With one big new development project approved this week in Evanston, another up for approval later in the month, and a third scheduled to break ground next week — here’s a look at how such projects impact everybody else’s property tax bill.
Community Development Director Mark Muenzer says the construction cost estimates for 1571 Maple Ave. approved this week and 1620 Central St. up for approval later this month haven’t been finalized yet, but the project breaking ground next week at 835 Chicago Ave. is expected to cost $32 million to build.
Assistant City Manager Marty Lyons says a $32 million rental project can be expected to generate nearly $762,000 in annual property tax revenue to local governments, once it’s fully occupied.
To do the math to make such an estimate, Lyons says, you take the property value times the 10 percent assessment level times the current 2.80 state equalization multiplier times the current 8.5 percent tax rate.
How big is $762,000? Well it’s about 0.4 percent of the entire amount raised by all local governments from property taxes in Evanston last year.
The values for some other recently-completed projects:
- $13.8 million for the 80-unit Central Station development 1700 Central St.
- $15 million for the 63-unit addition to The Merion at 1619 Chicago Ave.
- $16.2 million for the 114-room hotel under construction at 1515 Chicago Ave.
Those four project together knock about one percent off the average property tax bill citywide.
But despite all this new construction, my property tax bill hasn’t decreased, you say?
Well the bad news is that with the downturn in the real estate market over the past several years the value of all properties in town has been declining. Lyons says it dropped from $2.5 billion to $2.2 billion just last year. That means governments have to tax at higher rates to take in the same amount of revenue.
So, the addition of new projects is reducing, but not eliminating the overall decline in values. And if the value of your property has declined less than the average amount — your tax bill has gone up
Lyons says he’s hoping that — with the gradual recovery of the real estate market — the total value of property in town may start to rise again this year.