Doubts raised on Evanston Plaza tax district

Vacant shops in the nearly half-empty plaza.

Two aldermen raised questions at a public hearing Monday night about plans to establish a tax increment financing district to help revive the Evanston Plaza shopping center at Dempster Street and Dodge Avenue.

Alderman Coleen Burrus, 9th Ward, suggested she doesn't think some of the factors that a city consultant's report used to demonstrate the blighted conditions needed to justify creation of a TIF under state law actually are valid.

She said it appears there's nothing inadequate about the layout of the center and that supposedly "inadequate utilities" should have been replaced when the center was built about a quarter century ago.

But Paul Zalmezak, an economic development planner for the city, said century-old water and sewer lines run down Dodge Avenue, just within the proposed TIF district's boundary.

And the city's TIF consultant, Bob Rychlicki from Kane McKenna, said issues with how the center was designed -- with several spaces for relatively large big-box like tenants -- make it difficult to reconfigure the spaces to suit new tenants who likely would want smaller stores.

Burrus said she doesn't believe the city should get involved in recruiting new tenants for the center -- one of the roles envisioned for the TIF. "That' should be the owner's job," Burrus said.

But Zalmazak said the city could help get "a little bit above average" tenants for the center in the short run than the owner might be able to recruit on its own, by providing assistance to help with build-out costs or other needs.

Top: Vacant shops at the plaza. Above: Alderman Don Wilson, 4th Ward.

Alderman Don Wilson, 4th Ward, said that although he visits the center several times a week, he believes people don't like to go there because they don't like the look of the surrounding neighborhood.

"The plaza is the best looking" of the  corners of the Dempster-Dodge intersection, Wilson said, and the other corners have been part of the West Evanston TIF for years.

He suggested he had doubts about how the new TIF could fix the neighborhood when the West Evanston TIF hasn't fixed it.

But Alderman Ann Rainey, 8th Ward, said she believes the shopping center isn't attractive because it's nearly half empty.

"If the stores were occupied, you'd see a huge change," Rainey asserted.

Alderman Judy Fisk, 1st Ward.

Aldermen Judy Fiske, 1st Ward, said she favors the TIF. "I think the space is potentially so wonderful and visible and could bring so much to the city," Fiske said.

The plan also drew support from Alderman Peter Braithwaite, whose 2nd Ward includes the plaza site, and from Alderman Delores Holmes, 5th Ward.

The only member of the public to speak at the public hearing, Jeff Smith, of 2724 Harrison St., said TIFs are overused, and the proposed $20 million budget over 23 years for this proposal is too large.

He said the current owners of the plaza "have already gotten a couple of big breaks on the property," buying it from the bank that foreclosed on it for not much more than the previous owner paid 13 years ago and recently receiving a 66 percent property tax reduction.

"I don't think the property is blighted," Smith said, and the local taxing districts will probably get more taxes from it over time, with or without the TIF.

The City Council could vote on whether to approve the TIF as early as its Tuesday, May 29, meeting.

Related story

Evanston to hold hearing on plaza tax district

Comments

restrictive lease arrangements do not help

Unfortunately for this shopping center the few tenants that do exist have varying deals with the ownership. Most critically Dominick's has a "non-compete" lease that prevented such potential tenants as Trader Joe's from considering that center.
Considering the Trader Joe's wants to be near to other food stores (so it has been claimed in the arguments for the Chicago Avenue site and deal), what better locaytion than near a Dominick's, much closer to Dempster and the direct route to the Edens Expressway (without driving all the way across Evanston), let alone, for what it is worth (being close to Jewel at Howard west of dodge and Aldis also west of Dodge.
Why no one tried pushing Safeway/Dominicks on this point is unclear since it seems doubtful they would have moved out and, if they had any foresight, might have recognized that Trader Joes was an opportunity to bring customers to them (for all the stuff that TJ does not sell) as well.
Certainly even a "tax break" or some deal to Dominick's to sweeten the deal might have been less expensive than The Chicago Avenue arrangement that might stil lresult in Whole foods closing up or losses to both WF and Jewel.
As to the other tenants in this space, the overall arrangement looks like a wasteland even with that half empty food cluster at Dodge-Dempster with little other than the few shops facing north toward the now empty KFC.
What has never been explained is what types of tenants do these new owners expect to bring in and who might they have been speaking to so far?  Not grocery stores, pharmacies and probably not restaurants or fast food operations.
What is left?  Auto parts, dollar discount stores or ......... wine bars and storefront theaters (whoops!  we covered those elsewhere)
 

