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Evanston aldermen Monday introduced without objection a plan to lease a city-owned building on Howard Street for a new brew pub.

But they cast a skeptical eye on hair salons a few blocks away, voting to require any new would-be salon owner to jump through the city’s special use permit hoops before opening.

Debbie (top) and Jamie (above) Evans describe their plans for Peckish One.

The brew pub plan from the former owners of the Celtic Knot Pub downtown, Jamie and Debbie Evans, calls for totally renovating the city-owned building at 623 Howard St.

Under the proposal, on top of its original investment of $475,000 to buy the building 16 months ago, the city would spend $200,000 to improve the mostly-vacant building to “vanilla box” status with upgraded heating and cooling systems, new windows and doors and structural work to consolidate the building’s five individual storefronts into a single space.

The business owners say they plan to spend nearly $500,000 on improvements to the property to equip it for restaurant use and on other startup costs.

623 Howard St.

After receiving 18 months of free rent from the city, the Peckish One pub owners would pay what city officials describe as market-rate rent escalating from $5,500 to $8,500 a month over the remaining five-year lease term.

After four years, the restaurant owners would be permitted to buy the building from the city for amount the city had spent to purchase and rehab it.

A diagram showing planned renovations to the property at the corner of Howard Street and Callan Avenue.

The microbrewery at the rear of the property is to be operated by Tom Fogarty, who’s also an investor in the restaurant.

The restaurant’s name, Peckish, the owners say, comes from a British expression for being “somewhat hungry.”

They say they hope to open the business by Dec. 1.

In their business plan, the owner say they believe their business will complement the Ward Eight cocktail lounge that recently opened in another city-owned building next door.

Meanwhile, aldermen voted to overturn a recommendation from the Plan Commission and impose restrictions on new hair salons and similar personal service establishments on Howard east of Ridge Avenue.

Alderman Ann Rainey, whose 8th Ward includes Howard Street, claimed the salons detract from the potential for new business development in the area and said that the City of Chicago requires such businesses on its side of Howard to be at least 1,000 feet away from each other.

Alderman Don Wilson, 4th Ward, voted against the salon restrictions at the Administration and Public Works Committee meeting, but joined with other aldermen in approving it for introduction on the full City Council’s consent agenda.

Both proposals will be up for a final vote at the next City Council meeting.

Bill Smith is the editor and publisher of Evanston Now.

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41 Comments

  1. Revise Peckish One Proposal and resubmit
    Dear Mayor Tisdahl and City of Evanston Aldermen,

    I request that the current proposal for the Peckish One Brew Pub be rejected. After appropriate revisions to the structure and terms of the deal, it should be resubmitted and approved.

    While I favor economic development and new business creation in Evanston, my major concern is the risk/reward proposition for Evanston taxpayers. This proposal seems to put significant risk on Evanston taxpayers, with limited upside.

    This is being called “Economic Development” but the structure suggests “Government Giveaway.”

    I looked at the 3 page memo (pages 146-148 from the packet) and did some quick numbers.

    Here is my analysis :

    $675,000 – Total Evanston investment – $475,000 for building + $200,000 for improvements
    (50,000) – Incentive to operators for good behavior – why isn’t there a penalty for “bad” behavior?
    (189,000) – Rent forgiveness – 4 years of rent – page 2 of memo
    ———–
    $436,000 Likely case for Evanston Taxpayers Proceeds

    (239,000) Expected loss by year 4 ($436,000 – 675,000) for Evanston Taxpayers (There will be sales & real estate taxes collected during the 4 years estimated per my discussion with Johanna Nyden of Evanston’s Economic Development group of $200,000 ; ($20,000 for real estate taxes & $30,000 for liquor sales taxes annually)

    So the net loss after 4 years is $39,000.

    However, the $675,000 investment assumes a ZERO % cost of capital for Evanston. Money is not “free.”

    On page 3 of the memo it states that “if at the time of purchase appraisals are obtained that estimate the property for less….Peckish One
    has the ability to negotiate a lower purchase price from the City.”

    What about if the property value goes up? I don’t see a provision that enables the City to share in any potential upside.
    Also, during the “4 year partnership” that the City of Evanston and Peckish One LLC are entering into, why isn’t there any profit sharing?
    Evanston taxpayers are supplying $675,000 of capital, Peckish One is providing $500,000, so wouldn’t at least a 50/50 profit sharing agreement make sense?

    No deal, would be better than a bad deal, and under its current structure the Peckish One Brew Pub is a bad deal for Evanston taxpayers.

    I would encourage the Economic Development team to refresh their negotiating skills and review their introductory business and economic textbooks. The City of Evanston doesn’t have access to zero cost capital. Options have value. The City’s balance sheet should be protected and not exposed to undue risk.

    And most importantly, I would ask that the City of Evanston invests/spends taxpayer money as if it was your own money. It’s very easy to spend other people’s money. When it’s your own money people are more careful and prudent. Please treat and view Evanston Taxpayer money like it’s your own money.

    Bottom line – this deal should be restructured to more fairly distribute the risk and reward between Evanston Taxpayers and Peckish One, LLC.

