Downtown covers less than four percent of Evanston’s land area, but houses more than 10 percent of its residents, generates over 21 percent of its sales tax revenue and provides the workplace for 31 percent of its private-sector jobs.

Glum residents
Some Evanstonians aren’t pleased with downtown development.

All those figures are up over the last several years, and a new study of the downtown real estate market discussed at a Plan Commission hearing this week says there’s market demand for more downtown growth in all three categories.

Analysis

That may explain why city officials, scrambling to cure a structural budget deficit and faced with this week’s downgrade of the city’s bond rating, are more eager to continue downtown development than the folks who show up at hearings to complain about it.

Without the addition of an estimated 1,934 new residents downtown this decade, Evanston’s population would have declined by an estimated 630 residents — at a sizable cost to the city’s tax base.

Manufacturing jobs in Evanston, located outside downtown’s boundaries, have continued to shrink — down 50 percent since 2000 to just 1,261 jobs, according to the Illinois Bureau of Employment Security.

Meanwhile jobs in some industries likely to locate downtown — including food service, health care, information and real estate — have increased enough to offset losses in areas like retail trade, finance and insurance.

And, taxable retail sales have increased 25 percent in downtown Evanston over the past six years, while growing only 5 percent in the rest of the city.


Linda Goodman presents the retail market study results at the hearing.

City consultant Linda Goodman said the Goodman Williams Group study of Evanston’s downtown market showed demand over the next 10 years for up to 2,000 new housing units, up to 100,000 square feet of new office space and as much as 120,000 square feet of new retail space.

Overall, she said, the value of the new construction could be as much as $856 million. The property tax on that amount of new construction could cover as much as 9 percent of the city’s current tax levy.

In addition, the study reports that, as housing prices have risen in recent years, condo units — the bulk of the new construction downtown — remain far more affordable than single family homes in Evanston.

The median price of an Evanston condo in 2006 was just half the median price of a detached single family home.

The full downtown market study is available here.
 

Bill Smith is the editor and publisher of Evanston Now.

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9 Comments

  1. The drive for growth
    Bill,
    Thanks for your continuing efforts to keep us all informed. Your continued due diligence gives us more to hear about than the constant opposition that never seems to miss an opportunity to voice its positions for a reduction in growth and development.

    The constant piece that never seems to be addressed by this group is the economic consequences related to their efforts to keep Evanston in their view of the past. The real past (Evanston’s real heyday) had more or about the same visitors to our downtown, on a daily basis than there is now.

    If downtown Evanston is not permitted to expand and grow, or if the Central Street corridor is not permitted to grow, what will the consequences be to our tax base, and our City’s budget. How will shortfalls be made up? How will our credit rating not be reduced further?

    Is the solution to just increase real estate taxes? What will the result of those increases be? Will long time taxpayers no longer be able to pay their taxes? Will the local businesses (that we all say we want) have to relocate because the tax burden is too great. Will the City’s already over burdened departments have to cut back, thus providing us with less services?

    Where is the critical thinking from our “articulate, educated” citizenry? It seem that no one seems too interested in determining the actual costs to all taxpayers of the reduction in potential new growth and development.

    1. growth needs to be balanced
      Ron – I think the down town could have alot more buildings with not alot of impact on anything. But I do not have a trust of the city ability to make certain the cost of the development is not paid by the taxpayers. Maybe Bill could provide more information on the TIFs – it appears to me the council is using some of the TIF funds in ways that are more for operations than to pay them down thus prolong the life? It is interesting the city is saying the money from all these new projects is now only a drop in the bucket as far as preventing large tax increases!

      I I am in favor of more high income residents moving here, but also the city must protect their investments that is not block the views in the buildings that come after. I also think the down town planning has not be all the good – with some of the streetscapes and side walks. I think the cement pavers in the downtown will most likely last 5-10 more years more and most will need replaced at a high expense to the taxpayers. ( another screw up at our expense!)

      I realize alot of the dislike is around the tall building – but cut it in half and build two on two different sites will people still be upset? I can not say.

