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Evanston’s City Council tonight is scheduled to take a final vote on a creating a tax increment financing district for the Chicago-Main shopping district that could pump $10 million in public funds into a planned private office development.

The office building, planned for a vacant lot on the southeast corner of Chicago Avenue and Main Street, is projected to have a total cost of between $20 million and $30 million, depending on its size.

City officials estimate it would provide space to house 300 to 400 workers who would become new customers for retail businesses in the surrounding area.

They note that the intersection is one of the few in the metro area served by two different rail lines, which, they argue, makes it an attractive location for high tech businesses that want to draw young workers who now may live on Chicago’s north side.

A redevelopment implementation plan to be voted on by aldermen tonight suggests that nearly half the money — $4.5 million could be spent for a public parking garage to be included in the building and streetscape improvements around it.

Another $2.5 million could be used for site preparation and related work with $2 million used to subsidize interest costs for the project and $1 million for professional services.

The city subsidies to the office project, and another $15 million in proposed work in the neighborhood — mostly for improvements to public utilities — are anticipated to be funded by increases in property tax revenue within the TIF boundaries during the district’s 23-year life.

Top: A rendering of the proposed office building at Chicago and Main.

Bill Smith is the editor and publisher of Evanston Now.

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15 Comments

  1. When are we going to learn?

    Our city council would be wise to heed an economic law, "If you subsidize something, you get more of it".

    Giving this development (or any business) a subsidy grants it an economic advantage over those who don't receive such subsidies.  As time passes, subsidized businesses become more common, as other businesses can't compete with subsidized ones.  In the end, we will have more businesses demanding subsidies to compete with those already receiving them.

    TIFF supporters will commonly argue, "But how else can we attract businesses in Evanston?" A better question might be, "Why is Evanston losing business opportunities in the first place?"

    As most (who have lived here for any length of time) know, the answer is prohibitive taxation and regulation.  (i.e. businesses can more cost-effectively access a customer base in other areas).  Yet, rather than address this fundamental problem, Evanston seeks to subsidize it.

    Attracting businesses to "open shop" in Evanston (in my opinion) was meant to alleviate the tax burden on residents, not increase the burden.  However, as long as we continue subsidizing businesses to offset prohibitive taxation/regulation, residents will have to "flip the bill".

    When are we going to learn?

  2. Subsidized parking?

    "A redevelopment implementation plan to be voted on by aldermen tonight suggests that nearly half the money — $4.5 million could be spent for a public parking garage to be included in the building and streetscape improvements around it.

    Another $2.5 million could be used for site preparation and related work with $2 million used to subsidize interest costs for the project and $1 million for professional services."

    We are going to subsidize parking…but then when someone wants to build an extended stay hotel  on Chicago (with no subsidies) or an apartment at Emerson & Maple (no subsidies) or a Tower at 708 Church (no subsidies) , etc.   our aldermen and local NIMBYs get all excited.

    And what about traffic?  Won't all of these parking spaces attract cars…and traffic?  I guess NIMBYs don't mind traffic as long as it is accompanied by parking spaces.

  3. $4.5M for Parking?

    I'm sensing a trend – the city pays millions of dollars to ensure that a new development has parking. Yet this intersection is "one of the few in the metro area served by two different rail lines." Purple line, Main street Metra, and the 205 bus. Why add parking? Why pay to add parking? This makes no sense. There's a difference between encouraging economic development and enthusiastically incentivizing urban sprawl. Evanston is edging toward the latter. 

     

    1. Check the map

      "Why add parking? Why pay to add parking?"

      It is in the 3rd ward, and Alderman Wynne just loves parking spaces.

      1. If this goes through …

        If this goes through. From Main to Dempster there will be three city owned parking lots plus two others one by Jewel and the other by Whole foods. This smells like the giveaway on Howard  plus loans to businesses that should get them from a bank

  4. There’s vacant space elsewhere

    There's vacant space – and rumours that there is likely soon to be more – in 909 Davis which is also served by two rail systems and already has two public parking decks (Maple and Sherman) adjacent.  How come 909 Davis has vacancy if the theory of drawing younger workers from Chicago is valid?  And, by the way, 909 has much better amenities all around it.

     

     

  5. Good idea

    Sometimes you need to do a little investment. I know a bunch of people are against the idea because of the classic "stop the different-ness" routine.

    If you want to make enemies… try to change something.

    Let's do it Evanston! Office space.. parking lots.. whatever it takes.

  6. A TIF district for

    A TIF district for development without a revenue generating business is highly, highly unusual.  The article states that the "City officials estimate it would provide space to house 300 to 400 workers who would become new customers for retail businesses in the surrounding area."  This rationale is not used:  TIF bonds that are directed to a TIF project should be serviced and retired by that same TIF project.  Including adjacent retail businesses in the TIF area means that the proposed TIF project is not feasible.

    Does the City staff and aldermen understand basic real estate development?

