The developers of the planned 40-unit Evanston Commons townhouse complex on Custer Avenue presented preliminary figures to a city committee Wednesday indicating they’ll need $2.5 million in funding from the neighborhood’s tax increment financing district to make the project financially viable.
Ann Moroney, president of Johnson Research Group, an economic development consulting firm hired by the developers, said that without the city aid the $25 million project would show no profit to the developer. With the aid, she said, the developers would see an internal rate of return of just under 10 percent.
Figures presented by the developers indicate that the townhouse development would generate nearly $11.5 million in additional tax revenue for the Chicago Main Tax Increment Financing District by the time the TIF closes in 2037.
A rendering of one block of the homes planned for 910-938 Custer Ave., the site of the former Dard Products factory and warehouse.
Accepting city financing would obligate the developers to double their contribution to the city’s affordable housing fund, from $500,000 to $1,000,000.
The city’s community development director, Johanna Leonard, said consideration of the TIF funding was outside the scope of review by the Design and Project Review Committee. But after considering revised design plans for the development, the committee voted to recommend the project to the Plan Commission for approval.
The revised plans included more details on efforts to improve the energy efficiency of the homes and a proposal for nearly $250,000 in potential public benefit improvements in the neighborhood, ranging from new plantings along the railroad right of way to new playground equipment for Fitzsimmons Park.
While design plans for the development will go before the Plan Commission at a meeting at 7 p.m., Wednesday, Feb. 13, in the City Council Chambers, the review of the proposed TIF funding will be handled by the city’s Economic Development Committee at a date not yet determined.
Both the design and funding of the planned development project will ultimately be subject to approval by the City Council.
No TIF Money For Luxury Housing
This is ridiculous. Using TIF money to subsidize the building of luxury housing? If the developers can’t make it financially viable without $2.5 Million in taxpayer giveaways…maybe they should have come up with a different plan. Perhaps one with more density instead of merely 40 units. This lot is literally steps from both the Metra and Purple Line. The perfect spot for true Transit Oriented Development.
Also crazy that $1 Million of that money would be going to the Affordable Housing Fund. So we would essentially be moving money from the TIF to fund “Affordable Housing” throughout Evanston. Is that really the purpose of the TIF?
Am curious to know what the Main/Dempster Mile people think. What could they do with $2.5 Million in TIF money? What do they think the area needs to really thrive?
Luxury housing?
Hi School,
FWIW, the Census Bureau’s American Community Survey says 29.5 percent of Evanston’s owner-occupied housing units are valued at between $500,000 and $999,999. An additional 6 percent are valued at over $1 million.
The developer says the Custer townhouses are planned to be prices at $650,000 in current market dollars, subject to inflation between now and when they actually go on sale.
So they would be priced toward the lower end of the upper third of the market.
Perhaps that’s “luxury housing” from some vantage points, but more like “upper middle class” from others.
It’s also hard to see how many more units could be placed on this site and meet the city’s parking requirements, unless you switched from a townhouse-style development to a high-rise one — which would require more dramatic variations from the existing zoning.
(None of this is to prejudge whether TIF funds should or shouldn’t be offered.)
— Bill
It’s close to many public
It’s close to many public transit options. They should get a variance for the parking.
Tell developers to “go pound salt”
Why in the world should Evanston taxpayers provide this subsidy?
$2,500,000 is a lot of money.
If the developer needs this to generate an “acceptable return” then City Council should tell them to revise their plans and redo their model.
Just “Say NO” to giving away our money !!
who should pound salt
Yes, $2.5 million is a lot of money. But then again half of that is to cover the city extortion programs of 1 million towards the unneeded affordable housing fund and a 250K commitment for a “public benefit”
Take the extortion dollars out and the developer claims a remaining need for 1.25 million, which I’m sure could be negotiated down a bit. But even if given 1.25 mil the extra r.e. tax income of 11.5 million through 2037 means the city is receiving on average over 600K each and every year of increased property taxes. And that continues well beyond 2037, which is exactly the type of thing a TIF is designed to do.
So the city would get payback of the 1.25 million in basically 2 years and it’s all gravy after that for decades upon decades. Hmm, seems like a pretty great return on investment if you ask me. Wish I could invest 1.25 million and get a guaranteed 50% return of 600K in cash each and every year for the next few decades. Looks like pretty sound business to me that would greatly benefit all taxpayers.
The bigger challenge is to get council to control spending. When a staff member says they are spending millions every year on certain programs with no idea of effectiveness the problem isn’t this development. Someone needs to be told to go pound salt but not sure it’s the developers.
Who would want to look at these things?
Not to be snarky but the rendering reminds me of 1950’s Soviet style cement block construction updated in “Early Menards”.
I pity the people who already live in the area.
These units are actually uglier than the two monstrosities on the 1500 block of Greenleaf that the city rammed through a couple years ago….and are still sitting unsold. (Although the Greenleaf asking price is considerably more.)
Everyone’s a critic…..
I’m a resident of the
I’m a resident of the neighborhood and would love to see some new housing options in the area that are between a condo (where I currently live) and a multimillion dollar home. We’ll be outgrowing our condo soon and worry we’ll have to move out of the neighborhood we love due to the lack of options. This development would help fill that gap.