      Ron there is one thing you may not realize new residents are not here to be just taxed as one council put it – they will help us pay for social services – these people want services ! I found it very interesting recently they organized against the taxation for Evmark. They may end up being the major opposition to growth in tthe downtown since now they are the neighbors of these new projects!

      I would not use development here is the way to save us from high taxes – a better operation of the city is more inorder – since the council will just continue to waste our tax dollars – since they have no motive to work smart!

  2. Thoughts on some numbers from the Market analysis
    Bill – lets say the city adds the 2000 new condo units over 10 ten years- and the tax on each unit is $8,000. – `$16,000,000 – city takes about 20%- that amounts to about $3.2 million less than a average increase in the city budget for one year!
    the consultant says this will be about 9% of the general fund- really? The city might up the general fund this year alone $3 million to pay for the pension problems!

    I am having alittle trouble seeing how this development is going to help my taxes? Ofcourse this is not counting the fact we taxpayers might pay for some of this in TIFS?

    1. A $50 million error
      Hi Junad,

      The story said: “The property tax on that amount of new construction could cover as much as 9 percent of the city’s current tax levy.”

      You then suggest the consultant is lying and assert the new revenue would not be 9 percent of the city’s general fund.

      Of course not. The property tax levy is about $35 million. The total general fund budget is about $86 million. The consultant said 9 percent of $35 million. So that’s a $50+ million error on your part.

      Was that just careless reading, or an intentional use of misinformation to raise a smokescreen of doubt about a possible partial solution to the city’s revenue needs?

      If you’re looking for a single silver bullet that will solve all the city’s budget problems, I think your search will be in vain. But please don’t distort the facts about things that might be part of the solution. We’re likely to need most, if not all, of the partial solutions we can find.

      — Bill

      1. No $50M error
        Bill – 9% of the 35 million is about 3.15 million and I said $3.2 million with my estimate – thus my number and the consultants are not much different – it is clear the number does not do much when compared to the total general fund – or even the total city budget.

        Bill I do not try to misinform anyone – I think you need to do future analysis of the development – I am not against it but I do not think it is the great solution that some are proposing.

        1. Misinformation?
          Bill, Junad,

          Your discussions do not include the potential costs of new development and growth, which are many. Despite what the new tax revenue ends up being, the city will have to deal with more demands on city services. If a new skyscraper is built, will the Department of Homeland Security require the city to beef up our police department and fire department? Are we going to have to fund a swat team? What about demands on streets and schools? What about more pollution? Why did the consultants remain absolutely quite on these critical issues. Once we figure out what the expected tax revenue will be, we also need to deduct the costs of growth. This is not an easy thing to project but to leave it out of the analysis is folly, if not disinformation. Why not criticize the developers for leaving these costs out of the equation?

          1. Condo SWAT teams
            Hi Peter,

            Don’t know whether you’re aware, but the police and fire department both have representatives on the city staff committee that holds a public meeting to review each planned development project before it gets to the Plan Commission.

            Given the natural bureaucratic impulse to increase staffing levels, I’m moderately confident that they would be happy to speak up if a they thought a new 218-unit condo development like the proposed Fountain Square tower — or a combination of other possible developments — would require a new police SWAT team to handle the crime they were expected to generate. Same goes for other added city expenses you suggest.

            But why don’t you send an e-mail to the chiefs of each of those departments and see what their response is. Then please do share it with us.

            The questions about streets and schools I think have already been answered at various public hearings held so far.

            — Bill

          2. Response
            Bill,

            I’m not the person who was hired by the city at a cost of almost $250,000 to look at the pros and cons of a development plan. I’m also not a journalist who should be digging into the truth. Maybe they haven’t considered that if a skyscraper is built and ends up on a Homeland Security List of possible terrorist targets, the city will have to do something about it.

            While the demands on city services like schools, roads, traffic, congestion, pollution, have been raised at public hearings, the consultants have no real answers to these questions, except for a meager study on parking.

  3. RE: Downtown property tax
    $8000 property tax + $400 monthly assessments ($4800 annually) + $1888 monthly mortgage on a $350 K (6% Annual Interest Rate on 30 year loan, 10% down) + ETHS and other Evanston Public schools = Potential downtown residents (Target customers) moving elsewhere.

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