Evanston’s Economic Development Committee tonight will review a request for up to $5 million in tax breaks for the 1890 Maple Ave. high-rise project.

The latest version of the proposal from developer Carroll Properties calls for $1.9 million in property tax rebates over 20 years and up to $3 million in sales tax rebates over 15 years.

The developer says the $60 million, 14-story project to build 176 rental apartments and 18,000 square feet of retail space for a grocery store needs the city help to gain construction financing in the current depressed market.

An analysis by city consultant Kane, McKenna says the project would dramatically boost property tax revenue to local taxing bodies over the next 20 years — generating between $2.6 million and $3.8 million for the city, and between $8.8 million and $12.7 million for local school districts.

That’s roughly triple the tax revenue the now-vacant three-story office building on the site was generating when it was still occupied.

Kane, McKenna estimates the grocery over 15 years would generate about $3 million in city sales tax revenue and nearly $2.2 million in city liquor tax revenue.

In a memo to the committee, the city’s interim community development director, Dennis Marino, notes that the tax breaks would be handled on a pay-as-you-go basis — so the city would have no liability unless the project was successfully completed and the grocery story was up and running.

Marino’s memo notes that the city has not previously shared incremental property tax revenue with a developer outside of the tax increment financing district structure. The TIF district that includes the 1890 Maple site is expiring this year.

He suggests that if the city is to consider such arrangements at all, it should limit them to two years after the expiration of a TIF and impose other conditions.

Carroll Properties recently received an extension of its planned development approval for the site which gives it until October 2013 to begin construction.

Bill Smith is the editor and publisher of Evanston Now.

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3 Comments

  1. downtown grocer
    What will the effect of the tax rebate? Does it accelerate the construction of the project. Have the other grocers in downtown received tax rebates or other financial assistance?

    Will there be increased tax revenues or just a dilution of tax revenues from the other groceries.

    Will the grocer bring in shoppers from outside of Evanston, so there will be a real benefit to taxpayers.

    Just a few questions.

  2. Too Soon To Tell
    Bill,

    You state, “the proposal […] calls for $1.9 million in property tax rebates over 20 years”. You also state that “the city has not previously shared incremental property tax revenue with a developer outside of the tax increment financing district structure.” And further, “The TIF district that includes the 1890 Maple site is expiring this year.”

    Perhaps I’m unclear on the terms. Is it $1.9 million of existing TIF funds, or future property tax rebates? I know that previously they’d asked for $1.5 million of existing TIF funds to be placed in an escrow account to help finance the project. Is this what they’re doing now – only with an extra $400,000 involved – or is the rebate a replacement financial tool? If the former, how will the TIF funds, which must be disbursed by the end of the year, be paid out over 20 years? If the latter, where are they getting the money that they apparently needed to get the financing necessary to get things started?

    Also, there’s these two statements regarding the proposed sales tax rebate:

    “The latest proposal […] calls for […] up to $3 million in sales tax rebates over 15 years.”

    “Kane, McKenna estimates the grocery over 15 years would generate about $3 million in city sales tax revenue” …

    Again, it’s unclear. Are they actually asking for a 100% sales tax rebate over 15 years? Do they have a grocer – Trader Joe’s or someone else – interested, or are these the inducements they need to attract a grocer – Trader Joe’s or someone else?

    I’d offer an opinion, but there doesn’t seem to be enough clear information present to make it worthwhile.

    1. 1890 Maple
      Hi Jim,
      The $1.9 million is future tax revenue. An earlier plan had called for setting aside TIF money, but that’s now off the table.

      The requested sales tax rebate would total just under $3 million if the store was of the maximum 18,000 square foot size and the maximum rebate amount of $11 per square foot was applied. (The amount per square foot is based on how many dollars per square foot less than an assumed market-rate rent of $38 the developer has to go to get a grocer to sign up.)

      Kane, McKenna’s sales tax revenue number I quoted assumed a 13,000 square foot store.

      The sales tax rebate does not have a 50 percent cap. The property tax rebate does.

      Trader Joe’s is out of the picture and there’s no indication in the proposal that any other grocer is actually lined up yet to take the spot.

      Hope that answers your questions. Now what do you think?

      Bill

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