    Please reject this proposal and revise the terms to make it more fair for Evanston Taxpayers and then come back to City Council for approval.

    Feel free to contact me with you questions or comments.
    Thank you.

    Jim Young

  2. I have known Jamie and Debbie

    I have known Jamie and Debbie Evans for 15 years. I have worked with them and watched them grow into successful business owners who love Evanston and through their ventures have improved the community. I'm looking forward to enjoying a beer at Peckish One, and I believe that it's existance will bring people to long-suffering Howard Street for a beer. Please approve the lease!

  3. Nothing is free

    Judging by her remarks last night, Ann Rainey believes questioning the spending habits of our government officials is a "low" blow and somewhat petty. Really Alderman? In these economic times, I think it is especially important for our officials to be transparent and more frugal with OUR money. We deserve explanation and accounting for all city expenses.

    I didn't mention this in my original post regarding the "army of snow removal experts" in front of her pet project, but since we are talking about costs…. Who's paying for the damage to the privately owned vehicle that was damaged by the city snow plow during this project? I spoke to one of the city employees and was told the small machine backed into the legally parked car and damaged the front bumper significantly. There were police on scene, so I'm sure a report was made to document this. You see, everything costs money Anne. And when it's our money you choose to spend so carefree, I don't believe it is too "low" or petty for us to question.

  4. Legal liability

    Residents around the NU stadium may recall that maybe 15-20 years ago after a football game [I think against Wisc.] the fans held loud parties and uninated/defecated until after 11 PM on the west side of the canal and cars so tore up the golf course that the city stopped allowing parking there until a coule of years ago.

    It was clear to everyone including the Council that heavy duty drinking esp. on the golf course,  was going on and the Council said that exposed the city to legal liability if an accident or damage occured and that was a major reason to stop the parking.   [Forutnately NU greatly increased the bus shuttle after that which was a major improvement].

    This raises the question with the Council giving gifts, below market terms and support to the Ward 8 and the proposed Brew Pub, are they exposing the city—really tax payers since I doubt the Council members will pony-up the personal wealth for lawsuits—to legal action for anything that goes wrong.

    The Council came down heavy on the Keg [and I assume other places over the years] and tests/fines places that violate liquor laws.  Will they be as tough on these two places—-or since they are wards of the city place paid on duty police there to guard against anything going wrong ?

  5. Looks good to me

    The city is simply a landlord, The investment in the property is nothing more than any other landlord would make to deliver a common "vanilla box"   The 675K delivers an improved asset that would be hard to lose.

    The 500K from the bar owners will be a buildout and FF&E inprovment that the City would gain if the project fails.  Renters lose half million, city gains that half million buildout, and built out restaurants rarely go empty long.

    If the project works and the renters become buyers, the city gets it's investment back.  Irregardless, in the meantime the City will collect r.e. taxes on an improved property with a higher assessed valuation, collects sales and liquor taxes, creates jobs for local citizens, and possibly helps further along the development of a street that is underutilized and in need of positive activity.

    I'd say this investment has very little downside and huge upside potential.  For a poster to stop the analysis at four years and call it a 39K net loss is not fair or thorough.  Take it out 5 years, 10 years, longer, the "return" to the taxpayer becomes substantial. 

    As a taxpayer I support investments that deliver cash generating returns that will help alleviate my tax burden. 

      

    1. …and the Cubs will win the World Series this year!

      Spring training recently started and our eternal hopes and dreams will be realized since the Cubs will win the World Series this year. We want to believe, we want to dream and we want to hope.

      But when City of Evanston officials are spending and investing taxpayer money, there needs to be a higher level of disclosure, transparency and communication with taxpayers. The "Economic Development" team has good intentions. I and other taxpayers want information and deals that "show us" the results and actually produce a net positive return to taxpayers. People should question if these deals were so attractive, why do we need the City of Evanston to provide incentives and subsidized loans? Why can't the entrepreneur secure financing from Evanston First & Trust? So if we're going to "help" Ward 8 Wine Bar and Chicago Chicken and Waffle House and Peckish One et al I want to see updated results on a quarterly basis – that's what any "partner" should expect, and i want to see deals structured in a way that benefits the operator and Evanston Taxpayers.

      Current deals seem to be structured in a "Heads I win, Tails you lose" – you figure out which side taxpayers are on.

      Anonymous, when did you last go to Omaggio, Gio, Austin's Taco, Tiny Dog Cupcake, Pomegranate, Uber Burger, or Futami? All of these establishments went out of business in the last 12 or so months. If you started at the Evanston Main Branch Library and walked around the block, you'll see where these businesses used to exist and the number of empty storefronts. Restaurants and bars are difficult businesses.

      The Restaurant Brokers’ study, the only one to make a distinction between chain and independent restaurants, concluded that up to 90 percent of independent establishments close during the first year, and the remaining restaurants will have an average five-year life span. This is why i don't take the analysis out 10 years or longer when the "returns to taxpayers become substantial" or so you claim or hope.

