Evanston aldermen tonight are scheduled to vote on plans to establish a tax increment financing district for the shopping area at Chicago Avenue and Main Street.
Creation of the district is aimed in part at jump-starting plans for a mixed use retail and office development on a now-vacant parcel at the southeast corner of the intersection.
That project has been stalled because of difficulties finding an anchor tenant for the planned office space.
But the proposed TIF is also intended to provide funds for water and sewer upgrade projects and possibly other commercial development in the neighborhood.
Top: A rendering of the proposed office building at Chicago Avenue and Main Street.
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Related document
City Council packet with TIF district proposal
Council should wait until McGuire’s TIF report
Why wouldn't aldermen wait until after Northwestern Kellogg Professor Therese McGuire reports on the effectiveness of TIFS.
The Evanston Council commissioned McGuire to prepare a report on the "the effectiveness of past and current Evanston TIF Districts and compares the effectiveness of Evanston's TIFs with similar redevelopment areas in Illinois and across the United States." McQuire is scheduled to present her findings tomorrow at 5 p.m.
Based on past reports by McGuire my guess is she will agree in part to a past study that found TIFS can actually have a harmful effect on a local economy. Not only are TIFS a tax buden to residents and businesses but it also has a negative effect on commercial areas outside TIFS. In other words, the areas outside of TIFS have an unfair advantage to attracting and keeping businesses that natuirally would gravitate toward TIF areas that offer all kinds of tax-financed incentive.
I opposed a TIF for an existing shopping center built 30 years ago and purchased in a foreclosure by an investment firm that got a 65 percent tax reduction. I also oppose this TIF that is specificially designed to build something on the vacant lot at Main and Chicago, just across the street from two midrise condos built less than a decade ago.
Aldermen should postpone a vote until they hear McGuire's report. Anything less is irresponsible governing.
If you subsidize something, you get more of it…
Granting subsidies (in this case, TIFs) to certain businesses creates an imbalance wherein subsidized businesses have an inherent advantage over unsubsidized ones. Unsubsidized businesses must not only pay their share of costs, but also the subsidies given to other businesses. Over time, this results in subsidized entities crowding out unsubsidized ones.
This practice is not only destructive to long-term growth, it also disproportinately harms small businesses who don't have the clout to qualify for such subsidies.
If Evanston's goal is to become competitive versus other cities for new business investment, the solution lies in lowering taxes for ALL, not just a select few.
Really?
TIFs do not lower taxes for the developer, the taxes are still paid and the annual increase in taxes are still paid by the owner, they just remain within the tif for a period of time. While it is true money can go back directly into the development to insure it's construction, often the cash is used elsewhere within the district for other uses. Especially after a couple years of increases based on the now much higher assessment rates.
Usually in a tif district the "subsidized" development charges much higher rental rates than the "unsubsidized" properties. While it is true that the business that tend to occupy these tif retail buildings tend to be larger successful independents or nationals the cost basis for a business is much higher there than the non tiffed property next door. The idea that tenants are getting some kind of operating subsidy? Hardly.
Your comment that this practice is destructive to long term growth holds no water in my view. How do you figure the tifs have hurt small business? As a small business owner located next door to a downtown tif I can assure you it has only helped us small business owners in every way, in fact there isn't a single thing that has had a greater positive effect upon my business or the long term growth of downtown, than those TIF developments.