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Lingering Recession Hits Glenview Residents; Businesses

Property values are down, foreclosures are up and people who used to make $500k are at the food pantry.

Lingering Recession Hits Glenview Residents; Businesses Lingering Recession Hits Glenview Residents; Businesses Lingering Recession Hits Glenview Residents; Businesses Lingering Recession Hits Glenview Residents; Businesses

While an economic think tank declared the U.S. recession ended in June 2009, it doesn't seem as if that happy recovery has hit Glenview yet.

The National Bureau of Economic Research, a Massachusetts-based nonprofit organization which asks economists to crunch data, declared the recession ended and a modest economic expansion began 16 months ago.

With Glenview's tony shops and palatial homes, the impact of the recent recession and lingering economic downturn may not be readily apparent to all. And while it's true the area's wealth and prosperity have served a buffer thus far, the depth and length of the economic crisis has taken its toll – on property values, on sales at local shops, and on its residents, who are increasingly prone to foreclosure and bankruptcy.

The local food pantry reports it is helping more than 600 families, including some who held $500,000 jobs just a few years ago. With sales tax receipts down, local government is having its own struggles, facing a $2.3 million budget shortfall next year that is expected to grow to $3 million by 2013.

The Village of Glenview Budget

At a Sept. 1 public workshop, the Village Board trustees made it clear they would prefer spending cuts to a tax increase as a way to plug its looming budget holes.

The Village is projecting a savings of $819,000 through changes this past year that included staff reductions, outsourcing much of its snow removal and partnering with neighboring towns in contracting services including tree trimming and street sweeping.

"Going forward, we're going to look at doing more multi-government partnering to get better prices on our contracts," said Janet Spector-Bishop, communications director for the village.

The board also expects to bring in $225,000 in new revenue from cell tower leases, a new contract to provide 911 dispatch services for Hainesville, and a decision to open the police station firing range to the public.

But those savings and new revenues have not been enough to balance the budget in lean recession times. One source of revenue, sales tax collections, is projected to be nearly $1.5 million off the 2007 pre-recession numbers, though up $200,000 from last year's low. Cuts to village services, dipping into reserves, further privatization and consolidation and finding new revenues are all on the table.

The board continues its public budget meetings Monday to look at planned capital improvements and will meet Oct. 28 to look at spending in the operating budget. After a Nov. 9 meeting on water and sewer funds, the budget workshop wraps up Nov. 16.

Property Values are Down, Foreclosures are Up

Between 2005 and 2007, there wasn't a single home foreclosure in all of Glenview, according to statistics held by the North Shore Board of Realtors. Currently, there are 73, representing 12 percent of all homes, said Mike Gazdzik, the board's information technology manager. Glenview's foreclosure average is lower than the 23 percent of North Shore homes overall and better still than the 30 to 33 percent nationally, Gazdzik said.

But that is cold comfort to an increasingly desperate set of homeowners, many of whom bought their properties as an asset and investment. Property values in Glenview are down, with average and median homes selling at 25 to 30 percent lower, Gazdzik said.

"Not only is it affecting people with homes, the price at which they are being sold; it's also affecting people's jobs," he said.

Northern Illinois used to have more than 60,000 real estate agents, according to North Shore's statistics. Not there are between 36,000 and 37,000.

"The one area of real estate that has grown, if you want to go there, is short sales and foreclosures."

A short sale is when a homeowner sells a property at a loss, with the permission of the bank, which agrees to accept the lowered price. Between 2005 and 2007, there were three short sales in Glenview. There have been 116 since the start of 2008, with 61 this year alone. The most expensive short-sold home was $2,000,000 and the least expensive was $66,000.

"It's all over the market, Gazdzik said, "It's not hitting just one income bracket."

Food Pantry Sees an Increase in Need – and Frightened New Faces

Before the effects of the recession were felt, in November of 2007, the Northfield Township Food Pantry was serving 345 families, the majority of them chronically poor.

The most recent statistics show an 80 percent increase in demand, with 620 families eligible to use the pantry, which provides basic food staples and other types of emergency assistance to income-eligible residents. Many of the faces are new, said pantry community coordinator Gayle Zalatoras.