      I too "support investments that deliver cash generating returns that will help alleviate my tax burden." That's why i want the deals structured in a manner that taxpayers will participate the earnings stream during our "partnership" and also participate in the upside in the asset value that we all hope materializes.

      Remember also that everyone's payroll taxes just went up by 2%. So that means for a family earning $50,000 per year, the Federal Government is withholding another $1,000 per year. Don't you think that's going to impact discretionary spending? Doesn't that present another headwind for restaurants and bars?

      By the way, I like pubs, and i think Ann Rainey does an excellent job as Alderman. She's passionate, hard working and fights for her Ward.

      As i stated in my prior post, I want the City of Evanston to spend and invest our taxpayer dollars like it was their own money. I think you'd see a change in behavior and different decisions.

      We can all hope and dream, but reality will be even more difficult if we continue down our current path.

      Let's go to Wrigley and cheer on the Cubs!!

      P.S. I wouldn't bet my money or yours that they'll win the World Series this year. And i hope CIty Council doesn't use our money to place similar "bets"

      1. Like their own money?

        "As i stated in my prior post, I want the City of Evanston to spend and invest our taxpayer dollars like it was their own money. I think you'd see a change in behavior and different decisions"

         

        I'm not sure what this is supposed  to mean.  You want the City of Evanston to spend taxpayer dollars as if it is 'their own money'?  

        Do you mean that you want the aldermen to treat the City's money as if it belonged to the aldermen?

          No…it doesn't belong to the aldermen, it is the City's money.

        Do you mean that you want the aldermen to exercise the same care with public finances that they do with their own?

         Well, I think most of them do [ and the problem is not on the spending side, but the revenue side – with two alderNIMBYs who consistently oppose revenue-generating development].

        Anyway, what do people do 'with their own money'?    Some people save or invest it in the stock market…some people take it to a casino…some people spend it on home improvements, buying a new car, or whatever.  

        How is this 'Peckish One' project then any different than a homeowner spending money on remodeling her kitchen or bathroom?  That is the kind of thing that homeowners often do, with 'their own money'.

         

        1. Agent vs Principal

          When i said, "I want the City of Evanston to spend and invest our taxpayer dollars like it was their own money," I am alluding to the longstanding "agent vs principal" issue.

          I want City Officials to "act like owners." i.e. Principals

          Of course it's our money, Evanston Taxpayer money, that they're spending and investing.

          But it's much easier to spend "other" people's money.

          How many people wash and clean a rental car before they return it? Not many since it's not "their car."

          People behave and act differently when they are an "Agent" vs a "Principal" – it's human nature. Look at the whole field of Behavioral Economics that has gained prominence in the last decade.

          This is one of the inherent weaknesses in our democracy. Many politicians make near term decisions to please their constituents and don't consider the longer term ramifications because they won't be in office in 10 + years when the "piper must be paid." Think about the pension debacle our City, County and State are confronting.

          Many of the politicians who "kicked the can" are no longer in office, and now Daniel Biss, Robyn Gabel, and Laura Fine have to deal with the problems. Funny how we haven't heard from the former politicians who helped dig the hole. Maybe if they were incentivized or required to act as a "Principal" we'd see a different outcome instead of acting as an "Agent."

           

           

          1. Agents

            "This is one of the inherent weaknesses in our democracy. Many politicians make near term decisions to please their constituents and don't consider the longer term ramifications because they won't be in office in 10 + years when the "piper must be paid." Think about the pension debacle our City, County and State are confronting.

            Many of the politicians who "kicked the can" are no longer in office, and now Daniel Biss, Robyn Gabel, and Laura Fine have to deal with the problems. Funny how we haven't heard from the former politicians who helped dig the hole. Maybe if they were incentivized or required to act as a "Principal" we'd see a different outcome instead of acting as an "Agent."  

             

            It is is easy to blame the politicians of yesteryear, but you have to remember that it is the voters who elected them.  How many former Evanston residents – who benefitted from the schools and police services in the 1960's or 1970's – decided to move to Kendall County , or Florida, or Arizona and now are not paying any taxes?  

            And this is not just a policital thing…how many corporate CEO's are there who make lots of money, then skip town right before the company goes bankrupt?  Not just the CEO's….pretty much all of us, the people who own stocks in corporations…buy low, sell high…and if we cash out before the company goes belly up, that is just fine.

            But the 'long termers' aren't any better.  It is worth noting that many of the most notorious NIMBYs in Evanston are "Lifelong residents"…These are the people who helped get the City (and Illinois) into the current financial mess, yet now they opposed any efforts to bring economic development to Evanston. 

          2. Not investments

            Instead of playing the blame game, let's get back to James' initial point that the recent investments by the city are very risky, and are putting the taxpayer on the line for tremendous losses.

            A Cornell University study in 2005 stated that after the first year 27% of restaurant startups failed; after three years, 50% of those restaurants were no longer in business; and after five years 60% had gone south. At the end of 10 years, 70% of the restaurants that had opened for business a decade before had failed.

            Look at the loans that the city is giving out, and all the subsidies to get the various businesses off the ground.  The risk to reward ratio is terrible, and this is why banks are turning them down for loans. 

