Evanston aldermen Monday night voted to support a request from the owners of the planned Little Beans Cafe play space that would cut $1.1 million from property taxes on the site over the next 12 years.
The county tax incentive program the project would use is designed for commercial properties that require significant rehabilitation and wouldn’t be financially feasible without the tax break.
It cuts the assessment on the property from 25 percent of market value to 10 percent for 10 years and then gradually raises it back to the original level.
As a vacant building, the property is currently taxed at roughly $68,500.
Projections included with the request for city support indicate that taxes would initially drop with the incentive to $56,860 and then gradually rise to $71,010 in the 10th year.
Without the incentive, taxes over that period would range from $142,149 to $177,525.
So, on average, for the first 10 years of the agreement, local taxing bodies would receive roughly the same amount of property taxes from the operating business that they do now from the vacant building.
Little Beans owners, and siblings, Rob Spengler and Shannon Valko.
Owners Rob Spengler and Shannon Valko already operate a similar play cafe under the Little Beans name in Chicago’s Lincoln Park neighborhood.
The owners told aldermen at the Administration and Public Works Committee meeting that they need the tax break to make the new outpost in Evanston financially viable.
The property has been vacant for nearly a decade, after CVS acquired all the free-standing Osco drug stores in the area and closed the one at Asbury Avenue and Oakton Street because it already had another CVS a half mile away at Asbury Avenue and Howard Street.
An earlier plan to locate an independent supermarket in the 14,000 square foot building fell through when that firm went out of business after doing interior demolition on the space.
Preliminary cost estimates are that Little Beans will spend $680,000 to rehab the building for use and an additional $290,000 on interior equipment and structures.
The owners said they hope to have the business, which will serve coffee, pastries and ice cream and offer birthday parties for children, open by early- to mid-January.
What?
I get giving a very low or even a zero interest loan or some other form of support that assists local business development. But this is a little overboard.
If a small business needs taxpayer support to the tune of over a million dollars to make the business financially viable maybe there is something wrong with the business and maybe it shouldn't be in Evanston.
I would love this business to be here but if it doesn't make financial sense then it didn't make sense.
You know, why don't we subsidize my property taxes to make my living here in Evanston financially viable.
Another joke brought to us by the City Administration. And again, the only people laughing are the pension-receivers and the businesses that steal our money. Way to go!
Of Course they did !
The Council seems to always find excusses to grant money and tax breaks—but never to the taxpayers of Evanston. Mean while individual property owners keep getting soaked.
I recall years ago they wanted to give large support or tax breaks to the grocery that was suppose to have gone there but as the article said the firm went out of business—did the city give them money before that ? recover it ?
Bets on how long THIS business even lasts ?
By the way, when did kids 0-12 start needing/drinking coffee ? I did not realize there was such a great need on their part.
Coffee’s for the parents
… and the grocery deal fell apart before the city had paid anything. The aid in that case was structured in the form of a sales tax rebate. Store never opened. Thus no sales tax revenue on which to base a rebate.
— Bill
At least it’s not a TIF
The tax break seems a little bit on the high end but it appears not much tax revenue would be lost, considering the taxes the current owner pays.
At least the city didn't declare the property a TIF as it did to the Plaza Shopping Center, which was used by the owner to sell it after buying it in a foreclosure. Imagine buying property in a foreclosure and then immediately the city gives you a TIF and then you sell it, likely for a nice profit on the backs of taxpayers. Our kind and generous City Council transferred the TIF to the new buyer.
I hope the Little Beans Cafe makes it. Evanston can use a business like that. It's a step up from a wine bar and the Peckish Pig.
A million dollars is a lot to give away to a business
A million dollars is a lot of money to give away to a new business just for renovations before they even open their doors. Are they buying the building or are they leasing, and using all that money on someone else's property? These people in the picture are smiling because they have finally found the suckers they have been looking for. That million dollars could repave a lot of our streets.
Sounds like a good deal!
"So, on average, for the first 10 years of the agreement, local taxing bodies would receive roughly the same amount of property taxes from the operating business that they do now from the vacant building."
"The property has been vacant for nearly a decade… An earlier plan… fell through."
Sounds like the City is entirely justified in making this business development decision. Citizens get a business establishment offering a nice service, instead of a vacant eyesore.
OMG!! It finally happened
It had to happen sooner or later but the is probably the first smart deal made since our mayor has been in office. Nice going. Now do something smart with the mansion that doesn't involve a taxpayer funded organization and deny support for cradle to career, an organization that says they can duplicate things that are already being done.
I know that it is easy to spend other peoples money. Just be smart in the future.
Little Beans comment
Hello my name is Rob, I am the co-owner of the future Little Beans Café. I want to explain what exactly this program is used for and how it is not reflected correctly in this article. We are not getting a $1 million tax incentive placed into our pockets. There's no cash exchange for this program, It is simply a 12 year offset for the extremely high taxes of that size space. Furthermore Little Beans is not directly benefiting from this program until after 2021.
The reason we are applying for Cook County 7A is to be able to get a sub lease signed with CVS, the buildings current lessee. Without this program we would never have been able to sign that lease because CVS would not have paid the higher tax rate once we occupied the property.
As I'm sure many of you understand, a family run start up small business does not have the sudden cash flow to cover a tax gap this high for its first few years. Considering this is a sublease agreement we would have had it in the form of major rent increases as CVS would not be willing to cover the tax increase once the property was redeveloped.
I again want to emphasize this is not a million-dollar hand out this is simply a 12 year program that steps the taxes up so that we could sign a deal on it already vacant property. Trust me for a business our size we are sticking our neck out in developing the property to this extent and we are looking forward to coming to the neighborhood!
Yes I am a Chicago resident however my sister and co-owner is an Evanston resident and she has been for years. She understands Evanston, she pays Evenston taxes, her kids go to school in Evanston, they attend an Evanston church. A modern and new family friendly use is good for a property that's been vacant this long.
Thank you for your community support!!!
This is Key to ALL businesses [and residents]
The article says "…extremely high taxes of that size space."
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A main reason it is hard to attract and keep businesses in Evanston is the high taxes they have to pay. Then the city has to find ways to offset their taxes with Tax Holidays, TIF, etc. and make grants/gifts so they can start-up or 'repair/improve' [though the Council's definition seems very broad and open to about any cash outflow or holding back tax in flow].
In the end many can't make it and move out long before these 'benefits' can be realized either in real taxes, benefit to the community—and leave another gap both in the community and the city finances.
Second and Third, are the meaningless city regulaitons that drive business crazy and hurt their bottom line and all the hearings/debates that hold up proposed businesses. Finally they give up and locate elsewhere.
If all businesses were treated equally instead of 'picking winners' we would have more business locate here and stay. Again the ciy government will never recognize this.
But the Council and Manager have not and probably never will realize the problems.