Last week in Rock Island, a crowd gathered for the announcement of a new housing development: Highland Place. It's a small project, but it's drawing a lot of attention as what is hoped to be the first of many new housing developments in Moline and Rock Island.

With only 32 housing units - 15 condos and 17 single-family homes - it's a modest subdivision. But it's important symbolically, a project meant to show that there is interest in new housing in the Illinois Quad Cities.

Housing is "a high priority for us," said Rick Baker, president and CEO of the Illinois Quad City Chamber of Commerce. "A lot of growth in the community follows housing." Baker points to rapid commercial and residential development along 53rd Street in Davenport near Interstate 74. There's been no analogous commercial or residential boom in the Illinois Quad Cities.

Getting housing growth in the Illinois Quad Cities has been a major challenge, and that's why Highland Place is so significant. The southwest Rock Island plan was finished in December 2000, and the city has for the past few years listed the development of new housing subdivisions in that part of the city as its highest priority. It's taken nearly three years to get one off the drawing board and under construction.

"It's been a long time coming," said Rock Island Mayor Mark Schwiebert. The southwest part of the city is "our area of growth." That's because it already has easy access to northern Rock Island thanks to its proximity to the Rock Island Parkway - which runs north and east into downtown and eventually Moline. Southwest Rock Island is seen as a hub for future commercial, industrial, and residential development. The city is undertaking road improvements, landscaping, and signage to make the parkway more attractive, and is also working on bike and walking trails in that part of the city.

Highland Place is east of the Centennial Expressway/Rock Island Parkway, about three-quarters of a mile south of Andalusia Road (where 92 breaks off from the expressway and goes west). The condos will sell for between $180,000 and $300,000, while the housing lots will range from $31,400 to $47,900. The subdivision will be in the Rockridge School District and is close to the Highland Springs Golf Course.

Of the project's 22 acres, just more than half will be used for housing lots. "The rest will be left in its natural state," said Jim Hass of Valley Group, one of three partners in Highland Place developer HMV L.L.C. The others are engineering firm Missman Stanley Associates and condo developer Gary Hodge Incorporated.

Hass, who was on the steering committee that helped devise the southwest Rock Island plan, said recent efforts to implement to plan have focused on finding "a place to begin, and a project to begin with." He said in an interview that the project is small in scale, meant to "demonstrate the viability of that area.

"I think by the end of the week we'll have 10 lots sold," he said. "To me that's a sign there's pent-up demand."

That's a bold claim for such a small development, but the developers and the city certainly seem encouraged by the response to Highland Place. The project is risky because of its "conservation style" - meaning that the pond and many of the trees already on the property are going to remain. That reduces the amount of land available for housing, which means the project is less attractive to developers. (There's a similar issue with Davenport's proposed Prairie Crossing development. The lower density of housing has made developers hesitant to support it.)

But that element is something Rock Island is clearly proud of. Schwiebert said Highland Crossing is "the first of this type of project in the Quad Cities."

One of the city's goals with its southwest Rock Island plan was to incorporate the area's topography - its rolling hills, streams, and wooded areas - into the subdivisions, said Greg Champagne, Rock Island's director of community and economic development.

The uneven land makes it more expensive to build in southwest Rock Island. "This is pretty," Baker said, "but it's hard to develop."

The city is acknowledging that with an incentive package. Rock Island is putting up approximately $1 million for the Highland Place development - $500,000 to extend water and sewer mains to the site, and $565,000 for infrastructure internal to the site, Champagne said.

He added that the city will get some of its money back, with the amount tied to how quickly the project moves forward. If 90 percent of the 32 lots sell within four years, the city will receive $125,000 from the developers. If a lower percentage sells, the amount the city gets back will be less. "The more successful the subdivision, the more the city gets paid back," he said. In other words, the city will subsidize the project less if the market for the subdivision proves strong. Champagne also noted that the city is using gaming revenues to support the project, not property taxes.

Other incentives include extending the city's enterprise zone, which means that construction materials will qualify for a sales-tax exemption. Hass said that will save between $5,000 and $7,000 per housing unit. In addition, the city will rebate its portion of property taxes for three years. The Rockridge school district might do the same.

