, they are looking architecturally and from a development perspective to try to redevelop portions of that neighborhood as commercial enterprise, get rid of some of those boarded- up homes and construct new housing. We have a diversity development council that meets regularly. For the first time that I have been here since 1973 – I'm not a lifelong resident, but I have pretty good tenure – there is a focus from the entire community, as well as the Q5 effort, a recognition that this has to change. 2008 is a great year to start with the race riot (commemoration).
SBJ: Ken, you wrote an interesting thing on your Web site…
Page: Uh-oh, that's not good. (Laughter)
SBJ: You wrote that people call it the race riot, but your point was it was a white riot. The perception is it was black people rioting but it was white people rioting.
Page: When you use the words "race riots," it's like inner city riots and stuff. But actually, that was not the case in 1908. It was very different. I put that in there because one of our NAACP members – she (Vesta Victoria Meek Nichols) died at 89 and she was a member since birth – she told me to tell that story. I told her I would do that. Her father helped bring the chapter to Springfield. He was part of that whole thing and shared that with them as kids. Her father said they had absolutely nothing to do with it. They tried to protect themselves and their property. It was mobs that did that to them. It was not a race riot; it was some whites in the city rioting against them. I put that in there for Ms. Nichols.
Edwards: Is a reason for promoting the race riots this year for healing? I didn't know about the race riots until someone came and spoke to my Rotary group. Certainly you want to know as much as you can about the history of your city. Do you believe the perception outside of the city will be positive as we are promoting it and educating people to the point where as we talked about drawing new businesses to the city? Do you think it will help or it will hurt?
Page: I think it will help. You look at other areas: Tulsa had rioting. What happened in Springfield is it was kept under wraps for so long. A lot of people lived here, and never knew anything about it. The schools never touched it. While commemorating the 100-year anniversary and looking at where we were and where we are now, we can look at what we can do to change. We have the Q5 and we have been members since its inception. I'm very happy. I want to make sure things work in the business sense. When you look at those other things in the city that are coming out of that commemoration – groups that are forming and everything – it's very positive for the city to say we are looking at what happened in the past, but we are also embracing our future to ensure that we're going to have a great future in this city. You look at where you come from. In a business sense, African-Americans in 1908 were very prosperous in the city. What happened in the anatomy of those riots and in the sociology of it was very scripted in how they carried that out. You lost a lot of black businesses at that time. You look at where we're at now and they were never able to rebuild. How do the city and the state work to make those changes? How do we as average citizens? If all of us around this table did just a little bit, it would be great for the city. It's already at the national level. People are discussing it. It's great we're going to have a monument to commemorate it. It was a long task – uphill to get it – dealing with the legislature. We're going to have a monument in Union Square Park – clearly visible to everyone who comes in. It will be part of the promotion of everything that's Lincoln. It's going to be right there. This year – in June – is the 150th anniversary of Lincoln's House Divided speech in the Hall of Representatives at the Old State Capitol. That's what catapulted him into stardom. It dealt with the issue of slavery. You look at all those things and how Springfield can say this is Lincoln, this is Lincoln's legacy and this is us as a city. Even though something bad happened, you have one of the greatest institutions in America – whether people like it or not – the NAACP came out of that. That's commonly known throughout the world. You look at every Web site that deals with it and it will say that it came out of Springfield, and a lot of people in Springfield never knew that.
SBJ: We've completed the first year of the five-year Q5 plan. On the diversity part of the plan, are we where we should be?
Lestikow: That part of our charge has taken the most time to get off the ground, but I think that's explainable. It's the least defined. You could study the infrastructure. Everybody knows what that means. You could try to make the workforce better with business education partnerships. A lot of these things had an easier definition of what we needed to do. The diversity part of the program is so all encompassing and it's so hard to decide what we can make a meaningful effort on with our resources and personnel. Obviously, you can't redevelop a quarter of the city of Springfield. That's why it's slower developing, but we're picking up on that.
SBJ: To go back to infrastructure, Q5 reported what needed to be done and then seemed to back down a little bit. Will the chamber come out and endorse projects?
