The Joint Review Board held its annual meeting on Nov. 29, 2017, to hear how well Evanston’s six tax-increment financing (TIF) districts performed in 2016.
The Joint Review Board is composed of representatives of all taxing districts that levy taxes on property in a TIF district. In Evanston, some of these taxing districts are the City of Evanston, School District 65, School District 202, Cook County, Ridgeville Park District, the North Shore Mosquito Abatement District, and Oakton Community College.
In a TIF, the tax increment – the difference between the taxes on the property at the time the TIF was created (the “base”) and the taxes on the increased value of the property while the TIF is in effect – remains within the TIF to be used for public improvements.
Examples of these improvements are sidewalks; sewers; parking garages such as the Maple Avenue and Sherman Avenue garages in the downtown TIF districts; and economic development, such as Autobarn’s expansion into the Howard-Hartrey TIF.
The typical life of a TIF district is 23 years, but it is possible to retire a TIF before then.
The six TIFs active in 2016, the activities of which were reported in 2017, were the Downtown I (Washington National), Howard-Hartrey, Howard-Ridge, West Evanston, Dempster-Dodge, and Main-Chicago.
Downtown I TIF
Base Equalized Assessed Valuation (EAV): $25.7 million
2016 EAV: $72.7 million
Surplus (Deficit): ($7.5 million)
The renovation of Fountain Square is the major activity undertaken in this TIF. Called the Washington National TIF because it was created after Washington National Insurance Company left Evanston for Lake County and lower taxes, the TIF was physically extended to include Fountain Square in 1999.
The Whole Foods building, the Park Evanston residential building, and the building housing Peet’s Coffee & Tea were among the first developments in this TIF. Later developments include Sherman Plaza, improvements to the façade of Koi Restaurant and the Music Institute of Chicago’s facility on Sherman Avenue.
The debt that remains in the TIF is due for the most part to Fountain Square improvements and the bonds issued for the Sherman Avenue garage.
Renovations are nearly complete on the island south of Davis that is part of Fountain Square.
Created: 1992, retired, 2016
Base EAV: $8,438,657
2016 EAV: $20,537,528
Surplus: $643,673, distributed when TIF expired
As its name implies, this TIF district lies in southwest Evanston. Big box stores Best Buy, Target, and Office Max/Office Depot attract customers from Skokie and Chicago as well as Evanston. Behind those stores Vineyard Christian Fellowship and the Autobarn share the lot once occupied by Shure Brothers.
To attract Autobarn to the area, the City gave Autobarn a forgivable loan of $2.5 million to improve the lot. The City offers loans rather than outright grants to certain developers but often makes them “forgivable” – that is, they do not need to be repaid – if the developer meets certain requirements, which are specified in each loan document.
The TIF was retired in 2016. After final infrastructure improvements were completed, the surplus, distributed among all the taxing bodies, was just under $650,000.
Base EAV: $5,978,279
2016 EAV: $10,992,983
Surplus (Deficit): ($1,760,084)
This TIF includes property on the north side of Howard Street from Ridge Avenue east to the City limit and a small portion of Chicago Avenue north of Howard Street.
The apartment complex at 415 Howard St. was the centerpiece of the TIF for several years after the TIF was created in 2004. Under the redevelopment agreement, the City continues to reimburse the owner of the building, on a graduated basis, for its property tax bill. The amount decreases as the vacancy rate in the building decreases.
The City of Evanston has made a concerted effort to purchase buildings it felt were under used and create lease-to-own agreements with new businesses there.
The City made lease-to-own agreements with the owners of two restaurants, Ward 8 and the Peckish Pig. In 2016, the owners of Ward 8 purchased the property from the City. North Shore Cider Company joined the business community there in 2017. Plans for live theater are in the works. After City Lit and later Strawdog theater companies were unable to come to satisfactory agreements with the City, Theo Ubique, a cabaret theater in Rogers Park, is expected to open at 721-23 Howard St. this fall.
For nearly four decades there was a police outpost on Howard Street, first at 745, then at 633, then back at 745. The City closed the outpost last month, saying the space was “no longer necessary to fight crime.” The space will now house a bakery operated by Pascal Berthoumieux, who also owns Z Breakfast Club on Sherman Avenue and Patisserie Coralie on Davis Street.
Earlier this year, the City approved a forgivable loan of nearly $2 million to Harrington Brown, LLC, to construct a 24-unit mixed-use building with an educational garden. If the project goes through, then high-rise buildings will bookend the Howard-Ridge TIF district.
West Evanston TIF
Base EAV: $37,477,570
2016 EAV: $32,532,917
Surplus (Deficit): $2,142,720
This TIF district is roughly a parallelogram-shaped TIF that runs from Simpson Street to Greenleaf Street – excluding residential properties and Evanston Township High School – and on Church Street from Brown Avenue to Ashland. It roughly parallels the berm of the old Mayfair railroad spur, still visible across from ETHS and a few other places in the area.
