Schools, religious groups and other tax-exempt entities are once again the object of political wrath in Evanston.

Some aldermen are pushing to deny such groups zoning changes if they don’t cough up payments in lieu of taxes. And Wednesday night the Plan Commission voted to deny a religious school’s rezoning request because it would take a former industrial building that’s been vacant for seven years off the tax roles.

So, does Evanston suffer under a uniquely heavy burden of tax exempt properties? And are we being deluged with an invading horde of free-loading do-gooders?

Us versus the neighbors

The answer to the uniquely heavy burden question appears to be no. In 2005 the city’s planning division reported on the proportion of tax exempt land here and in some nearby communities.

In Evanston 44.5 percent of the land was tax exempt. That’s a little more than in Skokie, where the tax exempt percentage is 41.5 percent, and a little less than in Wilmette, where the exempt percentage is 47 percent. (Oak Park, the other community studied, got off easy with only 29 percent of its land tax exempt.)

And of all the tax exempt land in Evanston, three quarters consists of publicly-owned streets, alleys and parks. Only 10.5 percent of the property in Evanston is owned by private tax-exempt entities. About half of that is owned by Northwestern University.

Recent trends

I’ve asked City Planning Director Dennis Marino for information about what changes there’ve been in tax exempt land here since 2005, and hope to get a more comprehensive list soon. But just off-hand we recalled the following changes:

No longer tax exempt

  • Kendall College’s 3.5 acre campus is being returned to the tax rolls after it was bought by a private developer.
  • The less than an acre of National Louis University’s campus in Evanston is being returned to the tax rolls after it was bought by a private developer.
  • The former church on a small lot at 1044 Elmwood Ave. is back on the tax rolls after it was converted to a single family home.

Becoming tax exempt

  • The former office building at 1620 Central St. is being taken off the tax rolls to become the new home of the PACE program run by National Louis.

Swaps in the works

  • The Salvation Army plans to move to a former industrial building at 2425 Oakton St., but plans to sell its current building near downtown, likely for a mixed-use commercial and residential development that would be on the tax rolls.
  • Roycemore School is planning to move from property it leases from tax-exempt Northwestern University to a building now occupied by the tax-exempt Methodist Pension Board, which is moving to Glenview. (The fate of the board’s other Evanston building is not yet determined.)

What other developments in 2005 or later involving privately-owned, tax-exempt land do you recall?

(No, the 1800 Sherman Ave. purchase by Northwestern University doesn’t count. It happened in 2004.)

Once we’ve got a full list we’ll be better able to tell whether we’re being invaded.

Bill Smith is the editor and publisher of Evanston Now.

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13 Comments

  1. another conversion from tax exempt
    What about the conversion/sale of the Covenant Methodist church?

    Reply:
    Good addition. That project started in 2005, but wasn’t finished until 2007. Former church building at 2133 Harrison St. was demolished and replaced with seven townhouses.
    — Bill

  2. What about the storefront churches on Howard?
    I believe there are now three, possibly four in the 700 block of Howard. I wonder how many recent storefront churches there are in the City.

    More importantly, how much industrial space do we have in Evanston as compared to those other municipalities?

    Find out more about Brummel Park Neighbors and Michele Hays

    1. Industrial space
      Hi Michele,

      The 2005 study combined office, retail and industrial space into a single “commercial” category.

      The share of land in each town zoned commercial: 11 percent for Evanston, 12 percent for Oak Park, 19.2 percent for Skokie and 3 percent for Wilmette.

      If you’ve driven west along Oakton or Howard recently you’ve probably noticed that Skokie has a serious problem with vacant and underutilized industrial space.

      Just because you have it doesn’t mean there’s a market for it.

      Bill

      1. Just because land is vacant doesn’t mean it’s tax-free
        I’ve noticed that Skokie has considerably more industrial area than we do: while I have no statistics to back this up, but I’d be interested to see if industrial areas generate tax income without using as many resources (depending, of course, on whether hazardous materials are used.)

        For a journalist, it sure seems like you have you have a horse in this race, Bill.

        Find out more about Brummel Park Neighbors and Michele Hays

        1. Horse in race
          Hi Michele,

          I’m interested in exploring the issues and challenging conventional wisdom.

          If that’s a horse, I’m riding it.

          Industrial property — when it’s in use — is generally thought to be economically beneficial because it pays real estate taxes without adding children to the community’s school system.

          But it also can have a blighting impact on surrounding areas because of noise, odors and other forms of pollution.

          Vacant industrial property generates minimal tax revenue and is almost always a blighting influence on surrounding areas.

          Bill

    2. Storefront churches
      Hi Michele,

      If you know the addresses of the buildings you’re concerned about, you can find the answer to your questions yourself.

      Click on the Tax Parcels link on the main Maps page of the city web site.

      Type in the address and hit Submit.

      Under “County Info” in the lower left of the results page you’ll see whether the property is still on the tax rolls (see if it has an assessed value listed).

      You can click on the “Run Recorder’s Report” link and learn when the ownership last changed and who the current owner is.

      Note the parcel’s PIN number and go to the county treasurer’s web site and find out whether the current year’s tax bill has been paid and the address to which the tax bill was sent.

      Let us know what you learn and we can add any new ones to the list.

      Bill

  3. Tax Exempt properties
    For many years after we first moved to Evanston (in 1959) Evanston proudly sold itself as the “Headquarters City” and worked to attract as many as it could–some of which did purchase real estate instead of renting. I actually never heard any word that this goal was phased out.

