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The promoter of the planned Grace Music Theater in downtown Evanston plans to pitch the city’s Economic Development Committee next week for funding to help get the project off the ground.

David Colker tells the Evanston RoundTable he’s only been able to raise about a third of the $20 million needed for the project.

He says he needs the city to provide “short-term, post-construction bridge debt financing” until the venue can develop a track record to be able to refinance its debt with lenders or additional equity partners.

He says the loan would be secured by the property itself.

Top: A preliminary sketch for the exterior of the Grace Music Theater. Above: a floor plan for the theater and adjoining recording studio.

Colker, who has an option to purchase the property that runs out at the end of the year, won zoning approval two years ago for the project, which envisions building a 45-foot high, 500-seat music venue on the property that now houses Tom Thumb Hobby & Crafts at 1026 Davis St. and combining it with the recording studio property that already exists next door.

The proposed theater site is now occupied by a hobby shop.

Alderman Don Wilson, whose 4th Ward includes the site, told the RoundTable he’s opposed to spending city money on the project.

“Other music venues are doing well on their own without city money,” Wilson said.


Update 11:15 p.m. 6/20/13: The Economic Development Committee is scheduled to meet at 7:30 p.m . Wednesday at Now We’re Cookin’, 1601 Payne St. Unit C, and the Grace Music Theater is not on the committee’s agenda, which was published this evening.


Related stories

Colker requests city help for Grace Music Theater (Evanston RoundTable)

Music theater wins zoning approval

Evanston music theater plan clears initial hurdle

Music theater planned for Davis downtown

Bill Smith is the editor and publisher of Evanston Now.

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21 Comments

  1. Evanston handouts….

    Evanston handouts are getting to be so well known that it is rare a business entertains coming to town without asking for taxpayer dollars.  

    A big thank you to Don Wilson for his opposition to spending Evanston revenues on this project.  It is not this project that I am speaking against, but any project that comes our way with hat in hand asking for money.

    If/when we have money to burn, instead of our long line of handouts to business, we should pay extra on our pension burden. Until we have some level of control on the pensions, there should be a moratorium on cash handouts.

  2. Please stop funding businesses.

    If I wanted to invest in a business I would give them money directly. And that would be through purchasing their products AFTER they open.

    1. Little Children spending and the Council

      The way the Council spends money reminds me how a little child might take money from the parents wallets and load-up on candy, while the family is on the brink of starving and bankruptcy.

      In our case the Council thinks money will always come from 'somewhere' [like a tree of money or 'free' money from some government but no one wll get taxed to pay for that money] and so they can pick causes "THEY LIKE" and those they think will be 'winners' [or they will make winners].

      Let the consumers vote with their wallets—not the Council taking from our wallets and spending at THEY think taxpayers should.

      Maybe current home owners have no choice but to pay, or sell for less than they want, but all these new condos/apartments need people who want to pay—and they, including new NU grads—can go elsewhere and leave those stuck here with the bills.

  3. Why support for Grace makes sense

    While city resources are tight and there are a lot of financial challenges as well as needy causes that deserve support – it is important for the city to show support for new initiatives that will add to our growing reputation of a strong and vibrant social destination. We have a great base of restraunts, a very popular movie theater, but limited entertainment opportunities downtown.

    Given the stated goals of Grace, that being a world-class music venue attracting top-end artists, support of this project would go a long way to expanding the reputation of Evanston as an attractive destination to live, work and play.

  4. Support for Grace

    All new businesses need funding – some more than others.  While not all new businesses should qualify for city funding, Grace makes a compelling case.  

     -Ticket prices will be substanstially higher than other musical venue, providing greater tax revenue for the city.

    – Evanston will become (even more of) a cultural attraction and destination

    – Patrons coming to Grace will inevitably buy dinner before the show and likely drinks after, thus supporting Evanston bars and restaurants.  And to those who say we need no more people wandering the street after imbibing, please remember these tickets will overwhelmingly be sold to more affluent and older patrons, less likely to make a ruckus once they leave.

    We certainly bend over backwards to support Northwestern who does little financially for the city once you factor in all the buildings they buy and take off our tax rolls.