            Look at the risk for the Peckish ONe for example-

            City paid $475,00 for the building

             City will invest $200,000 in the buildling

            CIty will give 18 months free rent

            City will subsidize rent for 5 years in an escalating manner from $5,500 to $8,500

            After 4 years, the Peckish one can buy out the building at the cost the city paid for it.

            It does not appear that the city is seeking any financial compensation for this risk.  What if the Peckish one folds after 3 years, as 50% of restaurants do?  The city is out more than a half million dollars.

            To put it in another way, imagine you have $100 of your own money.  Would you give me that $100 for 5 years, plus help pay any bank fines that I may accrue for storing it?  I'll put in my own $100 in the bank account too!     In 1.5 years, there is a 27% chance that I'll start paying my own bank fees in an increasing manner but keep your $100, in 5 years there is a 50% chance that I'll pay you back your $100 and a 50% chance that I'll pay you back nothing.  I'll never pay you back for paying my banks fees.  WOuld you do this with your own money?   Even a child could tell you HECK NO!

             The city is selling us these ideas as "investments." But any wise investor would never do this with their own money.  

            What these expenditures are is a transfer of wealth from the taxpayers all over town to Howard Street, in this particular case.  

            If after 5 years, these bars fail, how far in the hole will the city go to financially continue to prop them open?  

            A very slippery road indeed.

             

          3. “It does not appear that the

            "It does not appear that the city is seeking any financial compensation for this risk.  What if the Peckish one folds after 3 years, as 50% of restaurants do?  The city is out more than a half million dollars."

            and the City still owns the improved building, which could be leased to a new restaurant.

            I don't know if this is a good investment, but the City does gain when it replaces, refurbishes, or destroys old buildings.  Maybe the Free Market Fairy would eventually come and do this by herself, using her Invisible Hand , if only  the government would stop regulating.. ….but the City does have an interest in restoring neighborhoods – it cannot be run like Goldman Sachs or Bain Capital.

  6. Prior success there

    First of all I admit this was a long time ago.

    When I think about putting a business there and what will succeed, I think of Edwardos Pizza that use to be there [and i think Buffalo Joes also].  Edwardos was definitely a popular and very nice place.  I always have to wonder why they could not [did not want] stay there.  The reputation of that area from the Metra tracks to close to Ridge has not been good for many years.  Having the city support bars are not likely to help.

    Yes something needs to be done but putting the Council's idea of a Yuppie bar(s), is not the way to go.

    1. Edwardos was on the Chicago side

      Edwardos was on the Chicago side of the street and was excellent!

  7. Does the city need to incorporate its banking business?

    The Dairy Queen on Howard Street has remained shuttered since 2007. What? Have people in the 8th Ward evolved from banana splits to cocktails and beer?

    I'm just wondering why other restaurant/bar owners have not started a business in the past few years on Howard Street with private funding. .

    Why is that? 

    And why are most of the buildings the city purchased and since declined in value vacant?

    Are investors and entreprenuers clamoring over each other to take advantage of these city giveaways? I would bet there are others who have made proposals. This makes me wonder if city officials are picking and choosing the winners using our money.

    Maybe this will work, maybe "knot." I can at least take comfort that these owners have experience and are successful.

    Disclaimer – I like the Celtic Knot and the owners.  

  8. Good investments

    It is an investment and it's not a very risky one for the city at all.  Jens statement that if peckish folds after 3 years the taxpayer is out 500K is simply wrong.  The taxpayer still owns the 675K asset plus the 500K in improvments made by the renters.  Thats now a million + asset,  The city may be forgoing rent for 18 months as inducement but then starts collecting escalating rents which are higher psf than most of the rest of the street.  And the city collects r.e. taxes, sales taxes and liquor taxes from day one.  Substantial amounts that certainly "payback" but are completely missing from all the "critical analysis". 

    As far as the Cornell study is concerned only partial facts are being diseminated by the critics.  Yes many startups fail, the restaurant industry is demanding.  Most failed start ups are by completely inexperienced and underfunded operators, which the peckish people certainly are not.  And once failure occurs another restaurant virtually always opens in the same space within a short period of time. 

    As example from the business held up by Mr. Young, Gio was sold and a new operator went in next day, Austin tacos had multiple offers within a month, new operator within what, 3 months.  Tiny Dog, building was purchased, new restaurant will open once rehab is finished.  Uber burger, a torta place.  As for Omagio and Pommegranate, that space is owned by a difficult and particular landlord and doesn't get filled because of onerous terms.  Exception to, not rule there.  There are over 100 restaurants in the downtown alone, restaurant vacancies simply don't last there or anywhere in Evanston for that matter.

    This is only partially why the analysis is incomplete and it's unfair not to be taken out well beyond the 4 year analysis provided.  I disagree completely, it is a low risk high potential reward ratio for the taxpayer. 

    I do agree that these "investments" need transparency with clear and regular reporting.

    1. No vacancies

      Oh wait, even with multiple proposals presented and rejected by the difficult landlord, Omaggio is filled and Pommegranate is under contract.  That leaves zero vacancies on the list. 