  7. The Northwestern MBAs did a

    The Northwestern MBAs did a recent study for Wally, probably paid for by city taxpayers, that revealed the shortcoming of this site. We'll see if the council remembers those findings as they spend and spend money they take away from other civic institutions.

  8. Effect on rents/sale prices

    When you build more apartments, condos or offices, you expect that supply/demand will mean

    1. rents and sale prices will decrease

    or

    2. occupants of existing spaces will move to the new units and abandon the old.  Probably meaning the new units can rent/sell for more. And old units will become vacant.

    unless Evanston's popluation increases [new businesses move in]

    Looking at the population levels, it does not seem that Evanston's population has not increased anywhere near the rate of new living spaces.  Unless the laws of supply/demand have been canceled, it appears 1. or 2. [or a variant] must have occured.

    Does the city or anyone have records tracking the effect on rents/sales value of the new construction over the last 15 years ?  Is the city [many times with TIF or other supports] paying for excess supply which is thus hurting the fiscal conditon of the city.

    'Build it and they will come' does not always work and I suspect an examintion of the city finances would show that—or we will before long in higher taxes and falling value of the Council supported plans/gifts.  I don't see much of a record of what the Council promises and what we actually [financial] get.

     

    1. Clueless developers

      If I recall, a study was just released and Evanston has a very low apartment vacancy rate, lower than most of the Chicagoland area. In other words, we need a lot more apartments.

      Same is basically true for class A office space. While there is some supply left from the recession, a case can be made that it is not that much extra supply and therefore having space available for the rising, albeit slowly, demand may make some sense.

      Maybe you have an understanding of economic supply and demand that greatly exceeds that of these developers. But I suspect that these developers have and are able to commit millions of their dollars because they indeed have a pretty good understanding of supply/demand theory.

  9. Any increase in the overall

    Any increase in the overall taxable value of property in Evanston benefits all Evanston property taxpayers.

    More taxable value translates into a lower tax rate for everyone. Encouraging development therefore in time pays benefits by providing for more taxpayers to foot the annual increase of our schools property tax levies (67% of bill).

    Increases in Evanston's tax rates, and therefore tax bills, were the direct result of declining values. Declining sales data and high commercial vacancies caused the overall taxable value decrease.

    New construction is encouraging and single family home sale prices are up. An improving economy will help too.

    1. Wishful thinking !!
      Your comments represent wishful thinking and a naive understanding of government and our tax structure.

      Taxable value of property is just an accounting metric to generate the needed revenues to operate all of our government entities. What we as citizens of Evanston should really want to see is an increase in “market value” of our property. “Taxable value” can be adjusted up or down to “make the numbers work.”

      “More taxable value translates into a lower tax rate for everyone” is wishful thinking. Too often, given the opportunity, government officials will SPEND MORE MONEY, and not use the additional tax base to lower the tax burden on all citizens.

      The biggest issue to watch are the budgets for each government entity. And in Illinois there are a lot of them, too many in my opinion. Just look at your property tax bill: D202, D65, City of Evanston, Library Board, Cook County, Evanston Township,Mosquito Abatement and the list goes on. Each government body requires money to operate and all you have to do is sum up all of these organizations to determine the tax revenues they need to generate to fund themselves.

      So while Tax Revenue is an INCOME STATEMENT issue, government generates this revenue from real estate “values” which are a BALANCE SHEET item. Hence the mismatch. People get very frustrated when their property value goes down, but their taxes go up.

      Remember when Cook County kindly lowered the “Equalized Assessed Values” to reflect the drop in real estate prices? They offset that with an INCREASE in the “multiplier” !! Why? Because the government needs to generate tax revenues to fund themselves.

      So yes, “Increases in Evanston’s tax rates…were a direct result of declining values” because the numerator stayed constant or increased while the denominator decreased. Simple math. However, “tax bills” increased because the government needs more money to pay for increased wages and benefits and new programs etc.

      True, “new construction is encouraging and single family home sales are up.”
      And “an improving economy will help too.”

      But you have to watch the spending !!

  10. Historic neighborhood

    I will always remember how Katz Developers (?) advertised their new building going in on that spot by saying it would be in a historic neighborhood. Then they tore down the historic terra cotta commercial building there and then they disappeared, however many years ago. On the other hand, now the site gets used a couple days a year during the Custer Street Fair. Would love to know the ins and outs of that story. How much tax revenue did Evanston miss out on in those years? I don't remember any vacancies in that building.

  11. All these lost years…

    It's high time that lot was developed. I don't remember when the building was torn down, but the small business tenants were being pushed out as long as 12 years ago, impacting the neighborhood economy by loss of sales generated by the tenants and their clients.  However, though I'm not opposed to modern design, I have to ask, what on earth is happening to the quaint small town character of Evanston?  Like the building on the Northwest corner of Main and Chicago, this design is far too sleek, and, in what has been and we'd hope would continue to be a pedestrian friendly area, the street level facade is cold and imposing.  Won't any section of Evanston maintain vintage charm? 

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