  5. How Sweet the Sound (Could Be)

    The Grace Music Theater would be fantastic for Evanston, as it would maintain the spectacular momentum that we have enjoyed in recent years in the music, fine dining & craft beverage realm. Add Grace to SPACE and 27 Live, and Evanston can become a music destination for fans of major artists of all genres. Add the Cellar, Ward Eight, Found & Farmhouse (and many others, of course) to the Few Spirits distillery and the three new brewery projects–Smylie Brothers, Temperance & Peckish Pig–and pretty soon, Evanston becomes THE place for innovative places to visit. It's a great tie-in with the city's plans to name an Arts Tsar (czar?).

    David is a great friend of mine, and I know that he has poured countless hours and plenty of his own money into this project (not to mention pledging even more, along with millions of dollars in private investment into Evanston). He is not looking for a handout, but is seeking a loan that would be a true public/private partnership that would place another sparkling gem right in our midst.

    Just imagine walking to Davis Street to see one of your musical heroes. This is what David wishes to bring to all of us.

    1. Let Grace get a loan from a bank

      It would be wonderful to have another music venue in town. However, I do not want to help finance it with my tax dollars, especially when the city can not even afford to maintain the buildings it currently owns (i.e. Hadley Mansion).

      David may be a wonderful man who works hard and pledges his own money.   My family also works hard for our money, and we do not want this money to be taken and pledged to build out another privately held business.  

      If the idea will make money, a bank can give David a loan.  If a bank is not willing to give him loan, perhaps the idea is not good enough to bring in money.   If the city's goal with financing business is economic development, as the aldermen say it is, then the city also expects back money. If they do not expect a return, then it is a handout that we can not afford.

        If the business can not make money, it will close. Then the city is left with an empty storefront and huge bills. 

      Good luck to David. and Good luck to us taxpayers.  Thank you Don Wilson for saying no.  

       

      1. Bogus economic arguments

        Jen, regardless of how you feel about the City supporting certain businesses (like Peckish , or theaters, or whatever),   your analysis here is wrong:

        "It would be wonderful to have another music venue in town. However, I do not want to help finance it with my tax dollars, especially when the city can not even afford to maintain the buildings it currently owns (i.e. Hadley Mansion)."

        It is not at all clear  (or the goal) that the City will  lose money on this transaction.  The City is providing a short-term, secured loan (let's have our lawyers make sure that the City is covered).  The City could break even or even profit from this loan, since the City can borrow at lower rates than Grace can.

        With the Harley-Clarke mansion, on the other hand, the City would be spending money – millions  – for upkeep of the mansion, with NO chance of recovering any of it.

        Whether you think that it is wise  for the City to engage in supporting businesses is a legitimate question.   But the linkage of the Harley-Clarke mansion to Grace is not legitimate.  One  (Harley Clarke) is an expense, with no chance of any return on investment.  The other – whether you agree with it or not – is an investment, with a possibility of return  (and yes, a possibility of loss).

        If you are the same Jen who has been publishing Austrian/Randian economic nonsense on this site, this demonstrates the problem with the whole  Gold Standard/Balanced Budget/anti-Keynesian crowd.  Long term (or short term) investment is different than waste.

        I suppose you would say that I should not take out a loan to attend Harvard Medical School or to get a certificate in Air Conditioning repair at Oakton, since I don't have enough money now to buy a Mercedes.  After all, I might not make enough money as a physician or air conditioning tech to pay back my loans.

        The same faulty short-term arguments have been used to justifying repairing the decrepit Civic Center, or preventing the construction of the tower at 708 Church, or the loan for Ward 8.

        1. Economic argument

          I agree to an extent, so many people in Evanston don 't understand the difference between an investment that has long term positive returns and the "spending" of money.  When you hear the arguments against the Gordon foods or the Trader Joes you know these folks have no idea.  Their thinking coupled with those of the NIMBYS has been the type of thinking that ruled Evanston for so long, much to our detriment. 

          Thankfully that changed awhile ago and Evanston became more pro investment and pro development, much to taxpayer benefit.  Imagine if we didn't make those investments how much higher the tax bills would be.

          Problem with this project is it isn't quite the same as most other TIFs, and it doesn't have anywhere near the payback provided by say the high density Sherman Avenue or Washington National TIFs.  I'm not saying I'm against it but there are legitimate concerns here.

          Because of the specialized single use of the project, if it goes bust, the City sits with 16 million of debt collatoralized against a building and buildout that would then have little or no value to anyone else.  Downtown TIFs are protected by density and mixed use, adaptable buildings.  One business goes bust, others are still there, new ones come in. One resident goes bust, resell. 

