Aldermen approve city aid for Howard Street bar

Ward Eight owners Anne Carlson and Cody Modeer describe their plans to aldermen.
Evanston aldermen Monday night approved plans to provide city subsidies for a proposed wine bar and cocktail lounge in a city-owned building on Howard Street.
Only Alderman Don Wilson, 4th Ward, voted against the project and he objected only to portions of the complex deal.
The owners of the planned Ward Eight bar, Anne Carlson and Cody Modeer, said they hope to open for business by mid-July, if there are no delays.
But, in pressing for the council to suspend its rules to give the package of agreements immediate effect, Alderman Ann Rainey, 8th Ward, said she worried that if they weren't approved immediately, it would lead to substantial delays in completing the process of getting city and state liquor licenses approved for the establishment.
Rainey said criticism about why anyone would put a wine bar on Howard Street was ill-informed.
"People who live near Howard are just as capable of handling this type of entertainment as people who live downtown," Rainey said.
She argued that the building at 629-31 Howard was purchased by the city last year because it was deteriorated and provided no positive impact to the street or city.
She said the two apartments in the building aren't habitable now, but will be made livable by the rehab work the city plans to do on them.
Rainey claimed that the city will ultimately recover all but about $15,000 of the money it will put into the building, assuming the bar owners exercise the option contained in the deal to purchase the building from the city three years from now for a price of $362,650.
However that accounting ignores the below-market return on its investment the city will achieve during the intervening three years by allowing the bar to operate rent-free for the first year and to apply all of the money the owners pay in rent during years two and three as a downpayment toward the purchase. Those subsidies appear to add up to about $72,000.
Critics of the proposal have also noted the high failure rate for new restaurant businesses. An Ohio State University study several years ago indicated that 60 percent of restaurants fail within their first three years of operation.
Related story
City plans to subsidize new bar on Howard

Comments

Wonderful - Evanston aldermen are now venture capitalists

I hate to chime in with the other negative Nancys but everything here indicates the odds are greatly against this young couple.
The couple works at an Andersonville bar where Cody is the head bartender. It appears they have NO experience owning and operating a business, let alone a wine bar.
Look at the sketch. There are 8 bar stools, three small tables and three booths that could seat about 25 people. I am not an expert on wine bars for sure but right off the bat that seems like a small number of seating to turn a profit. 
This loan and lease deal to inexperienced and cash-limited owners in a questionable location sounds and smells like a sucker bet. I wonder if anyone else approached the city to open a restaurant or bar on Howard. If not, why? It's in a TIF District.
This couple will enjoy a $100,000 grant (free money) to upgrade the wine bar. I am uncomfortable when the city hands out these sweet incentives to unproven business owners, especially in light of the cityt's rejection last year of a proven and successful bar owner who wanted to open in the best location in downtown Evanston without government grants or loans! The only problem was our mayor and aldermen didn't approve of that bar's uniform.
This turn of events makes me queasy to think what the city is capable of doing with the other vacant and dilipidated buildings it spent hundreds of thousands of dollars buying. In my humble opinion, that is, based on history, TIFs work when new condos or apartments are built first and THEN businesses follow.
Here it seems the opposite is happening. The Howard Street TIF has been in existence for about 5-6 years and what do have to show for it -- an aldermen who seems to enjoy handing out loans and grants as she does every year giving out millions in federal Community Devlopment Block Grants.
Lord have mercy when the money runs out. How will our city leaders ever manage Evanston then?
Having said that, I really hope Cody and Anne make it. I might even bring some friends and pop in for champaigne.
Afterall, I'm part owner/investor. We all are. Don't forget to pay your property tax bill this Thursday.
:)
VOTE!!!!

They deserve a waiver

If World of Beer can have food delivered from elsewhere, we should allow the same arrangements for this new Howard St. wine bar. 
They could have pancakes delivered from the nearby IHOP.
 

Incredible Deal

What a sweet deal!  Cheap apartment, free rent for your business for the first year, free renovations.  All you need to do is show up with the booze.  I can't fathom a deal like that from a local government anywhere!
Why is this particular venture so deserving of such great treatment?  The prospective business owners are not currently Evanston residents and do not have a proven track record of bringing business to Evanston. 
It seems misguided to provide so much taxpayer money for this wine bar concept when Mr. Mavrakis can't even get a liquor license for his self-funded World of Beer location.  I guess the city council are not beer drinkers...  I can't make much sense as to why this was pushed through with little discussion.

Take a breath

Claire - It appears you have not done any reading on this topic beyond what is here.  I recommend reading their business plan and also the discussion/paperwork that was presented at the meeting when this was approved.  You may change your mind about this.  Ann Rainey did a great job making this happen.
Also, Mr. Mavrakis' liquor license is not being denied - it is being discussed.  And if you notice, the majority of the opposition is coming from other small business owners i.e. restaurants and bars, not the city.

When I read the business

When I read the business "plan" I see several red flags.
I think the biggest one is that their sales figures reference the sales figures of In Fine Spirits, which serves a heck of a lot more products than this new bar would, and is joined by an enormous amount of walkable shopping and entertainment. What method did they use to "adjust" from the hot Andersonville neighborhood restaurant and full bar to a wine bar on Howard St? Who did the adjustment and what is their business experience?
So where in the packet on the COE website are pages 15, 16, and 17 of the business plan? Are the taxpayers not allowed to see it or was it just an omission? The actual sales forecasts are absent from the packet PDF.