Development Fee Assessment

SB Friedman led the strategic work for the creation of two development fees that would facilitate business growth within an underutilized industrial corridor in Chicago. We then conducted market and financial feasibility analyses to estimate fee generation and calibrate fee formulas.

The North Branch Industrial Corridor, which is located adjacent to Chicago’s desirable Lincoln Park and Bucktown neighborhoods, has faced redevelopment pressures for decades. Recognizing the importance of the industrial corridor system in supporting middle income jobs and that the corridor no longer meets the needs of modern industrial users, the City sought to implement a mechanism to allow land use changes within the corridor while facilitating industrial development elsewhere in the City.

SB Friedman was engaged by the City to evaluate different development fee-based mechanisms to allow the desired land use changes. Our work included:

  • Identifying precedents and conducting case study research into fee structures implemented in other cities;
  • Collaborating with the City to formulate a fee structure and establish a nexus/rationale for the fee that would be legally defensible;
  • Evaluating the market demand for non-industrial uses based on historical trends and the development capacity of vacant underutilized sites;
  • Preparing financial feasibility models to evaluate the impact of proposed development fees on project feasibility; and
  • Calibrating fee formulas based on projected fee generation and proposed capital improvements which would be funded through fee collection. 

Our work resulted in the implementation of two fees. The first fee is meant to fund physical improvements within the corridor that would facilitate redevelopment, while the second fee is meant to mitigate the impact of losing industrial land in the corridor by investing in industrial areas elsewhere in the City.

Results: The fees were incorporated into the City’s North Branch Framework Plan, including an Industrial Corridor System Fund, a Neighborhood Opportunity Bonus and a North Branch Bonus.


Image Source: City of Chicago