          Plus I wonder if the incremental increases in r.e. taxes would even be enough to pay the bond float. This goes bust, then what? We just keep paying debt and get one very, very expensive building difficult to readapt, that is real risk.

          But then again, the City goes on about being supportive of "Arts" and pays to have white papers drawn up for consideration of 50+ million dollar theatre buildouts.  This makes more sense than any of that.

          1. Taxpayer benefit?

            This is the city budget in 2008.  Proposed expenditures of $213,673,621.

            This is the city budget in 2013:  Proposed expenditures of $248,034,384 

            Property taxes are up 11%. The city also charges extra now for garbage pick-up. The library also levies it's own tax unlike in 2008.

            Last year alone, the city spent $10 million in economic development.

            Why do you believe the taxpayers are better off due to the recent "investments"?

             Where is the city's portfolio of  net profits and losses from investments such as the facade improvement, loans to Gordon Foods, or any of the other numerous grants and loans? 

            Where's the data to support your belief? 

             

             

             

             

             

             

          2. Taxpayers do benefit

            First off, the fact that the city spends, or overspends, is a different discussion than how to generate revenue.

            Anyone can spend but those who invest in long term cash generating investments ultimately get to spend more, invest more, grow more and provide more, than those who don't build cash generating investments.  As true for individuals as it is for cities.   

            At any rate, by your own post, spending by the city rose by over 16% yet the property tax bill went up by only 11%   It's much more complicated than that but the payback in support of commercial development and dense residential development virtually always pays back in the form of long term overall residential tax relief. 

            Just ask the school disctricts what the retirement of a tif that was used to build a for profit development did for their budget and how that directly related to your tax bill and the services (spending) they can provide.  

            If you cannot figure out the extreme postive cash flow generated by the likes of a Gordons Foods deal then you either have no conception of how things work or you simply can't do simple math.  The benefits are obvious, simple and very, very long lasting. 

            I agree this project may be different, but at the least, worth a discussion and not summary dismissal.

          3. Additional fees and additional tax levies not included in 11%

            Please enlighten me on how things work by providing a PNL statement on net investments. Perhaps broken into 1 year, 5 year , and 10 year investments. 

             

             

          4. Enlighten yourself

            Go ask the school district how the subsidy (TIF) investment for a for profit venture paid off to their benefit, the childrens, and your tax bill.  Ditto for the City, parks, and services of every nature.  The city has released that information, you should read it. 

            The gordons deal was very public, as they all are, and must be a year old by now.  Go see what "we" invested in that for profit venture, then look at how much we will now collect in r.e. taxes, sales taxes, business license fees, etc etc etc.  (not to mention jobs created)

            Now compare that to what we collected in taxes from that location before the project, then add on the cost of the "investment" that you so compalin about.

            Then do the simple math, the payback is huge and will be ongoing every year, after year after year.  Repeat

        2. Agreed — money not exactly the same

          I agree that the money funding the mansion and Grace is not exactly the same.   The art center, as well as other park district services in town are Not For Profit.  They offer services at reduced prices to all citizens, as well as provide free services to those who can not pay.   I have no problem paying taxes to provide Not for Profit services to members of our community.

           Grace Theater, Peckish One, etc. are FOR PROFIT places.  

          I have no problem with people  or for profit entities taking out loans from banks. Banks are in the business of calculating risk, and  accept the downside when they give out bad loans (albeit, sadly this no longer seem to be the case in America).   I do not feel that the city should be giving out loans to for profit entities, especially when banks have calculated that it's too risky.   

           This is risking all our money, and risking the ability of paying for the current not-for profit services in town.  Considering the current financial health of our city, I do not think that we are in the position to take such risks.

  6. amazing business

    It is amazing how many people want to do business in Evamston that have insufficient funding to make their business successful. If the banks do not have faith in the business plans, why should the Evanston city council? Maybe the city council should require the new business to provide a list of the financial institutions that have refused loans and ask the finance companies why they thought it was too risky. Why should the taxpayers always be on the hook for the risky businesses. Why does the mayor, the city council, and Wally feel that nobody will do business in Evanston unless we finance them? Do you think that it might be the high taxes?