Lestikow: I'm glad you brought that up. I can understand that perception. What happened was after we presented this paper to the city council documenting the $37.9 million annual shortfall of needed spending, we started working with a committee of aldermen who said, "You got our attention." The next questions were: how do we pay for it and how do we prioritize projects? We were in the process of working on that at the same time the aldermen had to deal with the budget, which delayed things. They said, "Come up with revenue sources," and we came up with alternatives. One of those papers was leaked to the State Journal-Register and it made big headlines of how we were proposing a gas tax increase and a sales tax increase. In fact, those were two ideas that we thought were most linked to the user fee for people who use the infrastructure; and, maybe they should be a part, along with bonds and some other things for paying for it. That was one of eight or nine different funding scenarios that, frankly, we were just talking about. After all the furor, our conversations with the city kind of shifted to, "You know what, we need you to do other things. Chamber, we need you to help us educate the public more. Get some buy-in for this concept. We want you to be a part of prioritizing projects." We've been working with a committee of aldermen and others. We're getting near the point where we're going to start doing more on the public's perception of that, and trying to get feedback from the public. We think the way this needs to be approached is you need to show people what you're going to do, as well as show much it's going to cost. You can't do one without the other.
SBJ: Do you think it will ever go to a referendum?
Lestikow: That depends on the funding sources. It very well could.
SBJ: Recently, a business group from here went to Springfield, Mo., and the chamber there endorses candidates. Do you think the chamber here will do that?
Lestikow: Frankly, our plate is full with the normal chamber activities, plus the enhanced communication efforts we're doing to try to get people aware of what this city can be. That really hasn't come up since we went on that trip. They were much more proactive in the local political scene than our chamber.
SBJ: What is the status of the chamber office? Will it be moving?
Lestikow: The lease is up in 18 months. We're now actively exploring options. Do we stay there? Do we move? Do we buy some land and build? It's all on the table right now. There's no decision.
SBJ: You're not going to give us anything? You can tell us, we won't tell anybody. (Laughter)
SBJ: Steve, here's a political question. The recall amendment failed, but could voters use the call for a constitutional convention as a vehicle for recall?
Schoeffel: What I've seen so far in the polling statewide is it's pretty much an even issue on the surface without anybody doing anything. One side may have a couple percentage points lead over the other, and there's a huge chunk in the middle who is undecided on the whole thing. On recall going down, there is a renewed anger throughout the state among rank and file voters on what is going in Springfield as far as the capitol goes. Then you lump on top of that the new thing on the pay raise for the legislators and the governor. Some people don't realize that the pay raise also includes the governor. You have the makings of a revolt. With a constitutional convention on the ballot this fall, that's a wide-open vehicle for people to say, "Why not? It can't get any worse." Right now there are a number of business groups that have lined up in opposition; they haven't spent much money on it yet. There's a fairly significant business coalition that is already against it; the Civil Justice League, also. The Illinois Education Association is against it. It's a feeling that we're more comfortable with the devil we know. The other interesting aspect of all of this is (Barack) Obama being at the top of the ticket is going to generate possibly a huge turnout in Illinois; bigger than what we would usually have just over the excitement of having an Illinois candidate running for president. Also, if he somewhat generates energy toward something new, there's the whole throw-the-bums-out kind of feeling. If that happens, then it adds another dynamic to a constitutional convention because you have all these new voters – that don't necessarily have a stake or think they have much of a stake in what we have now – looking down the ballot at this constitutional convention vote, saying "Why not?" It will be interesting to see how this plays out. Potentially, there's a lot of money lining up against it right now, but if it all takes is one big group like the trial lawyers to be for it because they like to open things up to play around, then you'll have a real battle. You have all these other dynamics at the same time and it can be a real free-for-all in the fall.
Schuller: Call it advertising or call it public education, it's a huge issue to educate the general public on what it means. At first blush, when people take their usual two-second look at a blog and then move on, the public may say – like Steve said – "throw the bums out." "Let's start something new." There are bigger issues to look at. We were at an Illinois Society of Executives meeting about 12 months ago, and there was a lobbyist speaking about pros and cons of the issue, just to explain that when you do this, there are these kinds of issues that no one considers. There is a bigger issue here that the general public should know as far as what (a constitutional convention) means. It's not just getting rid of the bad legislators they don't like.
Schoeffel: Some of us in this room would consider ourselves insiders in government, and we don't even know what it would mean to mess around with the constitution and have one of these conventions. What could be done? What could potentially be allowed or not allowed? There's only a handful of people in the state of Illinois that would know what would happen.
Schuller: But it does affect us both statewide and locally; we're talking about the business issues, and those would have to be considered.
Schoeffel: Businesses in the state, in general, feel so backed into a corner right now.
SBJ: Don't we have exceptionally high voter turnout in Sangamon County?
Schoeffel: Generally, voter turnout will be 50-65 percent in a presidential race. Sangamon County turnout is generally over 70 percent. While statewide there may be a huge turnout because of Obama on the ballot, it won't be as drastic in Sangamon County because it already has such a high turnout.
To read more of the 2008 Corporate Review panel discussion, see the June issue of Springfield Business Journal.
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