ANALYSIS: I’ve been trying to make sense of the Civic Center controversy, and I think I saw the light after Thursday night’s cablecast debate.

The debate so far has focused on the existing Civic Center. But it’s really a debate about what to do with at least three properties — the current site and at least two hypothetical models of where a new Civic Center might be built.

It’s hard to focus on the future sites because they are hypothetical, unlike the building that now houses city offices. But they are out there.

We’re really debating what is the best use for each property and the best way to pay for the development of each one.

Art Newman, the former 1st Ward alderman, and Steve Bernstein, the current 4th Ward alderman, claimed Thursday night that we — as city taxpayers — can get a new Civic Center more-or-less for free, but that rehabbing the old one will cost us a bunch of money.

The “free” approach involves getting part of the money by selling off the existing site to a developer and getting the rest by creating a tax increment financing district to capture the next 23-years-worth of real estate taxes from the new condos and townhouses the developer would build.

Meanwhile, the city would take (or keep) the new Civic Center site off the tax rolls and build a nice new headquarters building there.

There are two problems with this “free” approach.

The first problem is that – a few years into the City Council’s search for a site the alderman can agree on that also works financially — they haven’t found one. Given their apparently disparate ideas about where to look for a new site, it’s not clear they ever will agree.

The second problem with the “free” approach is that we are not just city taxpayers. We also pay taxes to the schools. If the existing Civic Center site were redeveloped without the TIF on it, most of the tax money generated would flow to the schools. That money could reduce our school taxes.

When the city was dealing with a bunch of semi-derelict properties downtown and no private developers could be found to take the risks, creating a TIF to pull some public funds together to get the development process into motion made good sense.

Whether the city got the resulting new tax revenue or the schools got it, it was all money that wasn’t going to have come in at all if things didn’t get moving. And the TIF-funded projects spurred additional private investment that has made downtown a much better place that generates much more total tax revenue.

But the existing Civic Center site isn’t derelict. As the recent battle over the Kendall College property demonstrates, there’s high demand now for residential development sites in most of Evanston. At a fair price, it would be snapped up in an instant and we’d soon have new and rehabbed condos paying taxes with the same split of tax revenue between city and schools that we get in any other non-TIF area.

John Kennedy and Elliott Dudnik from the Friends of the Civic Center don’t have a “free” solution. They want to float a bond issue to pay for rehabbing the building. But for the most part they look only at the existing Civic Center site.

Without considering what would happen on the properties that might become a new city hall, it’s impossible to know whether their solution is ultimately more or less costly to the taxpayers than the aldermanic plan.

So let’s think about where a new Civic Center might go.

It could go downtown. But downtown development has been going great for several years now. It doesn’t seem to need the stimulus of a new Civic Center to stay healthy. A new tax-exempt development downtown would reduce our potential yield from that land.

Or a new Civic Center could be located in one of Evanston’s few economically depressed neighborhoods — for example in the Mayfair corridor on the city’s west side.

There it could serve the same purpose that the first TIFs downtown did over a decade ago — it could help stimulate additional economic development in the surrounding area that would benefit all the city’s taxpayers. And it could help reverse decades of blight that have troubled the community.

Ultimately we’re going to spend a bunch of money to rehab the existing Civic Center or build a new one. The real question is how do we get the most benefit for our bucks. Without considering what will happen at both the old and possible new Civic Center sites, we can’t accurately determine the best solution for our community.

So, was that light I saw a true vision, or a blinding flash of stupidity? Add your comments below.

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Bill Smith is the editor and publisher of Evanston Now.

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2 Comments

  1. Civic Center debate
    Bill,

    Let’s face it, one way or another, a new or rehabbed Civic Center is going to cost. The issue is which approach will be the least costly, both in terms of money to pay for it, impact on other taxing entities and the neighborhood.

    The city’s hope of a free lunch by selling the current parcel is overly optimistic. At current costs of new city halls in nearby areas of $350-$450 per sq ft and a need for 80,000 to 90,000 sq ft, that is a lot of money. They won’t get what they wishfully hope for the current parcel, given the current real estate market, and any developer would want zoning variations and density allowances to maximize his profit. It would devastate the surrounding neighborhoods. There would be an impact on school funding because the incremental students would not be covered by the TIF since the property is now tax exempt. Any allowances from the TIF to the developer would reduce the debt retirement.

