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Dozens of people showed up at Wednesday night’s Evanston Economic Development Committee meeting to support a request for city financial help to expand the Heartwood Center.

Heartwood, at 1818 Dempster St., provides office space to 40 self-employed wholistic health practitioners.

Owner Nancy Floy, faced with the loss of revenue from the Evanston Rebuilding Warehouse, which leased half the 12,000 square foot building from her and is moving to new quarters, wants to expand the center into that space.

Floy told the committee the warehouse space is unheated, and she believes it would be difficult to find a new tenant for it without substantial renovation work.

Her proposed expansion would double the center’s capacity, with most of the new practitioners to come from among people who are already on a wait list for space at the center.

Floy says if she can’t expand and can’t find a new tenant for the warehouse space, she would run out of money and have to close the center within about eight months.

A breakthrough occurred just hours before the meeting, when representatives of Fifth Third Bank, which had agreed to loan Floy $97,000 for the expansion, dropped a requirement that no other debt be involved in the project.

Top: Heartwood Center owner Nancy Floy. Above: Alderman Ann Rainey, 8th Ward.

That allowed Floy to switch her request for $100,000 in city aid from a grant to a loan — which seemed more palatable to several committee members, including Alderman Ann Rainey, 8th Ward.

Paul Zalmezak, one of the city’s economic development planners, said under the new proposal the city would loan the money at a 4.75 percent interest rate, with interest-only payments for the first year and the balance due in a balloon payment after five years.

The city’s loan would be secured by a second mortgage on the property, subordinate to the loan from the bank.

Floy also plans to put $53,000 of her own funds into the expansion project.

Floy said Fifth Third has also agreed to refinance her existing mortgage loan on the building as part of the expansion plan at an interest rate two points lower than her current mortgage from First Bank and Trust.

A mix of practitioners at the center, neighbors and community activists from elsewhere in Evanston showed up to speak in favor of the project.

Dickelle Fonda, a Heartwood Center supporter.

Dickelle Fonda, who said she’s lived in the neighborhood for 30 years, said of Heartwood, “there’s never been a transformation like this in our community in all the time I’ve been here.”

The center has renovated a vacant building that had been in foreclosure and brings at least 500 clients a week into the area who also shop there, said Alderman Peter Braithwaite, whose 2nd Ward includes the site.

Braithwaite said the vacancy creates an opportunity to expand the center “that provides a wonderful service to the community.”

Alderman Coleen Burrus, 9th Ward, said that she believed the committee had a guideline that the city’s financial involvedment in such a project should be limited to about 25 percent of the cost. “At 40 percent, this one seems a little high,” Burrus said, “I’d like to see justification for that.”

Alderman Judy Fiske, 1st Ward, asked whether moving new tenants into the center would create commercial vacancies elswhere in town. But Zalmezak said all but one or two of the prospects would be new to Evanston.

Rainey said that years ago she worked across the street from the building and remembers when the area was “a very thriving business district.”

She said that after the commercial strip fell into decline, Heartwood came along “and really saved that area.”

While the proposal was only up for discussion Wednesday night, Rainey said she wants to support the project when final plans for it are submitted.

That’s likely to happen later this summer.

Bill Smith is the editor and publisher of Evanston Now.

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7 Comments

  1. A viable business should get a bank loan

    Let the Council member make the loan out of THEIR OWN personal pockets. 

    If the business is viable, they should be able to get a bank loan—from people who certainly know more about finance than the Council or the city manager.

    Anyway, why are taxpayers put on the line for "quack medicine," or as they used to call it "snake oil."

    1. While I completely disagree

      While I completely disagree with the characteristic of the Center's work as "quack medicine" I am increasingly concerned that local businesses think the City of Evanston is a lending institution.  I would like to see a report regarding how much in interest and repayments the City has received from the businesses it has supported in the past as I suspect that the amount would be less then what would be achieved in spending the money on a business development professional who can bring in already viable businesses.

      No offense to Heartland, which has made a lovely impact on the neighborhood ,but we (and the City is we) need to stop lending money to businesses that did not properly think out their own contingency plans and/or do not have enough money or the wherewithall to obtain a loan from a financial institution.

      1. I agree with you

        I asked a few months ago at Economic development to show us on a quarterly basis, how each one of these so called economic develop activities were performing.  Guess what Alderperson Rainey claimed there has never been a problem so why show us?

        The truth is Wally  why would he want to hold these project accountable?  he even went so far as to state some of them will have a zero ROI! 

  2. Not snake oil

    I am a client of the Heartwood enter. I assure it is not snake oil. What they do is legitimate emotional work.

  3. Multinationals vs community-based businesses

    We need to make a distinction between the types of  businesses that we support.

    The amount of money Heartland is asking for is peanuts when compared to the $20 million giveaway to the investment firm and the multinational corporations that benefit from the Dempster-Dodge TIF.

    Hearland is largely made of up of small business owners who live in the community.

    Dempster-Dodge has a couple of leasees who are local businesses, but the property was purchased by an out of town firm of real estate speculators and the main recalcitrant entity that is stymieing redevelopment is Dominicks–which is owned by a foreign firm.

    The new owners have rejected redevelopment plans that would help improve the community–like converting the strip mall into a multi-use, pedestrian friendly development.  Yet we are giving them massive subsidies.

    Another giveaway is the $23 million going to Trader Joes–another huge–and extremely profitable–multinational corporation.

    The Howard St. Wine Bar and Heartland are small peanuts going to locally-based entrepreneurs. 

    The real question is why we are giving outside profitable multinationals with no connection to the community massive subsidies.

    1. Sure, kill ’em all

      Sure…

      Let's kill the Dempster-Dodge TIF…. because the developer is a multinational.

      Let's kill the Trader Joe's deal… because the company is a multinational.

      Go for it. 

      Then see what you have left.

      Nothing.

      Get it?

      It is about business, and jobs, and tax base and opportunity now.

      Not about ideology and fantasy.

    2. What?

      Seriously, where and how did you get the idea that trader jo is getting 23 million taxpayer dollars or that the center is getting 20 million taxpayer dollars? 

      And BTW, IMO, any and every business entitiy that pays real estate taxes which fund the schools, parks and every other activity of their local communites, that provide jobs and paychecks to the communites residents, that donate to the communites charities, certainly do have a MAJOR connection to their host communities, and that includes massive, profitable multinationals headquartered in timbuktu. 

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