"We're seeing people come in who don't know how to sign up for public assistance and for them it can be intimidating, scary, and embarrassing," Zalatoras said. "We try to make it as quick and easy to use as possible so they don't run the risk of people maybe seeing them."

Miguel Nunez, a pantry counselor who works more directly with those in need, said in the past year he's met with people who used to make $500,000 per year or $250,000 per year and owned expensive properties.

"Now they have been unemployed two, three, four years and they have used all their resources, saving and retirement accounts," Nunez said. "These are people who were doing the right thing and accumulating resources and now they are coming to us."

It's not uncommon for them to break down and cry in the office, he said.

"You can tell they have been thinking about coming here for awhile," Nunez said. "But there is no assistance program that will pay a $5,000 mortgage.

Bankruptcies are Up, Particularly "Wage-Earner," or Chapter 13 Filings

As the recession has lingered on, more and more Americans are turning to bankruptcy as a way to clear their debts, including those in Glenview.

There were approximately 35,000 bankruptcies in Cook County in 2007 before the recession hit and between 60,000 and 65,000 are anticipated this year, said Ben Schneider, a bankruptcy attorney serving Glenview.

Much of the growth in bankruptcies is in Chapter 13 bankruptcies, also known as "wage earner" bankruptcies and the type most often favored by the wealthy, Schneider said.

"We are starting to see a lot of Chapter 13 filings by people who find themselves unable to afford the lifestyle they are used to," Schneider said, identifying two primary scenarios that are driving people to bankruptcy.

People who have lost incomes are choosing to pay credit card companies, which are more aggressive about collections, rather than their mortgages. Then they get behind on their mortgages and are faced with foreclosure.

Schneider said additional foreclosures are created when bank employees "dangle a carrot" telling people they might be able to get a modified mortgage – but only after they miss a couple of payments.

"Nobody takes the money they were supposed to be spending on their house payment and saves it," Schneider said, estimating that only one in ten mortgage modifications actually come through and those missed payments lead to foreclosure.

People who file for bankruptcy often are permitted to keep their primary residence.

"That is why we are seeing higher income people filing for bankruptcy," he said.

 Commercial Occupancy Rates are Down, but Some Businesses are Still Moving In

All it takes is a drive down Waukegan Rd. to see that vacant commercial property rates are up in Glenview, peaking at 7.2 percent  in the first two quarters of this year.

But it could be much worse, said Ellen Dean, economic development coordinator for the Village.

"For the most part, Glenview has fared very well with vacancy rates," Dean said. "Our businesses are established enough that they have been strong enough to hold on."

Long-time business Best Hardware closed, she said, but that was as much a function of increased competition from big box retailers such as Home Depot.

"The recession was the straw that broke the camel's back," Dean said.

The Glen Town Center mall has held a 92 to 93 percent occupancy rate through the recession, she said.

"We haven't had a drastic reduction in business," she said.

It has been a difficult climate for consultants, said Paul Niskasen, whose engineering consulting business has flagged.

"I have lots of friends in the business and it's been a struggle for a lot of people," Niskasen said. "Not just in engineering consulting but all consulting businesses. Consultants are easy to eliminate when you're trying to keep your payroll down."

Also in the mix, Niskasen chose an inopportune time to open another business, PromoResource, which creates promotional products.

"I opened it in the fall of 2008, of all things," he said. "The last two years have been pretty slow."

Another new business in Glenview has been thriving, the Arthur Murray Dance Studio which moved from its decades-long locale in Morton Grove to be closer to many of its students. It opened April 1 of this year on Waukegan Rd.

"Business is great and we are growing and thriving in this new community we love," said Elise Wise, a counselor at the studio.

Business did "plateau" for a while, but it is now growing, Wise said, and the studio now has more than 100 active students.

"People have a need to feel good and be present in the moment and do something physical."

She said dancing is not only recession proof, it's Great Depression proof, noting that Arthur Murray started 98 years ago.

"I feel like we are in a beautiful dance bubble where we are unaffected by the economy," Wise said.

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