  7. I prefer Tom Thumb

    One of the most interesting stores in downtown Evanston is the unique Tom Thumb craft store.  I would hate to see it replaced for another musical venue, which we have galore.  The city should not subsidize the slaughter of small independent business.

    1. Independent business slaughtered?

      Gee, ya think Tom Thumb is being forced to sell, or maybe they would like to cash out and retire or do something else.  What is this nonsense about slaughter of small independent business. 

      And while this proposal looks like a huge stretch and may or may not have any merit, it is also a long time Evanston independent owner/operator.  Really, get a clue.

  8. Thank you Don Wilson

    Don, Thank you for your concern for Evanston taxpayers. I agree with you that City of Evanston tax dollars should not be used to finance this private business. Understandably, people will ask the City for money. Why not? You get access to cheap capital and the entrepreneur can put some of the risk on the City of Evanston's balance sheet. It's a smart financing strategy for a business owner.

    However, is it fair to other businesses such as SPACE et al that the City is subsidizing new competition?

    Also, if this is such a great idea, why has David Colker only been able to raise one third of the $20mm needed to fund this project? Hopefully this Evanston Now article will raise awareness of this project and interested people will invest and fund the business.

    I agree that Grace Music Theater would enhance the music scene in Evanston. I hope it succeeds.

    I just want it to be funded privately.

    The City of Evanston can be supportive of Grace Music Theater via expediting the approval process and making sure permits are granted in a timely manner, and helping profile the organization via the City's social media efforts.

    Taxpayer money should not be used for this project.

  9. Alderman need to take a broader view

    I also agree with Don Wilson's view of the project and the funding request that may soon flood into the Council. Sadly the various approvals of funds for every project that seems to arrive to Civic Center has created the precedent or, at a minimum, the perception, that money will be doled out with few questions asked as to viability.  The Howard Street theater was an example of the money ready for doling out until someone recognized that the numbers did not seem to work

    Now, as others have pointed out as to the Grace project, we have a project of immense scale, far greater in dollars than Howard or even Piven, with little real funding and the (seemingly) desperate need for City funds to create a semblance of viability when going back to the banks or other lenders.

    As has been asked already, where are the banks that rejected the scheme and why?  Did they question the project and are we now facing someone who want to leverage his project by creating the appearance that City approval implies that the project is viable. Has City staff done the same level of due diligience as have banks in this instance? One doubts how well they look at the books or pro formae given the Howard Street project or even Piven's plans.

    It would appear that if you add such words to your project (either in the name or just below), "art" "theater" "performance", etc.,  someone at the Civic Center will immediately begin drooling at the mouth, genuflect and run to the closet for a bag of money. Does any there step back an look at the larger picture?

    As to those who have already come to the defense of Grace or in support, they should consider that this may be a "zero-sum" game and that another theater, and another theater and another dinner-theater, much like Space, etc. may only reduce everyone's share of the pie and that even the figures being projected by proponents might shrink with each new venue.

    Of course, for the taxpayers, each new venue appears to shrink our funds or, conversely, portend increases in our taxes rather than new sources of frunds.

    By the way, truth be told, I also like Tom Thumb and agree with the writer who supported funding and supporting those businesses who did it on their own and suffer each time a subsidized venture arrives on the scene.

    Finally, why not ask the Grace developer to invite Piven to move to this site and "kill two birds with one stone". The space seems adequate, there are, based on the plan shown, green rooms and all those items that Piven wants to build and even a food venue. Funds get merged and maybe Noyes reverts back to being a place for small-scale artists and performers struggling to remain in Evanston.  After all, was that not the premise behind the Evanston-Northwestern incubators in the Research Park. Well maybe Piven has grown to the point of going out into the real world and no longer in need of our help.

     

  10. Public officials and businesses

    While I have no significant questions about the qualifications of Evanston's public officicials to define policies and regulations to promote investment in Evanston, I am not convinced of their ability to be partners in dubious business ventures of all kinds. Aldermen and major, acting on our behalf should stay away from studying and evaluating business plans for viability. Even if they are inclined to invest our scarce and precious tax-payer dollars in private enterprises, the rules should be stringent and clear, asking potential business people for some minimum secured funds before Evanston could even consider each case (a 70% secure funding from other sources sounds reasonable to me, but again, I am no business man). Like someone sensibly asked before, why are not traditional banks backing such great business plans?

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