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Members of Evanston’s Economic Development Committee balked Wednesday night at a request for $800,000 in city grants for a proposed new Culver’s restaurant on Howard Street.

Culver’s franchisee Guy Hollis said he expected it to cost $2.8 million to build the restaurant here, $800,000 more than it cost to build the newest of his five existing Culver’s outlets, in Evergreen Park..

But when asked to explain why the store here would cost more, he offered few details, other than that he anticipated a $150,000 expense to remove contaminated soil from the site and a claim that construction costs are higher here.

He also argued that traffic on Howard Street is substantially less than at his other locations, and some residents of the area “may not be able to eat some of our products” because of their religious beliefs.

For those reasons, he said, he anticipates that the business will only generate average revenue for a Culver’s location — about $1.8 million a year.

Alderman Melissa Wynne, 3rd Ward, said, “I certainly love soft ice cream as much as anyone else,” but that she was surprised by the amount of aid Hollis was requesting from the city.

“It’s a very high number,” Wynne said, given that the business is only anticipated to provide $36,000 in annual sales tax revenue to the city.

Even Alderman Ann Rainey, whose 8th Ward includes the site and who has been cheering the potential arrival of the popular restaurant chain in town, said there’s a need to “value engineer” the project “to whittle that [city aid level] down a little.”

A twilight view of a Culver’s included in the restaurant proposal to the committee.

Rainey suggested the city should consider the added property tax revenue the business would generate from what’s been a vacant lot for over two decades — although the Culver’s owners also plan to ask for property tax relief from the county that would dramatically reduce the tax on the land for 12 years.

Rainey also suggested considering the new jobs the restaurant would create.

Hollis said the Culver’s would hire a total of about 50 people, adding up to about 25 full-time-equivalent positions and an annual payroll “north of $500,000.”

Alderman Jane Grover, 7th Ward, said, “My teenage sons tell me to make this happen at any cost.”

But she suggested that aid from the soon-to-expire Howard-Hartrey tax increment financing district, which Hollis suggested as the source of the city help, was mainly appropriate to address infrastructure issues — like the contaminated soil.

Hollis said that without the city aid the project would only generate an unacceptably low 3 to 4 percent return on investment.

“If we can’t get a fair return here, we’ll have to find another site with much more traffic,” he said.

The committee directed the city’s economic development staff to work with the developer to come up with a revised proposal for the committee’s next meeting on Aug. 27.

Bill Smith is the editor and publisher of Evanston Now.

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6 Comments

  1. Franchise Owner Says It All

    If he can't make the kind of profit he wants and is unclear the demographics are strong why should taxpayers support an iffy venture?

  2. Although Culver’s restaurants

    Although Culver's restaurants are pretty much the cream of the crop in fast food, the economic development committee is making the correct decision. It is too bad they started the senseless handouts when they paid for a tiny 2 million dollar parking lot for a third of a real grocery store on Chicago Ave.

    Businesses that want to open in Evanston are doing it to make a profit and should not factor in the famous Evanston handouts when making a business decision. Every time City Hall gives away the taxpayer's money, the taxpayer has to pay more to make up the difference.

  3. Not a viable Business

    He just stated that this might not be a viable business for him, based on other Culvers. Perhaps Evanston does not have the demographics to support this restaurant.  I for one will not eat at a Culver's whether it is on Howard St., or elsewhere.  Furthermore, Evanston has more than enough restaurants and fast food places.  Please don't use my hard earned tax dollars for this establishment.

  4. Preposterous

    It's absurd that the City is even entertaining the possibility of a subsidy to build a Culver's. We have plenty of options for burgers and fries in Evanston, and even if we didn't, the City doesn't need to subsidize this business's profits. The jobs argument is a red herring. If there's demand for a Culver's in this area, a Culver's will be built on an appropriate site, be it in Evanston, Chicago, Skokie, or where ever. And the same people will be employees whether it's in Evanston, Chicago, Skokie or where ever. Property taxes are also a weak argument not only because the owner intends to seek tax relief, but because the amount of taxes the City collects is fixed by the levy, not by the value of properties. Another business would just reduce everyone else's taxes by a tiny amount. And I can't even believe the guy would say that some people can't eat their products because of their religious beliefs. Then don't build it! Are we going to start subsidizing businesses that can't make a profit because some people won't patronize the business due to religious beliefs? Let's subsidize a few cigarette companies to open shop in town. It's so hard to sell cigarettes these days, what with the high taxes and all. How many calories in a butter burger, fries, and a shake? And what about the City Council's love of "transit oriented" development. You're telling me everyone's walking or taking the bus to get their butter burgers?

  5. Please No City Help for Culver’s

    As a longtime Evanston resident and taxpayer, I object to using taxpayer funds to support a franchise restaurant chain. First, Evanston doesn't need another restaurant of any sort; the town is on restaurant overload. Second, taxpayer funds should not be used to subsidize a franchise business. Let the franchiser help the franchisee if need be. Third, it is not the purpose of taxpayer funds to increase the potential profit of any franchise business. If Guy Hollis can't make the kind of profit he anticipates at his other stores – what kind of business person opens a new location where he already knows he isn't going to be as successful as he has been at other locations?  Is he going to use his potential losses to reduce the taxes owed on his more successful locations, thereby using his Evanston franchise as his 'loss leader'?  Fourth, Evanston has not subsidized other franchise burger places such as Five Guys, Steak and Shake, McDonalds, and Burger King – so how is it that Culver's should be an exception?  Fifth, among those paying taxes in Evanston are the numerous existing independent restaurants including the burger places I have listed in # 4.  Why should these businesses' tax dollars be used to support a competitor?

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