    If only 10+% of the total land off the tax rolls is non-city, what can there really be complaints about?

    There is benefit from having outstanding nationally known, even though tax exempt, institutions and organizations as neighbors. Their non-Evanston and Evanston employees help stoke our economic engine expanding our sales tax money and property taxes when they move here.

  4. This seems simplistic
    Bill, thanks for digging and doing an interesting article. I’m no expert in this, but it raises some questions and issues. First, I know that Northwestern U. as a landlord does a very poor job of paying Evanston the taxes due on taxable lessors of its properties. So, here it deprives the city of revenue. Also, the exclusion of the office building NU purchased will be a major tax loss to the city.

    Second, does this tax exempt total include the entire NU campus and Dyche Stadium, or only non-campus properties owned by the university? Third, many of the properties owned by NU, especially the large homes provided as perks to professors and NU executives, would be prime tax generators – far in excess of their property size because of their prime locations. Fourth, Evanston can’t offset tax-exempt properties with the business and industrial that Skokie has, or the same amount of high-value residential property as in Wilmette or other suburbs.

    Finally, I would wager that Evanston’s major tax exempt properties cause much more of a drain on city services that must be covered by taxpayers. Do other municipalities have to pay for special biohazard response teams and equipment because of NU’s labs? Do other towns have two major hospitals and a university that lead to faster infrastructure degradation? Light-use facilities like churches and music centers require far less support. How many police and fire calls alone are related to Evanston’s tax-exempt institutions versus the number related to other towns’ tax exempt properties? Who pays for the more intensive police and fire protection required by large institutions and the tax-exempt properties like houses, dormitories and office buildings they own? Not the not-for-profits.

    I believe it’s safe to say that not all tax-exempt property is equal. I’d like to see an analysis of the residual costs related to tax exempt properties, not just the percentage of tax-exempt acreage.

    1. Leasehold taxes
      Hi Tad,
      Could you please clarify what properties you are referring to when you say “Northwestern U. as a landlord does a very poor job of paying Evanston the taxes due on taxable lessors of its properties.”?

      Most people seem to be talking about 1800 Sherman when they make comments like that. I have spent considerable time researching this issue and have learned that all but a small fraction of the leasehold taxes due have been paid.

      You could determine that yourself by starting at the city’s GIS mapping page, typing in 1800 Sherman and then tracking payments on the tax parcels that are displayed.

      I believe you have experience in real estate, right? Then you should be familiar with the process.

      Also, under state law it is not the university’s responsibility to pay the leasehold taxes. The taxes are billed by the county and paid to the county by the tenants. The university’s only responsibility is to let the county know what parcels it has leased out to taxable entities.

      Bill

    2. University land
      Hi Tad,
      The figures cited are for the entire city including the campus.
      If you doubt it, please complete this simple exercise.
      Go to the city web site mapping page.
      Click on the “Advanced tools” link.
      Select the “Measure area” icon.
      Use your mouse to mark your best estimate of the boundaries of the campus.
      Write down the total that appears under “Area” in the left column.
      Clear the points (the button’s at the bottom of the left column).
      Repeat the process to get the area of the whole city.
      Divide the area of the campus into the area of the city. It will be around 5 percent.
      Bill

    3. Tax-free homes for university officials
      Hi Tad,
      I think the university should stop providing tax exempt housing for a select few of its favored employees.
      The practice costs the school far more in community good will than it saves in taxes.
      But the city is powerless to force the university to change that practice, given the terms of the charter granted by the state over 150 years ago.
      And nothing in the current proposals to penalize tax exempt groups seeking zoning changes would address the issue. If it buys a single family home, the university doesn’t need a zoning change to house one of its officials in that home.
      Bill

    4. Drain on resources
      Hi Tad,
      I don’t gamble, but I think you’re making a risky wager that our tax exempt properties cause a bigger drain on city services than the tax exempt properties in other communities.

      Two data points:

      1. If you look at the Skokie fire department website, you’ll see that they have their own hazardous materials team. You can’t have a lot of industrial properties, like Skokie does, without facing hazardous material risks.

      2. You are undoubtedly aware that Northwestern has its own police force. So, at least on that front, NU spends sizable bucks to cover a public service cost.

      This is a more complex question than can be answered here. And it would be great to get more data about it.

      Bill

    5. Analysis of residual costs – bring it on!
      Tad Gage wrote:

      I believe it’s safe to say that not all tax-exempt property is equal. I’d like to see an analysis of the residual costs related to tax exempt properties, not just the percentage of tax-exempt acreage.

      I would like to see this kind of analysis done, too. If it is done fairly (i.e., not by the same people who put together the ECRD ‘analysis’ showing that a rundown 2-floor building generates more income than a 38 floor tower), it would have to include all of the revenue brought in by NU.

      1. Why does Evanston have 3 hotels? Does the Dawes House attract that many tourists?
      2. What about all the students, who live in rental properties that are taxable, and mostly have no kids in school?
      3. How many restaurants would go under if football, basketball, conferences, students, other NU-related business were not here?

      More from Tad:

      . Do other municipalities have to pay for special biohazard response teams and equipment because of NU’s labs?

      I wonder about this claim too. I think most of the serious biohazard stuff at NU takes place on their medical campus (Streeterville, not Evanston). Also, the two hospitals in the city (neither of which are NU-affiliated) probably generate more hazardous waste than anything that takes place in the Tech building.

      Let’s see that analysis!

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