I agree with Ald. Rainey

I agree with Ald. Rainey and disagree with Ald. Wilson's comments on why the Evanston Plaza lacks appeal.  I often drive past the site, and the reason I never stop there is NOT because the surrounding area is visually unattractive, but because there are no stores there that I am drawn to patronize.

What the council should do

Instead of throwing money at companies to build/buy into Evanston, they should be selling companies on the benefits of coming to Evanston.  Then let the companies decide if it is economically beneficial to them.
Instead, the council seems to believe that subsidizing firms to come here will cause them to come---but that is not an economic decision that makes sense to the taxpayers or the company.  If the company needs that incentive, they are/would probably be marginal---and not last long.
Instead, the council could tryto  point out good things about Evanston. If that does not sell them, then maybe it is the wrong place for them.  The council could try to line them up with bankers, point out land/demographics that would work for them.  NU and an educated population should be big draws.
Of course, what they sell has to be attractive and true. High taxes, water rates, zoning hearings that take forever, citizens groups like on Central that tie-up improvements for years, regulations that make no sense (like sign inspector, etc., a government that tries to pick winners and leave the rest of the taxpayers/businesses out in the cold will not draw business.
When you pay a child to do chores and get good grades, but then discourage them at every stage, they soon tire of it and not only stop doing so, but become resentful.  We should not be treating businesses this way.

Bring Egg Harbor Cafe to Evanston Plaza

Egg Harbor Cafe. 
We've frequented this restaurant for many years as we moved around the burbs. We now hike to the one in The Glen. According to managers there, Egg Harbor won't go anywhere (e.g., downtown Evanston) that doesn't have an ample parking lot.
Evanston Plaza would be a great fit!

Egg Harbor?

What economic and market analyses have you performed to make such a suggestion. This shopping center needs to provide that it can support almost any decent retailer before an "upscale" restaurant might consider moving in.  Consider that the "food building" set along Dodge nearest Dempster has housed numerous "buffet" restaurants that catered to a wider dmeographic and all of them failed. I would suspect that Egg Harbor or the equivalent would want the assurance that upscale retailers who could entice shoppers to this location might be availlabe to stop in for lunch or dinner - not the reverse.
If these seems hard to believe, consider the food purveyors near the Home Depot? How about on Howard near the Jewel, Best Buy, etc where hordes of patrons come daily? What about on Main near the Sams Club and Food for Less, where the strip is not so up-scale and the one effort at a classy Japanese Restaurant (9 Fish) went through economic agony for several years before changing hands and character until it is a mere parody of the original with new owners and lower grade food and a revolving array of fast-food neighbors? And those are all shopping centers with more than one grocery store and little else, as is the case with Dempster-Dodge that also carries the onus of being near the high-school, not able to serve beer or  liquor (readily if at all - as Pizza Hut learned) and restricted as to fast food options.
Now consider Old Orchard or even Edens Plaza or, dare I say Lincolnwood Town Plaza and consider their food places and the numbers of patrons and potential diners. My guess is that any intelligent food facility or even a potential tenant, in general, will study the performance of the present tenants, e.g., how well is the Italian restaurant at the north-west corner of the strip doing versus the drive-ups in the center? How well are the few retailers left along the west side and at the Dodge strip near Radio Shack doing? Do we want to be across from BK, McD, etc and near currency exchanges, pay-day loan operations and auto care facilities? What is the potential market within a one, two, or threem ile radius?
This shoppig center started out with high expectations: Toys'Rus, Office Depot, Franks Nursery, PharMor, Kids'RUs, etc and all that we have left (actually not an oriignal tenant) is Dominicks and a few smaller operations......... soon it will resemble the Howard-Western Shopping Center - the poster child for dollar discount stores and little else.
 

Just a suggestion!