    2. Real Estate has no guarantees of permanent value

      If the Peckish one or any of the other city financed restaurants go bankrupt, the city only retains as much money as some new owner is willing to pay for the space.

      You assume that the city will retain the $675,000 in initial city financed investment as well as the $500,000 of Peckish one improvments.  Two problems with this assumption- If the Peckish one is taking a loan from a bank for the $500,000, the bank will have some ownership of the building as well.  In addition,  unless some new owner is willing to pay $675,000 + whatever is left after the bank takes it's share, the city is still out money.

      Look no further than the housing crash of 2008 to see that just because people put mega-improvements into a real estate asset, doesn't mean that the property will stay at the purchase price or retain it's value.

      A wise investor would factor in all these risks before loaning out money, and this is probably the reason that banks will not finance these ventures.

      As for the poster who says that people should just shut up if they don't like these expenses, I'll shut up when you stop taking my money to pay for this nonsense.

      I'd willingly give money for a community center on HOward, a library, better sidewalks, or more police- But I will never shut up when I see my money foolishly spent on ventures in the name of capital investment.   
       

       

       

       

      1. Real estate values

        Sorry, the bank has no recourse against the building and can only go after the peckish owners for the loss.  It is possible the bank could have placed lien upon furniture and fixtures, so they could take tables and chairs, nothing permanent can be taken, but that is about it, no big deal, and banks don't want possession of used tables and chairs. 

        The bank has no ability to take against property and improvments and leave the taxpayer with whatever is left.  Simply not an accurate statement so the city will absolutely retain the 675K and the 500K in improvments.

        So risk analysis proves the taxpayer is still safe because if peckish fails the city now has a $1,175,000 asset that they only need 675,000 in sales price for or they can simply rent it out again. 

        While it's true that real estate can lose value in the short term that only affects you if you try to sell into the teeth of a downturn.  We are actually picking up property AFTER the downturn has happened and a turnaround is in process.  Now that is exactly what a lot of "wise" investors are doing right now. 

        As I stated before, built out restaurants rarely go empty, even on Howard steeet.  The downside is minimal, the upside large, great risk return ratio here.

        1. Real Estate Market not contained

          Yes, the federal government would have you believe that the housing mess is contained.

          I'd encourage you to read a piece my husband wrote on this on his financial blog.  He has spent the last 15 years as an independent currency options trader.  He started this economic blog out of frustration with the news as reported in the mass media. He has no financial stake in the blog.     He is not interested in replying to comments on his blog that are badgering. If you have legitimate questions or comments, he will reply on that site.

          I would like to see if buildings comparable with this are actually going for $675,000 on Howard Street right now.  If any realtors know of simliarly sized retail properties on Howard, please share.  Of course, not hair salons, as those will not be allowed.

           

          1. Badgering?

            A comparable property would be one that has had reinvestment made that is comprable to what is being discussed here, and that only reflects value on a sell at this moment basis.

            The value as a rental property is what is important in the scenario you are concerned about, ie peckish goes belly up.  The value of rental rates for capital intensive restaurant buildouts is usually very high. 

            I'm not badgering, if that is your insinuation.  You respond with a view, I respond with a different one, don't want a response, don't post.

          2. Simple question

            What is a comparable property on HOward street going for or being rented out for?

            It's a simple question. 

             I found this 3,500 square foot property at 709 Howard for sale for $225,000.   Here is a 3 story building with 2 ground floor store fronts 8  residential units and  parking space for 12 cars for $450,000 at 1413 Howard.  The old Dairy Queen location is for sale for $584,999 at 999 Howard. Dairy Queen is a sem-equipped restaurant with 14,550 SQFT of space for parking or to expand.

            The #1 rule in realty is location. As much as the residents surrounding HOward street want it to be desirable, it is not by most standards now. Safety is also a top concern, and right now Howard street isn't safe. You can search for all the crimes on this map here.  SEe all the bubbles that pop up on Howard? 

            My opinion here is based on some substantial facts about the risk of this investment. You have no facts, just an opinion.

            As this friendly realtor says here "Before making your home(or taxpayer purchased builing) pricing decision, make sure to get a current market analysis to see what is happening in your area.

            Where is the city's market analysis? 

             

             

             

          3. Simple question answered

            You just answered your own queestion.  The city bought a building for 475K.  709 Howard for 225K, comparable, seriously?  The DQ building, a 585K dollar virtual shack?  DQ will need multiple times the investment talked about here to make that property a functioning anything.  While it was grandfathered in to operate it meets no current code for public food preperation today.  Complete shack for 585K.  Really, the city 475K looks like a pretty good market rate buy.

            Your "substantial facts" like the idea that the peckish bank can somehow take the city assets if peckish goes under are very flawed, I'm sorry but it's true.

            Ask any experienced realtor with commercial experience, they will tell you that when you want economic development in an area get a few restaurants up and running.  It's a formula that has worked over and over again, even downtown Evanston. 

            Ward 8 is drawing people from all over Chicago, Wilmette, Winnetka, all to big, bad old Howard st., at night, after dark, Imagine that!  Peckish will do the same, it will serve it's neighborhood, and with a little time, the city coffers, well.  While I admit nothing is ever guaranteed, this is a low risk high reward ratio worth the investment.

