Evanston aldermen are considering charging tax-exempt organizations when they seek zoning changes.

Under a plan developed by an aldermanic subcommittee, tax-exempt groups that seek permission to rezone a piece of property, or approval for a special use or zoning variation, would be denied the change unless they paid up.

The groups would be required to pay every year an amount equivalent to the city’s share of the real estate taxes that would be due if the property were not tax exempt.

The city cut of real estate taxes amounts to about 20 percent of the total. The aldermen indicated no interest in also charging the non-profits for the roughly two-thirds of property taxes that go to the city’s two school districts.

Details of the proposal are now being drafted by city staff. Since the measure would be in the form of a change to the city’s zoning code, the approval process is expected to start with the Plan Commission before moving on to the City Council’s Planning and Development Committee.

City Finance Director Marty Lyons said at this week’s City Council Rules Committee meeting that the plan would not affect not-for-profit entities that don’t own tax-exempt property.

Some non-profits are tenants in buildings that are on the tax rolls, and others, including Rotary International, have voluntarily chosen to not seek tax exemption for the buildings they own in Evanston.

There was no immediate word on whether the city will also attempt to revise the zoning code to eliminate situations in which uses typical of non-profit groups may now be permitted by right.

The city has failed in recent efforts to persuade tax-exempt entities to voluntarily make a payment in lieu of taxes in return for a grant of zoning relief.

The non-profits have argued that they had already agreed on a price to acquire the property based on the assumption it would be tax exempt and couldn’t afford the additional cost.

Organizations that have outposts in multiple communities have also argued that making a payment to Evanston would set a bad precedent for their dealings with other communities.

When faced with those arguments, aldermen this summer backed off from an effort to extract a payment in lieu of taxes from National Louis University and gave approval to its request to establish a dormitory for students with multiple learning disabilities in a vacant office building at 1620 Central St.

And the city is faced with a similar situation now as a proposal for the Joan Dachs Bais Yaakov School to take over a vacant industrial building at 222 Hartrey Ave. works its way through the zoning approval process. 

Alderman Edmund Moran, 6th Ward, told members of the aldermanic committee considering the effort to charge tax exempt groups for zoning relief that he has doubts the plan would survive a legal challenge.

But other aldermen, including Steve Bernstein, 4th Ward, and Ann Rainey, 8th Ward, argued that the city’s need for more revenue is great enough to justify making the effort.

Bill Smith is the editor and publisher of Evanston Now.

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1 Comment

  1. Plan Will Likely Not Pass Legal Challenge
    I rarely find myself agreeing with Ald. Moran these days, but I am in complete agreement that the plan would not survive a legal challenge.

    Coincidentally, only this morning I was reviewing the Consent Decree dated 2/17/04 between NU and the City which “resolved” the action which NU had brought against the City in 2000 in connection with the Northeast Historic District. While the Court had rejected a number of NU’s claims in 2001, it DID NOT REJECT NU’s equal protection argument. While the ultimate validity of this argument was not tested because the case was resolved before trial, I think the fact that the Court did not throw out NU’s equal protection argument bodes ill for this committee’s plan.

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