Evanston’s tax-increment financing (TIF) districts were created to attract development to areas of the City that were underused, undeveloped or in need of refurbishing. Two are located in the downtown area; two bookend Howard Street; one is tucked into a shopping plaza on Main Street and one fans out from the corner of Church Street and Dodge Avenue.

Although the City has developed other avenues of economic enticement, such as tax-revenue sharing agreements, the TIF districts have served as the economic engines of revitalizing the community, in particular, the downtown area.

Downtown II TIF

The centerpiece of the TIF presentation was the Downtown II or Research Park TIF, set to expire next year. It encompasses the area surrounding the new movie theaters on Church Street and continues north on Maple Avenue to Emerson Street, then a few blocks west.

“This is, I think, one of the best stories in the country – dramatic EAV growth and synergy created with the existing downtown,” said Dennis Marino, interim community development director. He said that most of the property in the TIF was originally off the tax rolls, belonging either to the City or Northwestern University.

In addition to the old Levy Center building, the City’s incinerator and its dog pound were located in the area that is now thriving Maple Avenue – with the movie theaters, book store, hotel, restaurants and the City’s self-park garage.

There have been some shifts in the businesses there, Mr. Marino said, with the addition of Uncle Dan’s [from farther east on Church Street] and Bravo [replacing Wolfgang Puck, also on Church Street]. “The [movie] theaters are very stable and a Chicago metro group is the new owner,” Mr. Marino added. He noted that approval for two projects along Emerson Street – a mixed-use rental development at Maple Avenue and a mixed-use condominium development at Oak Avenue – “has been extended a couple of times – as has happened with most of our projects [in the present economy].”

The base equalized assessed valuation (EAV) for the project area (in 1985) was $1.8 million, Finance Director Martin Lyons said, and it was $120.4 million at Feb. 29, 2008 – “quite a dramatic increase.”

Once the TIF expires, the two school districts will be able to levy taxes on property in the Downtown II TIF outside of the their tax caps for the first year; afterward, it, too will be subject to tax caps, said Bill Stafford, chief financial officer for School District 202.

Washington National TIF

This TIF was created in 1994 to “deal with the Washington National [Insurance Company] headquarters site [on Chicago Avenue], vacated in the early ’90s. The TIF was expanded [in 1999] to address the problems with the structurally flawed and decrepit parking garage on Sherman Avenue, the Field’s building [now the Galleria at Church Street and Sherman Avenue] and the Varsity Theater [still somewhat intact above The Gap clothing store on Sherman Avenue.”

The TIF also encompasses the Fountain Square block, where a planned development for a 38-story high-rise has been proposed for 708 Church St. The proposal has been approved by the City’s Plan Commission and tabled by the City Council for discussion after a proposed plan for the downtown area has been approved.

The Park Evanston rental high-rise and the Whole Foods North grocery store are two of the developments from the original TIF area, Mr. Marino said.

Other improvements to the TIF include the Sherman Plaza mixed-use residential development, which contains the new City self-park garage. Much of the retail space has been rented; a few tenants have come and gone, most recently Pier I and Elizabeth Arden’s Red Door Salon.

In addition to the 38-story tower proposed for 708 Church St., development plans include a planned development for parts of the east side of the 1600 block of Orrington Avenue, Mr. Marino said. The planned development there – which would “add retail on the 1603 Orrington Ave. plaza that would wrap around the corner of Davis Street and continue up Orrington Avenue” – has received approval and a promise of City assistance with a reconfiguration of the underground-parking entrance and exit there, he added.

The proposed project has also received two extensions of time for completion.

Asked specifically about the now-vacant former homes of Borders Books and Music (on Orrington Avenue between Church and Davis streets) and Barnes & Noble (kitty-corner from its present location on Church Street and Sherman Avenue), Mr. Marino said the Borders’ site “has been the subject of discussion” recently but gave no further details. The former site of Barnes & Noble is “owned by a New York entity that has been marketing it,” Mr. Marino said. He added the owner is “challenged by the fact that it is two stories and wants to see it leased to one store.”

The base EAV of the Washington National TIF was $25 million in 1994 (without the extended boundaries) and $58 million at Feb. 29, 2008.

Howard/Hartrey TIF

Business in the Howard/Hartrey TIF – on the southwest end of Evanston and home to several big-box stores such as Target, Jewel-Osco and Best Buy – is doing well, said Mr. Marino. “Target is doing better this year than it has in other years. Best Buy is the survivor in the electronic wars, since Circuit City is closing its stores. The bank there has changed names over the past. Wachovia Bank there may become Wells Fargo. Our hope is that whether it has a Wachovia sign or a Wells Fargo sign, it will stay open.”

He added that the Office Max store is giving the City concern, particularly because its competitor, Office Depot, is said to be closing about nine percent of its stores – many in the Midwest.

Mr. Lyons reported that the property tax increment for the fiscal year ended Feb. 29, 2008, was $1.2 million and the fund balance $4.1 million.

“I’m always heartened to look at the EAV,” Mr. Lyons said. City figures showed the base EAV – in 1992, the year the TIF was created – to be $7 million; for last year the reported EAV had increased to $23.2 million. The TIF is scheduled to expire in 2015.