          4. RISK

            NOthing is ever guaranteed- this is the bottom line.  Except Evanston taxes rising and the city council thinking they know better than the markets.  As a taxpayer, I am against the city taking on any sort of risk like this. THey should be providing services, not taking risks.

             

            These investments still put this place at well over 100 thousand more than any other rent or for sale property in the entire area.

             

          5. It’s all good.

            The reason taxes are rising is because the city has not made enough investments towards economic impovement in the past, and of course "providing services" that they don't have adequate streams of cash flow to provide. 

            I accept your "opinion" and desire for not taking any risk but "IMO" it is reasonable for the city to take intelligent risk when the goals and reward potential is great, virtually every community does so.  While many cities have been corrupt or inefficient, Evanston so far has been solid and open in their efforts.  Thats because I watch and you watch and that is a good thing, as are the differing opinions, it's nothing personal.

            Their recent investments like the Gordon Foods building on oakton, the parking lot to land a trader joe, the success of their tifs, the city assisted developments in downtown, this is what needs to happen for the longer term economic health of Evanston.  NIMBYS have stood in the way for too long and the taxpayer is now paying the price of their smothering demands, er, opinions.

            As for the 100K, how so?    475K for a solid building shell against 585K for a shack in need of demolition?  You completely ignore that fact that every property you listed as available needs massive reinvestment, two of the three need complete demolition.  Or you could make the case that they just sell, trade hands, no further investment made, property slowly bled, and the street remains what it is today with no change, except for ever increasing demands for "service" of police, fire, aid, etc. 

            Change is good, inducing change is good, creating jobs is good, investing to improve your long term stream of cash flow is good, lifting the assessed valuations of property is good.  It's all good.   

             

          6. Praying for a miracle

            Taxes are not rising due to lack of investment, but due to rising costs of health care and pension obligations.

            We also have a federal government that is printing money with no end in sight, which leads to rising costs for many goods.  If you believe the government reported CPI (inflation numbers), I'd encourage you to read this.

            But, Jolly, I sure hope you are right. 

            Consider that all of the buildings I listed were also once functional spaces, with  the most expensive one I listed being much bigger space with zoning to allow for drive-thrus, a bonus on the busy Howard Street throughway.

              Just because there is a nice new building, does not mean that a new business owner will want to pay $675,000 to be located on HOward(this money covers just the intial cost the city put in, you wrote $475, but the city is also going to pay $200 for upgrades.. not to mention that since the city purchased the building, no one has paid any property taxes on this space and no one will pay for at least another 18 months, this should be factored in as well as lost revenue .)

             

              But if we build it, maybe God will shine down on us, and they will come.

             

             

             

          7. No miracle needed

            Taxes are rising because the city provides services and those services cost money.  Even you have stated that you want or would support even more services, ie a youth sports facilities.  (BTW, I am not saying thats a bad thing)

            Pensions and health care cost are simply a part of the cost required to provide thsoe services, locally, state, national, private industry, whatever. 

            The city needs revenue streams to pay for those services, r.e. taxes being a huge stream,  various user fee's and other nickle and dime add ons, sales and liquor taxes, etc. 

            Since so much burden is put upon the r.e. taxes cities need to encourage, invest, induce and incite development whenever possible.  It raises the r.e. value from which the city can tax, more development, more sales & liquor taxes, lessens the burden to already existing taxpayers. 

            Sometimes you need to spend a little upfront today to get a long term stream flowing for the benefit of tomorrow.  When a communities NIMBYS continually and successfully fight development plans like they have here in the past, they successfully save a dime today at the cost of many dollars tomorrow and each and every day thereafter.  Short term thinking leads to longterm shortfalls, pretty basic penny wise pound foolish. 

            As for the building, someone, peckish, has already stepped up and is willing to invest 500K, of their money, virtually matching the city investment.  Seems like there is already a desire for that property and that neighborhood.  And being a business person I can assume with virtual certainty that their business plan will plan for the aquisition of that property, it only makes sense.

          8. Role of government
            Yes, the rising costs are to pay for services- primarily the salaries, pensions, and health care of city employees.

            Yes, I expect some services for my tax dollars. I don’t view my property taxes as a charitable donation.

            Yes, I support the indoor field house. It was my understanding though that the private group was going to build out the space, using the city building and property tax exempt status. The city wouldn’t take risk, or incur new fees, and the city also wouldn’t profit or make new $$ from property taxes. they would just give service.

            This is what I want my government to do- give service to those who live within our city. By service, I mean streets, parks, protection(fire/police), and recreation that helps residents improve themselves- bars don’t qualify( although if anyone can find a way to drink beer while getting smarter, richer, or fitter, let me know!)

            I dont think government officials are well suited to investing money. Who is keeping track of the profits and losses? In 1 year? In 5 years? When new officials are elected?

            I agree that NIMBYS are a huge problem in Evanston- Tilted Kilt, McDonalds, Felony Franks- just to name a few. or not letting Heil& Heil make a hotel? Now we have nothing. Such a waste.