Re: "What economic and market analyses have you performed to make such a suggestion?"
I didn't know I needed to perform such an analyses to make a suggestion as a community member. I'll leave that to the folks who are paid or elected to do that! :)
I disagree that buffet restaurants cater to a wider demographic (vs. a different demographic)...and I also disagree that Egg Harbor is necessarily "upscale." Its prices and style are comparable to Le Peep, and the quality far better. (I'd actually like to see Le Peep move out of its spot and Egg Harbor move in! But that doesn't address the Evanston Plaza issue...)
Egg Harbor of course has a very clear sense of where they will and won't be succcessful. Admittedly, their locales are in mostly white, predominantly economically advantaged communities, as a casual once-over of their locales indicates. Beyond my own preference for EH over, say, a chicken and waffles place, my thought is that it would enhance the reputation of the shopping center and perhaps entice other business. And I could walk there from my house! :)
Not trying to save the world here, just offering a possibility!

no market analysis is the problem

I like Egg Harbor too-  But this kind of thinking, along with that of city council, is exactly the problem-
  INvestment banks WOULD do a market analysis before lending money out to private business.
CIty council just thinks these ideas sound nice.
Lots of things sound nice, but that doesn't mean that they will make money. The city calls these projects "investments," and an investment should make money.
Take your own money and "invest" in nice possibilities- that's called investment banking.  Please leave my money to pay for my firemen. police. libraries, recreation, streets.   Pensions are underfunded and services continue to be shut. 
 
 
 
 

Development of areas takes time

I remember maybe 20 years ago the Dodge/Dempster plaza was a place I could go to and find many things I wanted. Maybe the first question is why it failed and not [if true] just bad management by the management company. Were shoppers saying they did not like the area [esp. at night], the types of businesses, or what?
When I think of the Dodge/Dempster development, I wonder if there is a parallel with something I saw in Chicago.  If you took the Ravenswood/Evanston Express in the late 70s you remember the area from where the train turned onto North Ave. to at least Clyborn and maybe beyond.  Abandoned buiding, empty lots from which kids threw rocks at the trains---in general a mess.
Maybe I'm reading too much into this or what I think happened but...Then I saw a couple of two flats that seemed to have cleaned-up but not so as to stand out.  I got the feeling some young professionals had moved in and were fixing up the insides but not wanting the outside to tip thieves/vandals off.   A year or so later you could see more of this and as you know in a few years [took longer for other parts] the whole area was transformed---to say the least.
I wonder if the same type of thing is what the Dodge/Dempster area and for the matter the west side of Evanston, will take---and it probbly means years. As it is with the crimes we all read about on the west side and even at Dodge/Dempster and ETHS, I suspect many residents avoid the area.
When I do infrequently bike on streets from Oakton to Lake between Asbury and Dodge, I do notice major improvements in the condition of houses and that the area has become more diverse---which in this case means more whites. Even this has taken many years and Dodge/Dempster plaza is still pretty much a border on this.
People going to the plaza don't want to think of it is 'practically' safe just because it is at a border---they want to know a larger area and that meaning west of Dodge is also a good area.  Unfortuanetly by natural processes that could take years and it is unlikely the police or a major developer/development will come in and clean things up in a brief period.
Like my example on North Ave. the city may support change but residents must be able to believe it will really occur and put $$$ to buy a house.   So far the Council seems to have its eyes on things like wine bars, affluent grocery stores and Waffles.

New TIF - is another rip off

It is interesting they base the justification of the TIF on inadequate utiliities - sewer and water.  Isn't the sewer and water fund suppose to be paying for that?   isn't the City taking 7 million for captial improvements from the fund? ( not really since they transfer 3 million to the general fund )
This TIf is not about fixing the aged utilities, its about Wally having another pot of money to waste, that is give to business to move here.  Its a safe bet to assume they will not fix a thing under the street..
I am also quite confused what increment exist here for Wally to start giving away money?  While I don't know TIF rules and regulations, can Wally borrow off the future increment?   ( that is if there will be any)
I want to see what scheme they are cooking up here to start raiding the TIF pig bank.  Remember if this fails who will hold the bag?  We will with more higher taxes, which will just be covered up in the shell game transfers.