Southwest TIF

The Southwest TIF, also known as the Sam’s Club TIF, was created in 1990 and is scheduled to expire in 2013. “It was initially created to be an industrial park,” said Mr. Marino, [but] along came Sam’s Club.” The area to the north of Sam’s is taken up by Ward Manufacturing, a tool-and-die company relocated from the research park when that area of Evanston’s downtown was redeveloped, he said.

A smaller part of the TIF, south of Sam’s Club, is a “junk yard. It’s still a quandary for us in terms of redeveloping a junk yard,” Mr. Marino said. “One of the things we’ve been looking at is relocating some auto-related uses along Dodge to the junk yard.” He said Sam’s Club is one of the stores doing well in this slowed economy. He added the Food 4 Less store, located in the same shopping plaza but not in the TIF, is “doing very well.” The base EAV of the Southwest TIF was just over $1 million at the time it was created; at Feb. 29, 2008, it was $8.9 million – “a great increase,” said Mr. Lyons.

Howard/Ridge and West Evanston TIFs

While the other four TIFs are mature, if not retiring, the Howard/Ridge and West Evanston TIFs are relatively new: Howard/Ridge was created in 2004, and the West Evanston in 2005. The boundaries of the West Evanston TIF were extended earlier this year.

The parcel occupied by the 16-story Bristol Development with 221 rental units, located at 415 Howard St., is the sole property in the TIF. The development, originally called Howard Street station, has been renamed Chicago Views.

The base EAV in 2004 was $5.9 million; at the end of the reporting year it was $7.3 million.

Mr. Marino said the City “had to substantially assist the project so it will probably use all the TIF increment over time.” The new Howard Street CTA station and the Dominick’s shopping plaza across the street in Chicago help to create a synergy in the area, which, he said could create “spin-off” developments to the west and south of the area.

The West Evanston TIF cuts across the center of Evanston like a giant italicized I, stretching east and west along the former Mayfair railroad spur and right-of-way between Simpson and Dempster streets. “The TIF deals with under-utilized and vacant properties; residential properties are excluded,” Mr. Marino said. A master plan for much of the area within the TIF, the West Evanston master plan, was approved earlier this year, a “strong template, well-thought-out and done with elaborate citizen participation,” he said. The zoning changes to implement the plan await City Council approval.

Development outside, but near, the TIF boundaries includes BooCoo cultural center and café at the corner of Church Street and Dodge Avenue, as well as the multi-family residential development further east, Church Street Village. Within the TIF, Greenwood Lofts on Greenwood Street west of Dodge Avenue “has had stops and starts but is moving forward,” Mr. Marino said.

“Other developments are contemplated but have been slowed down by the capital markets,” he said but added, “I have no doubt that the Tapecoat [north of Church Street and just east of the railroad berm] and the Bishop Freeman [on Foster Street east of Darrow Avenue] properties will be developed.”

A medical-supply manufacturing company is planning to relocate on Dempster Street west of Dodge Avenue, said City Economic Development Planner Morris Robinson. “They make several things, but the most noted is the booties you get when you check into a hospital,” he added.

The base EAV in 2005 was $27 million; and for the reporting year (FY 2007) had slightly increased, to $27.6 million.

Schools and TIFs

Because all the tax increment on the property in a TIF district goes entirely to the City for local infrastructure improvements and other authorized uses, the City’s two School Districts – which take up about 68 percent of the property tax bill – do not share in those increased revenues (except for a tax-sharing agreement with the City).

In addition, the two school districts waived their interest in TIF revenues from the Howard Street TIF. Under TIF legislation, each district would have been entitled to a certain amount of money per school-age child residing in the district.

Dr. Mary Brown, chief financial officer for District 65, said the School Districts have an agreement with the City under which “we receive a check once a year to make up for the revenue we’re not getting from the Downtown II TIF. District 65 uses the money “for all our programs,” she said, “reading, literacy, technology – all of them provide skills that children will need to succeed.”

TIF Basics

The status of the six tax-increment financing (TIF) districts in the City of Evanston is reviewed annually by the taxing bodies who share the property tax revenues collected within the boundaries of Evanston; representatives from each of these taxing bodies, plus several public members, comprise the Joint Review Board.

During the life of a TIF – typically 23 years – property owners in the TIF district pay the full amount of property taxes. The property-tax revenue paid to the taxing bodies, however, is frozen at the level it was when the TIF was created.

The tax increment (the difference between the taxes on the property at the time the TIF was created and the increased tax amount due after improvements on the property) is used by the City for infrastructure improvements and for other authorized uses. After a TIF expires, the full amount of property tax revenue is allocated among the taxing bodies, based on their levies.

At the annual meeting of the Joint Review Board on Dec. 11, Finance Director Martin Lyons and Interim Community Development Director Dennis Marino presented in the year-end report (for the fiscal year ended Feb. 29 of this year) an update on each of the TIFs: Howard/Hartrey; Southwest (Sam’s Club); Downtown II/Research Park; Washington National; Howard/Ridge and West Evanston.