Evanston taxpayers should see nearly three times as much benefit over the next 20 years if the proposed Fountain Square tower replaces the existing 708 Church St. building.
That’s the conclusion of a detailed Evanston Now comparison of the impact on local tax revenue of the proposed 38-story tower and the current two-story building on the site.
The bulk of the difference is accounted for by higher local property tax revenue from the tower.
Generally 20 percent of property tax revenue goes to the city itself, and 67 percent is split between Evanston’s elementary and high school districts, with the rest going to a variety of other local taxing bodies. But for the next decade the city will collect any tax increase on this property through an existing tax increment financing district.
An earlier study by the anti-tower Evanston Citizens for Responsible Development made it appear the tower was a bad deal for taxpayers by using a shorter time horizon and considering property tax revenue only to the city, ignoring revenue to the schools and other taxing bodies.
Both studies make similar adjustments to account for the drop off in tax revenue during the time the tower would be under construction, assign identical market values to the properties and make the same adjustment to account for the value of an income stream over time.
The new study concludes the net present value of property tax revenue generated from the site over the 20 year period would be $24 million if the tower is built, compared to $5 million if the current building is maintained.
The difference in other local tax revenue is not as large. The new study shows that over 20 years the city would likely see other revenue worth $7 million today if the tower is built and $6 million if it is not.
That stream of other revenue has many components including sales and liquor taxes, the real estate transfer tax, building permit fees, per capita state income tax payments to the city, utility tax and auto tax revenue along with revenue to the city’s parking system. Several of those revenue streams were ignored in the ECRD study.
While parking revenue to the city is greater from the existing building, the tower shows more revenue in most other categories.
As with any forecast, this analysis depends on a variety of assumptions. A spreadsheet that makes those assumptions clear and provides details of the calculations is attached below.