            If we can’t afford the services with the taxes, we need to look again at the budget and prioritize.

          9. So this giveaway would have been okay?

            I love children's sports.  But the City wasn't going to be providing a service.  Instead, in that deal, the City was giving away a valuable piece of real estate.  So the City would have been picking "winners" among many sports organizations that provide sports-related programs in Evanston by giving away that valuable asset. 

            So I guess that having the City Council picking "winners" in awarding valuable City resources (in this case, real estate) is okay in some situations?  I get it.  You are interested in kids' sports and not interested in revitalizing Howard Street.  But that's why we have elected officials.  They make the decisions for all of us. 

             

          10. Really?
            1. AYSO-Evanston Baseball- two non profit, volunteer lead groups want to collect private donations to build out and use a city owned facility that currently holds empty garbage cans to serve Evanston children on a sliding fee scale based on financial need

            2. City government wants to collect city taxes from all residents to buy a new space, build it out, give reduced rent, allow no property taxes, and give it to a private for- profit drinking establishment.

            Would make a good compare- contrast article for a 3rd grader on the best use of government.

          11. There’s the problem with your argument

            The analysis requires more than a third grader's thinking to see the benefits to the city. 

            And as I recall, the proposal required that the City give the real estate to those two "winning" entities. Those "winners" weren't going to be just be "using"  the property.  They would have owned it. 

          12. Giveaways?

            Again, incorrect assumptions and fundamentals.  The city isn't "giving" anything to the private for profit driking establishment.  They are buying property, making vanilla box renovations, very normal, then inducing investment, rent is abated for 18 months, then rent starts to collect on a schedule that escalates well above market rates in order to "get back" the abated up front rents over time.  Contrary to what you say in the end the city collects the rent. 

            While the owner has the option to purchase, it is at a price that returns the city their investment.  Once the peckish people move in, on day one, contrary to what you say, at no time are there abatements of property taxes, liquor, food or any other taxes and fees.  There is no "giveaway"

            AYSO proposal on examination was flawed in many ways,  Their P&L submissions completely missed operational line items and underestimated basic operational cost by sometimes ridiculous amounts. 

            The idea that it would not have cost taxpayers is misleading. I believe the obviously poorly made business plan may have been what nixed that proposal because that plans reality would have quickly resulted in request  for taxpayer funded support, for the children of course.  

            Not to mention this was a real "giveaway" with no recourse of building value or property tax value returned at anytime down the road, though I believe the city offered a proposal very similar to the peckish one that was rejected because it wasn't a complete "giveaway" 

            Again,  I don't oppose a yourth sports center, but I do oppose the "giveaway" label applied where it's not justified and exempted when it should be applied.

          13. No confusion

            Hair and other personal care salons are allowed on Howard Street. Future ones will need zoning approval. 

            So it is inaccurate to state that they will "not be allowed."  

          14. Not allowed

            If Rainey planned on allowing future hair salons, she wouldn't have made the regulation change in the first place.

          15. Allowed and getting the City involved in improving Howard

            If Alderman Rainey had wanted to make personal care salons a use that was not allowed on Howard Street, that's what she would have asked for.  But she didn't do that.

            We will never agree.  You see Howard Street as a throw away, populated by bums and thugs with no reason to work toward it being better. 

            But the Alderman (as you say, Rainey) and many neighbors have invested hundreds of hours each to improve Howard Street.

            — Neighbors have gone to housing court when the slum landlords are there on housing violations.  The number of slum landlords has dropped in recent years. 

            — Neighbors have participated in peaceful presence walks throughout the area when crime has flared up.  Crime numbers have actually improved slightly in the recent years.

            — Neighbors have gone to court after murderers took the el to Howard Street and robbed and kill a disabled man.  (It's pretty impressive when everyone stands when the case is called and the judge acknowledges the neighbors attendance.)   

            — Neighbors have taken a stand against businesses that are contributing to crime and violence on and near Howard, including attending a City of Chicago hearing on a Chicago-side business that was causing excessive calls to police due, at least in part, to its own business practices.  These businesses have made efforts to be better neighbors.

            — Neighbors have organized neighborhood watches to keep each other informed and let the criminals know that they are not welcome in the Howard Street area.  These watches have helped with the slight improvement in crime numbers.

            It's about time that the City of Evanston supported these efforts with modest investments.  Municipal investment in revitalization of commercial districts happens across the country.  If all of them relied on the invisible hand of the Free Market Fairy, we would almost certainly have more run down, non-productive commercial districts.  In your world, the City's only role is to send police to Howard Street or build a community center which the City will not do.

            Based on the actions of dozens of neighbors for several years and these modest contributions in commercial area revitalization (two, count them, two, written agreements with two legitimate businesses that provide for the investment to be repaid), Howard Street is on the rise.  That's the direction that all Evanstonians should champion as the quality of life of their fellow citizens will continue to increase, more people will move there and more businesses will locate there. 

            For those who don't appreciate this big picture and rail against this investment because there wasn't a guaranteed rate of return, they can enjoy the rising tax collections when Howard is a viable commercial district.