Public trust and integrity of our aldermen in question

Our aldermen really really need to take a timeout on their reckless spending spree and giveaways. The City of Evanston should not turn into a government equity investment firm.
Things are looking better but we are not out of the woods, The European Union is about to implode and that will send economic shock waves across the world. Illinois is in a dire financial situation with things looking more grim. 
Aldermen are elected into office and expected to uphold the utmost public trust and integrity. How can these aldermen hold the public trust when they approve a TIF for a shopping center on the grounds that the 25 year old shopping center is blighted because an old sewer line runs down Dodge Ave?
If that's how consultants and aldermen want to define blighted well then there are a ton more blighted shopping centers and other commercial properties all over Evanston.  Are we to expect more TIFS like this?
These consultants also justify a TIF for the Plaza shopping center by using the 1992 Howard-Hartrey TIF as an example of a TIF being use for a single property. That TIF was created to revive the land that had an old abandoned warehouse. The Howard-Hartrey TIF was used to convert the warehouse into a shopping center.
That is NOT the case here. The Plaza shopping center on Dodge has a high vacany rate but is NOT abandoned and the use will likely continue to be a shopping center. It is dishonest and borderline deceitful to claim the situation on Howard-Hartrey is the same as the Evanston Plaza center. 
If a TIF is passed for this shopping center then up to $20 million in the next 23 years will be taken away from our schools and city services. Already, D65 is laying off art and special education teachers. City taxes have risen to double digits in the past two years.
Meanwhile, aldermen recently agreed to pay $2 million to purchase property for a parking lot on behalf of Trader Joes and agree to a 75 year lease with a one-time $50,000 fee. What business would purchase land for $2 million and lease it to another party for 75 years with a ONE-TIME $50,000 fee? We could have and should have demanded more.
Then the city agrees to a deal with an inexperienced business couple to spend $100,000 to rehab a building the city owns and convert it into a wine bar on Howard Street.  I guess Wally B. and aldermen want to spread OUR love around.
The Evanston Plaza shopping center has changed hands twice in the past couple of years. And it was purchased recently by Bonnie Investments for about $1 million in a foreclosure.
I have two questions about the TIF for the Plaza shopping center -  Did the new owners, Bonnie Investments, know the city would be willing to convert the strip center into a TIF before it bought it as a foreclosure? Did the city approach Bonnie Investments about the TIF or was it the other way around?
I favor government offering incentives to attract businesses but this TIF is too much and sets a bad precedent. Furthermore, and more importantly, the reasons to justify this TIF do not hold water.
Remember, public trust and integrity is the ultimate goal of leadership. You lose that, you lose everything.

That one-time $50,000 fee

"Meanwhile, aldermen recently agreed to pay $2 million to purchase property for a parking lot on behalf of Trader Joe's and agree to a 75-year lease with a one-time $50,000 fee. What business would purchase land for $2 million and lease it to another party for 75 years with a one-time $50,000 fee? We could have and should have demanded more."
And what would have happened if an alderman insisted that Trader Joe's pay more...and TJ's walked away? Enquiring minds want to know.
My guess is that Anonymous Al would post some messages about how  Democrats in the Council and their unfriendly policies to business and extortionate demands are preventing economic growth.
 

Aldermen and city staff are not hard negotiators

I am going to take a guess and say you have little to no experience in business negotiations.
It's obvious Trader Joe's wants to open a store in Evanston. The city and TJs have been in serious negotiations for about a year.
TJs could have walked, yes. But it's clear they see a market in Evanston that fits their business needs.  I'm not privy to all the details of the negotiations but it appears that Evanston alderman and staff were too eager to land a Trader Joe's than the other way around.
I say this because alderman and staff worked hard to prevent anyone knowing about the talks and even had a code name for the negotiations. Aldermen were so overjoyed about the TJ deal that when they held the press conference to publicly pat themselves on the backs they forgot to thank or mention Northwestern's role in the three way deal.
Maybe rather than the apparent singular focus from aldermen in trying to land a Trader Joes, maybe they could have shown public interest in a Fox & Obel, Treasure Island or my fav, Tony's. Why put all your eggs in one basket - shop around. 
Instead, in their apparent zeal to get the much hyped Trader Joe's, the city essentially gave them almost $2 million. I understand the benefits to the city but it seems too much. It didn't help when the city manager said we should the "spread the love around."
Wouldn't it have been more palatable if the city got an upfront fee of $50,000 and then annual fee of something like $10-20,000 for the life of the 75 year lease? Or some amortization fee schedule with built-in incentives?
It seems aldermen are sending mixed messages. For large retail developers, they'll bend over backward and give away the store. Then they twice considered a bag tax, created a special use zoning that requires religious groups to get city permission before renting in a commercial area. Aldermen Rainey complained that there were too many church storefronts on Howard. But owners of strip centers on Howard couldn't find any other tenants.
Maybe a TIF is in order for them.
I know the commercial market is tough right now but don't give away the store. I guess it's easy to negotiate with other people's money. 
I want my aldermen to be hard, skilled and sensible negotiators. I don't see that.
Do you?

