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8/14/2012 10:51:00 AM
Bed and Breakfast Ordinance Gets Rude Awakening
By Shawn Jones

The proposed changes to Evanston’s Bed and Breakfast, in the works since the fall of 2011, failed with a thud at the Aug. 13 City Council meeting. Aldermen voted 7-2 against the revised ordinance, effectively ending the effort to change the current law.

Efforts to amend the law began in November 2011 in response to Council’s vote in favor of allowing a bed and breakfast at 300 Church St. near the lakefront. Two aldermen in particular, Judy Fiske, 1st Ward, and Melissa Wynne, 3rd Ward, fought the 300 Church proposal and then sought to change the law to limit additional such businesses.

A subcommittee of the plan commission, in meetings attended by alds. Fiske and Wynne, prepared a revised ordinance. It winded its way through the Planning and Development Committee, to Council, then back over the following six or eight months. Finally, on Aug. 13, it seemed poised to pass Council.

Concerns over the ownership requirements, long a point of controversy in the current as well as the revised ordinance, reared up and in the end torpedoed the ordinance. The revision would require that an owner of the property live in the bed and breakfast as a "primary residence." Such owner must have at least a 50 percent interest. Ownership could, however, be in the form of an LLC, provided the "primary resident" owner maintain at least 50 percent of the LLC.

Two lawyers at citizen comment decried the LLC provision, saying it created a loophole that would allow one entity to own multiple bed and breakfast establishments within the City. The ordinance as drafted "is almost designed to be circumvented," said George Simon, expressly agreement with a similar sentiment expressed by Frank Cicero.

Mr. Cicero said that even though a primary resident must own 50 percent of the LLC, all the money poured into the property could come from the other 50 percent owner, and that half owner could own half of any number of LLCs. The ordinance should not be approved as written. The "primary residence" requirement did not go far enough with the LLC component inviting possible abuse.

The "50 percent" requirement was added in response to the 300 Church B&B, which is owned by an LLC controlled by Colonel James Pritzker. Col. Pritzker will not live in 300 Church, but an owner-operator who owns a small percentage of the LLC will. The 50 percent requirement was designed to prevent such an ownership structure.

When the measure came up for debate at Council, Alds. Fiske and Wynne immediately jumped on the LLC issue and proposed an amendment that would eliminate the possibility of LLC ownership entirely.

Alderman Jane Grover, 7th Ward, said that with the LLC amendment, she would not be comfortable enough to vote in favor after Corporation Council Grant Farrar said that the due process and equal protection implications were "pretty deep water" that he would need to research.

Both alds. Fiske and Wynne seemed to back off, and the ordinance seemed destined for another delay so that the LLC component could be better addressed.

Then Alderman Ann Rainey, 8th Ward, struck. "I agree with Aldermen Fiske and Wynee," she said, "We are really not ready to deal with this at this time." She suggested that Council scrap the whole endeavor by voting it down "so we can start from scratch." She then moved to "call the question" on the entire ordinance, a procedural maneuver that terminates debate and requires an up-or-down vote on an item.

"That sends us back to square one," protested Ald. Fiske. She and Ald. Wynne both withdrew their proposed amendments to the LLC component in hopes that the remainder of the ordinance might pass.

The vote to call the question, which requires two-thirds in favor, passed 6-3 with Alderman Delores Holmes, 5th Ward, joining Alds. Fiske and Wynne.

Council then addressed the entire ordinance, in the works since at least November of 2011 when the Plan Commission first took it up. It failed 7-2, with only Fiske and Wynne in favor.

Back to square one indeed. The 1995 ordinance remains in effect, including the ownership requirements.

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