    The difficulty of finding a new site speaks for itself and the West side site has environmental issues.

    Bubbling under all of this is the shortfall in funding for police and fire pensions.

    Thus from the problems above, the only sane approach — and the least costly, is to rehab the existing building in stages without relocating temporarily, drop the “wish list” items and get with it.

    They ought to make up their minds soon. The overly deferred upkeep is embarassing. Any homeowner doing that would have been cited long ago.

    Reply

  2. free lunches
    Bill, I think you distill the issue pretty well. While it’s tempting to search for a quick “bottom line,” the variables are inter-related, and more complex than choosing A or B. The question breaks down into 5 fundamental questions:

    1. What does it cost to stay in the Civic Center?
    2. What does Evanston gain if we stay there?
    3. What does it cost to build a new Civic Center elsewhere? (this includes what we lose if we relocate)
    4. What do we gain if we relocate? (this includes what the City might get in a sale, benefits from redevelopment of the existing site, and also benefits to the neighborhood that becomes home to a new Civic Center), and
    5. If we relocate, what goes in its place?

    I am not a diehard, lie-down-in-front-of-the-bulldozers opponent of any change to the Center, nor relocation. If the question were simply one of 1 thru 4 above, there are possible scenarios under which I could be convinced that it makes economic sense to relocate. However, as has become extremely clear, the numbers are extremely debatable. So it’s not as simple as those who argue in favor of moving present. And, on those moving-target numbers, I overlay a few principles.

    • First, there’s no free lunch. If something sounds too good to be true, it probably is.
    • As a second general principle, I observe that people spending other people’s money are not as frugal as they are when spending their own. Institutions, which should be able to leverage their purchasing power, often get taken for a ride and charged more than market rate on many services, including (perhaps especially) construction. I don’t just single out government here; many universities, hospitals, and nonprofits fall victim to similar bad business decisions. It’s hard for a board of trustees or a legislative body to micromanage what’s happening at ground level on a construction site. So I highly distrust conservative estimates of construction of a new Civic Center. If government inherently overspends, a smaller project is better than a larger project.
    • Third, development is not automatically a good thing. It is not automatically a bad thing, either. In every case you have to look at overall goals and context. Stimulating a neighborhood can help some folks, but it can also gentrify. It can also drive up land values, which is not automatically good for all. Rising land value is inflationary. It benefits those who plan to sell, or the heirs of those who die, but it is a hardship to tenants (both commercial and residential), those on fixed or limited incomes, and those with no plan to move, for whom higher property values means higher taxes and insurance. If you truly value diversity, you have to value economic diversity as well, and jacking up the value of every acre in Evanston, across-the-board, is not the way to do that.
    • Fourth, there are intangibles to consider. Using local logic, perhaps the federal government should reduce the deficit by selling the White House, the Capitol, and the Pentagon to developers, and relocating to a crime-ridden, poverty-stricken neighborhood in D.C., or perhaps a brownfield in the Rust Belt. No one suggests that. While the Civic Center does not have the same monumental status, there is something to be said, in an Evanston where so much is changing, for a civic symbol to be some measure of constancy and connection to our past.
    • Finally, there’s question #5. As you correctly point out, there’d be no shortage of people willing to develop the land at 2100 Ridge. But it could not possibly be a “blight” TIF and would likely have to be a “preservation” TIF — which does limit development somewhat. More likely, economics dictate that the building would be torn down, and the high price of land would drive a decision toward density, with a result of 150-250 units installed. So question #5 really becomes, “do we need or want a 200-to-500-resident subdivision in this neighborhood?” I answer “no,” and that, for me is the tipping line. Other neighborhoods, and Evanston, could benefit more from redevelopment.

    The Council’s decision to move was made by a different Council, in different market conditions, in an Evanston that has changed a lot just in the past few years. A “yes” vote on the citizens’ referendum will not bind the Council to stay, but it should have the result, if the Council listens to citizens’ advice, of re-opening an alternative that had been “eliminated,” and re-examining, with newer and more relevant data, all options.

    Instead of reflexively bristling when citizens challenge decisonmaking, wise legislative bodies consider that perhaps the people they represent have some good ideas, and draw upon that wisdom. In a community with so many smart and creative people, Evanston government would be wise to tap the best ideas of its citizenry.

    — Jeff Smith


    “Strange women lying in ponds, distributing swords, is no basis for a system of government.”

    Reply
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