The lot costs are also lower than in other parts of the Quad Cities. Hass said a lot similar to those in the Highland Place development would cost between $70,000 and $75,000 in Bettendorf - more than $20,000 more than the highest-priced lot in this subdivision.

Champagne said the city is supporting the project financially both because it's a high-priority city-council goal and because of the challenges of the project. "It's very difficult to get the economics to work" without a subsidy, he said.

This isn't the first housing project the city has supported financially. Three condo projects - 28 units in all - received $338,000 in forgivable loans for infrastructure, Champagne said.

Hass said he wasn't sure whether future projects in southwest Rock Island would need a similar subsidy level. "It's tough without them," he said. But "once you get the ball rolling, sometimes it rolls on its own."

The Bigger Picture

Highland Place is just one small part of a much larger economic-development picture. If cities want economic development, they've got to get new residents. But in the Illinois Quad Cities, population has been stagnant for two decades.

"In the past 20 years, the infill area has all been filled in," Hass said, leaving land in Rock Island and Moline that's challenging to develop.

According to the U.S. Census Bureau, population in Scott County grew 5.1 percent from 1990 to 2000. In Rock Island County during the same period, the population grew 0.4 percent.

"Housing is a huge issue for the Illinois Quad Cities," Baker said.

That's because housing development increases the property-tax base in a community, which in turn increases revenues to local government, schools, and other taxing bodies. And commercial development typically follows residential development.

"If you were making [business] decisions ... it makes it very difficult to meet [growth] goals if the population isn't growing," Baker said. And in this metropolitan area, "the growth that has occurred has been in the Iowa Quad Cities." He added that "it's important to keep both sides [of the Mississippi] strong."

Baker and Hass said that housing starts in the Iowa Quad Cities have traditionally outnumbered those in Illinois by a four-to-one margin.

That's already starting to change because of a handful of new subdivision in outlying areas of the Illinois Quad Cities. According to Ruhl & Ruhl, housing starts in the first six months on 2003 were 304 in Scott County and 144 in Rock Island County. "You get a lot of development in Bettendorf because it's cornfield after cornfield," said Mary Lagerblade, director of relocation for Mel Foster Company.

Champagne said the southwest Rock Island plan is designed to "capture a greater share of growth" in the Quad Cities. "We want to do that in a quality way."

The problem for Moline and Rock Island isn't that they're land-locked; they're river-locked. Moline has plenty of room to grow south of the Rock River; it's just that developers are hesitant to do projects on that land because of a lack of convenient throughways. And that affects southwestern Rock Island as well. Although the Rock Island Parkway provides speedy access to the riverfront and Rock Island's and Davenport's downtowns, it doesn't connect residents to the city's main commercial corridor.

The development of West Rock River Bridge might change that. The crossing, basically at the Moline/Rock Island border, would connect the Milan Beltway and the area south of the Rock River to the Blackhawk/John Deere Road commercial corridor where Target and Trinity are. As it is, people living south of the Rock River don't have access to that area without a long drive. And growth in Moline, Milan, and southwestern Rock Island has suffered. "People feel disconnected to the community," Baker said.

The West Rock River Bridge has been planned for 30 years, according to Baker. Funding was committed to the project in 1998 under Governor George Ryan's Illinois First program, and since then much of the environmental and engineering work has been completed.

But the project's currently tied up in red tape. Baker said bids for construction of the $45-million project were supposed to be let in August but weren't. He said he was hoping construction could get started this year, but that seems an unlikely prospect at this point. The Illinois Department of Transportation is now targeting November for bidding.

A lot is riding on that bridge. Moline's comprehensive plan shows new housing on the bluff overlooking the Quad City International Airport, for example.

"There's a lot of interest" in residential development on the Illinois side of the river, Baker said.

"When you see that bridge over the Rock River, you'll see a big shift," Lagerblade said.

Hass said he anticipates that Highland Place will be the first of several new Illinois housing projects for HMV. "Our hope would be that we could take the same group and move forward to something else," he said. "You have to start with something. ... All the services are here. We just need more people."

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