Several businesses along Church Street both east and west of Dodge Avenue serve as anchors: Church Street Barber Shop, C&W Market, Ebony Barber Shop, First Slice in the City-owned Gibbs-Morrison Cultural Center, the contractors’ cooperative, and Strange Lofts. The new Youth & Opportunity United (Y.O.U.) building, 1911 Church St., built largely with private funds, opened last summer, directly across from Evanston Township High School.
Farther south, on Dempster Street, Heartwood Center is a home for many types of the healing arts, counseling, massage therapy, and meditation. Across the street, Curt’s Café South offers breakfast and lunch to customers and training in the restaurant business – and in life – for young single mothers.
Base EAV: $10,816,879
2016 EAV: $8,476,109
Surplus (Deficit): $3,029,415
The shopping plaza at Dempster Street and Dodge Avenue is the sole property in this TIF district, termed by former City Chief Financial Officer Marty Lyons a “micro-TIF.” Azzuri of Evanston, Inc., doing business as Valli Produce, owns the plaza and operates the grocery store that is the anchor tenant there.
The City has given a $2 million loan, which is forgivable after 10 years if all conditions and specifications are met.
The commercial spaces on the perimeter of the plaza are for the most part leased – to Play It Again Sports, Goodwill, Da Vita dialysis center, Dental Arts Specialists, Panino’s restaurant, Dance Center Evanston, and the James Lovell Veterans Center. The out-lot building is only partially rented, however.
Earlier this year, Dance Center Evanston added Studio5, a new venue for live performances.
Base EAV: $11,489,119
2016 EAV: $9,507,557
Surplus (Deficit): $2,764,923
This elongated TIF stretches along or near Chicago Avenue from Dempster Street to Oakton Street, extending both east and west at Main Street to include most of the commercial properties there.
Economic development in this TIF is most obvious in the nine-story mixed-use building on the southeast corner of Main Street and Chicago Avenue. The City gave the developer, Main & Chicago Evanston LLC, a construction loan of $2.9 million for its now-completed $42 million project there, forgivable if certain conditions are met. One of the commercial tenants is First Bank & Trust, which relocated its Main Street branch from near Sherman Avenue into the new building.
Piccolo Theater, whose home for years had been the lower floor of the Main Street Metra depot, has relocated to nearby St. Luke’s Episcopal Church.
The area, both within and outside of the TIF, appears to be thriving.
A few years ago, the Main Street and Dempster Street merchants associations merged to form the Main-Chicago Mile. The association holds several events each year to attract shoppers, including a charity wine walk in the fall.
Sketchbook Brewery now has a presence on Chicago Avenue, having graduated from its alley storefront a few months ago. The newest business in the area is Amanecer Taco Shop, which moved into the tidy space formerly occupied by The Alcove.
Economic activity in a tax-increment financing (TIF) district does not always generate funds immediately.
In some of its more recent TIFs, the City has obtained a line of credit to cover expenses until there are sufficient TIF revenues in the TIF to cover another form of financing, such as general obligation (GO) bonds.
At the Jan. 8 City Council meeting, aldermen approved an extension of the $2.2 million line of credit for the West Evanston TIF and a new $3.5 million line of credit for the Howard/Ridge TIF, both with First Bank & Trust of Evanston.
The vote was 5-2, with Aldermen Tom Suffredin, 6th Ward, and Judy Fiske, 1st Ward, voting “no.” Fourth Ward Alderman Don Wilson and Ninth Ward Alderman Cicely Fleming were absent.
In June of 2015, Council approved a $2.2 million line of credit for the West Evanston and the Howard-Ridge TIFs, according to a Jan. 8 memo from Ashley King. The memo says $649,000 has been spent - $600,000 in the West Evanston TIF and the balance in the Howard-Ridge TIF.
Council approved the $3.5 million line of credit, with $1.5 million to be allocated to the theater project on Howard Street and $2 million to the Howard-Chicago development project (see accompanying TIF story).
The lines of credit will be extended each year until each TIF generates sufficient tax-increment revenues for the debt to be covered by a bond issue, according to Ms. King’s memo.
Until recently she served as the City’s Finance and Budget Manager. City Manager Wally Bobkiewicz recently appointed her to the position of Interim Chief Financial Officer.
Under the agreement with First Bank & Trust, the City will pay interest on amounts advanced under the lines of credit, based on the London Interbank Offered Rate (LIBOR) plus 100 basis points.
At present, the LIBOR 30-day rate is 1.564%, making the City’s total interest rate 2.564%. The rate will fluctuate monthly.