Business management degree or commensurate experience

The types of shenanigans we've been reading about that are born of the huge economic development effort are the very reason why we should look for folks with degrees in business management.  City employees who manage departmental budgets and alderman who agree to the set of the table when spending our tax dollars should all have background in business management.  It is obvious that the current paid employees and elected government have little of this knowledge.  There is no plan to what is being done, only reactionary behavior to one-off business ideas.  Wine bar on Howard?  After a handicapped guy is beaten and killed on the street, who is going to venture to patron said wine bar?  I realize we are told we will recoup the funds for this wine bar when the couple buy the building.  How much will be recouped if the business fails and the building cannot be bought by these young entrepreneurs?  As for paying $2M to create a parking lot, I am already paying plenty of federal taxes toward corporate welfare, now I watch as my local tax dollars too are spent for corporate welfare.  When will it stop?
We have plenty of food establishments in Evanston and a media that is only just beginning to report on our American obesity and the cost it will rack up in healthcare.  If this trend and education on the subject is to continue, how fares the Evanston that attempts to build itself up with grocery store sales dollars?  People who were buying steaks the size of their heads may decide they probably are overeating and will only buy steaks that are half the size of their head.... shrinking sales will be the result.  The very reporting on this topic forces us to question putting so many eggs in one sales tax basket - that of food and the food services industry.
Anyone with a business management background would know that trends play a huge role in what people will be buying tomorrow and they would understand that we need multiple types of business establishments so that buyers have options.  And they would understand the risks associated with giving tax dollars (even if they came from a TIF) to entrepreneurs with no prior business owernship experience for a wine bar in a questionable neighborhood. 
 

Would YOU do business with them ?

Given the decisions [supposed economic, development, etc.] being made by the Council and others in our local government [o.k. county and state also] I had to ask myself if I'd ever do business with them.
If they ran a store that sold a product that I could compare the costs with other stores, then o.k..  But if I needed them as a lawyer, accountant, doctor, consultant, money manager, psychologist, etc.---definitely not.  These and many other professions requre sound judgement both ecconomically and many other levels.  It is pretty clear sound judgement has not been used in the decisions the government bodies have been making.  Oh yes, I would also not want to invest in any project that were involved with and would not even want to eat at a restuarant they ran because I'd never be sure how carefully they screened their suppliers to care they took in preparing the food even the lack of analysis we have seen in public financing.

TJ and the village idiots

Trader Joe's must have thought they died and went to heaven when they ran into the mayor, village manager, and the city council. The giveaway to TJ was unbelieveable. The worst part of the whole deal is that the council thought that they could recover the city's investment in 3 years through the sales tax. The problem is 95 % of TJ's business will be a businees lose from other groceries. It will take 15 - 20 years to recover Evanston's investment.
It is hard to tell if Evanston's village idiots is  the city government or the citizens that elected them.
Oh, what would have happened? The city would have been 2 mm ahead and could have used the money paying off debt or for a much better deal.