             

          16. No
            It is wonderful that your neighbors are doing this. I frequently read Rainey’s 8th ward Blog and I’m impressed at how your neighbors look out for each other. No other ward that I know of does this.
            Whether it be watching for scammers at your doors, faulty water pipes, graffiti, or the health status of your neighbors, Evanston needs more people who care like you all do.
            I’m not at all against improving Howard.

            I’m simply against government playing bank or giving $$ to privately held business in the form of grants, subsidies, or unequal tax rebates(as in Margarita Inn and not all Evanston hotels).

            I’m against making risk public, but gains private.

            I’m equally against government using power, whether it be prohibiting zoning changes that really infringe on no one(McDonalds), not providing liquor permits when the area has bars(tilted kilt), changing zoning to ban new competition(Howard hair salons), or banning a business because a vocal group finds it morally corrupt( tilted kilt).

  9. I understand all of the pro

    I understand all of the pro and con agruments made here and most have merit, but I just want to give my take on it. Howard St. isn't Central St., it's a Chicago street in its feel and in  they way the general public views it. Yes a bar might be unsuccessful, but the street in general has been depressed and crime ridden for many years an needs some help on the Evanston side to generate some revenue and more important, jobs for the Evanston side of the street. The old cliche "you need to spend money to make money" applies here. If you think using tax money to help start an upscale bar is a bad idea, I have only one question for you. What would you put there instead and why do you think it would be successful? This isn't a challenge, as much as it is to simply get better ideas. If you have no ideas, then shut up. It's better to try and fail, then not to try at all. By the way, I'm not Ann Rainey.

  10. Peckish one – the city’s incomplete proposal

    I would suggest any poster here go to the city web site and look at the construction estimate for Peckish One and compare it to the drawing.    They do not match.  That is the estimate that has been developed is too low for the scope of work on the drawing.   

    While the estimate provide is very order of magnitude – without final drawings – there is way too much missing scope – in the estimate,  A good order of magnitude estimate is typical only good for about 25% plus or minsus.

    The city staff is very clueless in the process here.   

    I suspect the estimate could be as low as $300,000 short of funds to as high as  $500,000 or more..  Alot more work is need to get real numbers for this work that does not appear to have been done.   That is when you add this to the estimate of $535,000 you are at $835,000 to $1 million plus.  The entire financing packet owner and city is only $500,000!

    The interesting question is who is responsible for this mess?  City staff or the applicant.  Better yet who will make up the difference?

    The Lit Theater went from $600,000 to $1.7 million dollars – and now is a total mess, with Ann Rainey trying to save it.Ann no doubt is trying to have us subsidize this mess, since the Lit Theater it appears could no even afford orginal $600,000.

    It is very tiring to continue to look at staff continued screw ups, reading the contract, they put this mess on the Peckish One owners to complete, but in the real world, when a mess is created , all involved will suffer that includes us taxpayers,  city staff thinks we will continue to keep on  paying for their incompetent mistakes.

    1. Incomplete proposal?

      I'm confused by this post.  Do you mean the city estimate to deliver a "vanilla" box is highly underestimated or is it the renters estimate of their buildout? 

      Or are you saying that both the city and the owner together are only proposing a total of 500K all in, which then I would agree is underestimated.

      From what I have read on this site the city is putting up 675K for property purchase and rehab into simple vanilla box state, the renters are dropping another 500K for finishing the buildout to restaurant spec and FF&E.  $1,175,000 combined total.

      You obviously see "way to much missing scope in the estimate"  Did someone forget the HVAC or what?     

      1. Confused? The city staff is also confused, on the Peckish one!

        The best answer to your request is to go to the city web site and find the presentation.  The way I read it –

        City $200,000 for building upgrades so called vanilla box – these upgrades were NOT defined.

        Owners $100,000  ( two $50,000 contributions )

        $200,000  Bank loan that the owners will get. 

        ____________________________Total $500,000

        This $500,000 represents all the cash in the deal ( forget the building at this point – that cost is the citys)

        Look at estimate for construction – $535,000 – compare drawing to estimate many missing items. My estimate between $300,000 to $500,000.additional.

        That is for construction – and furniture- what about everything else – to start this business $50,000 to $100,000?

        From a square foot perspective about 5400 sq ft – building X $150 – close to $800,000. This does not include the patio.

        I asked a staff member of the city about this and the indiviudal said to me, we will get 3 bids, when you appear not have the complete scope and not enough money how can you make up for it with bidding? Staff continues to amaze me with their lack of understanding of the process.  Let me ask who is doing the so called Vanilla box improvements the city or the business owners – who is coordinating the work?

        Look at the So called Wine and cheese bar – $600,000 less building and cost for the owners apartment – about $300,000 for the renovation costs – Wine and Cheese Bar 35 to 40 seats?  Peckish One over 140 – 3.5 times the seating – try over $1 million. even with the city running everything and their lack of competence. Also this includes a Mico brewry.

        The council members approved this in their usual approach, of  a feel good project – while I like the owners, they are being lead down a prim rose path by the city which appears to me will end up with major issues. and quite badly for them.

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