Funny but sad

I find it odd that Trader Joe's would want to come to Evanston and so close to Whole Foods, which as I understand from the few rich enough to shop there, prides itself on having the high quality foods Trader Joe's promotes.  Or do they serve lion and deer steaks ?
A former neighbor takes the bus to a current Trader Joe's and wanted one in Evanston but admits she will not buy much there---too expensive.  She will go there but not walk three blocks to D&D which I've been telling her for years has the best salads I've EVER had.
All this reminds me of when the Dominicks on Greenbay tore down and rebuilt.  I saw people at Chicago and South Blvd [i.e. Dominicks built only a few years before] take a bus to the new one on Greenbay which also had to put a policeman there to direct traffic.  Of course the 'thrill' fell-off quickly.  Those who always want 'something new' will tire of Trader Joe's and it will become another speciality store for those who want to show they are rich enough to shop there [when people can see them there or food containers in their home].  Then there will be a push for something 'new.'

Stop It!

Do me, and the rest of us a favor, stop turning this into a class warfare issue! 
Such a tired and old argument, one that you attempt to strap to any issue, like TJ, for your personal purposes of venting your disdain for success, or perhaps your own shortcomings?

Growing tired

The only thing the Trader Joe's crowd will tire of is people like you, waxing poetic on how hip it is to be poor or thrifty or whatever you consider yourself to be, while still living on the North Shore.  Keep your sterotypes to yourself and stay away from Trader Joes.  I don't want you eating my delicious rich-folk snacks.
And rumor has it that D&D is so 2011.  The true hipster poor people cross the border into Rogers' Park to hit the Latino markets to get their thrift on.  But I wouldn't know that first hand.  That's just what I've overheard from the hired help at my lion-and-deer-rich-guy BBQ's.

We should applaud new business

Nice post!  Total agreement with you. 
We should be applauding new business into our city instead of ridiculing it on the grounds of class warfare and stereotypes.
I really think the public is just sick of this rhetoric. 

Not class welfare but common sense

If people want to spend their money at Whole Foods or Trader Joe's,  that is their business.  People are just pointing out spending for things for the 'name' instead of the real quality does not make a lot of sense.  What I fear is these will be novelity stores and soon loose their appeal and they or stores around them will go out of business.
Many people with good incomes use their money for causes not to buy high priced items.  As the founder of the trading firm I worked at said "...better we make the big bucks than others, because our people use it well."  Meaning the big salary/bonus paid was used wisely---two partners gave 90% to charity and most employees devoted large percentage also.
Anyway what bugs many residents is the city keeps committing taxpayer funds [and overpaying at that] for businesses the Council picks as 'winners' and apparently assuming buyers [who already bought or decided to buy] now need gifts.  Let people shop where they want but the city must make economic decisions not 'we want ______ store and we will pay anything for it'.

LOL

Wish there was a like button on this comment page-
 I'm snacking on some lion meat right now.
 

Save the taxpayer 2 million dollars

IF TJ decides to walk away, the tax payer saves $2 million dollars, and people go elsewhere to get their groceries-  that's what-
  I am a huge TJ fan, but I"m not willing to pay for it to be here.  
I don't see that this "investment" will ever re-coop this $2 million dollars.  People only need so much food, and so whatever business TJ brings is most likely going to drain from WHole FOods, Dominicks, and other stores- Not to mention the lost tax revenue from the two properties that are being torn down for a parking lot.
City council needs to go back to streets, parks, and recreation and stop trying to play investment banker-
Is the city making best use of our tax money by continuing to back so many risk ventures with all our tax money?  Last time I checked, not one of the city council members had any experience in the grocery business, bar industry, pancake/waffle business, arts and theater... etc.  What makes them the experts on these "investments." 
 I'm not sure if any of these alderfolk have ever had any for-profit business experience at all? 
Enquiring minds want to know-
 

Giving money away

This is what makes BO so popular among the "gimme's"; the socialist plan is to spend, spend, spend like there's no tomorrow so the proles will be forever beholden to them (and vote for them as well). The Alderidiots can't do anything better than spend other people's money!

Build a park

We seem to be racing as fast as possible to spend money - despite the issues with the city's budget. Why don't we wait to see how other "investments" by the city pay off and let private investors, well, invest?
Speaking of investments, what's happening with the wine bar I wonder? How about the $700K theater investment? Are the buildings yet rehabbed? Is there more spending yet to go?
Did anyone find the $170K we spent on the museum or is that just an inconvenient memory?
How about dedicating some of these millions to our pension liabilities? Or parks?