Rendering of the proposed tower

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The tower saga ended on March 23, when City Council gave approval to the newest Klutznick-Anderson proposal for a mixed-use high-rise building in the center of downtown Evanston. The planned development ordinance allows for 218 condominium units, four levels of above-ground parking (271 spaces) and retail on the first floor. The design is by the Booth Hansen architectural firm, with George Halik the lead architect and Larry Booth the lead designer of the building.

With first-floor retail, four floors of above-ground parking, more than 30 stories for its 218 condos and a 20-foot mechanical penthouse, the proposed tower would stand more than 400 feet tall.

The vote was 6-3, with aldermen Melissa Wynne, 3rd Ward; Steve Bernstein, 4th Ward; and Elizabeth Tisdahl, 7th Ward, voting against the proposal. Those voting to approve the proposal were Aldermen Cheryl Wollin, 1st Ward; Lionel Jean-Baptiste, 2nd Ward; Delores Holmes, 5th Ward; Edmund Moran, 6th Ward; Ann Rainey, 8th Ward; and Anjana Hansen, 9th Ward.

By the same 6-3 vote, aldermen granted the developers until Dec. 31, 2013, to obtain a building permit and a double exemption from the parking requirements of the zoning code – one for required residential parking and a second one for required retail parking.

In light of these exemptions, the developers will build 271 residential parking spaces, about 125 fewer than the zoning ordinance mandates, and will not be required to build any of the 35 parking spaces mandated for the retail space they plan to create. Nor will they have to lease spaces in the nearby Sherman Avenue garage, which City officials have said is not at present used to full capacity.

Aldermen also agreed to drop from the proposal the second-floor office space and underground parking that were included in the development plan approved by the Planning and Development Committee on March 3.

While the developers obtained the concessions they sought, some aldermen appeared to feel the City was shortchanged in the process.

A Silver LEED Tower

The form and footprint of the building are the same as those approved by the City’s Planning and Development Committee earlier this month, with stepped-back tiers echoing nearby downtown buildings: The first step-back will be at or near the height of the Evanston Galleria (the former Marshall Field’s building), and the second, at or near the height of the buildings of 20 stories or more already in the downtown area – the Optima and the Chase Bank buildings.

The building itself was promised as a public benefit because of its “architectural excellence” and certification by the U.S. Green Building Council as LEED (Leadership in Energy and Efficient Design). Further, the developers have promised to extend streetscape – decorative trees and benches – all the way to Davis Street on both Sherman and Orrington Avenues.

Mayor Lorraine Morton asked whether Council members had considered what would happen to businesses in that area during construction.

First Ward Alderman Cheryl Wollin said, “We may have to make some street closures, but we can make adjustments to keep one lane [of traffic] open [during construction].”

Public Benefits

The developers say they would like to stick to their original timetable – beginning presales in 2010 and obtaining a building permit by 2011 and beginning demolition and then construction as soon afterward as is feasible. The new timetable, approved by City Council on March 23, however, allows the developers until Dec. 31, 2013 to obtain a building permit.

If the developers take advantage of that extension, several of the benefits promised by the developers would be deferred and others decreased. Deferred benefits include the revenues generated from building-permit fees (projected at about $1.5 million), sales taxes from the ground-level retail stores, and real estate transfer taxes from the sales of the condominiums (projected at $900,000).

The developers have promised to contribute $1 million toward the rehab of Fountain Square when they obtain a certificate of occupancy for the building, which may be delayed for two or three more years – possibly decreasing its overall value. The same is true of the developers’ contribution of $880,000 to the City’s affordable-housing fund, listed as a benefit but in fact mandated by City ordinance.

The developers said another benefit was increased TIF revenues that would be generated by the project. In a tax-increment financing district, the tax increment – the difference between the property as unimproved and improved – can remain in the district through the 23-year life of the TIF and be used to make certain infrastructure improvements. The Washington National (Downtown I) TIF, in which the Fountain Square block lies, will expire in 2018.

The developers projected that their project, if constructed under the original timeline (obtaining a building permit by 2011), would generate $22 million in additional TIF revenues through 2018.

If the tower were built on the later timetable, however, with construction beginning in 2014, Assistant Finance Director Steve Drazner said, the TIF increment from property together with sales taxes would be about $7.2 million through 2018. This would potentially entail a loss of more than $14 million in TIF increment, which could have been used to rehab Fountain Square or the Varsity Theatre, to offset costs of the Sherman Avenue garage or for other infrastructure improvements within the TIF district.

After the TIF expires in 2018, assuming the tower is built by then, the City’s and the developers’ projections match: Total property tax revenues are projected to be about $5.1 million by 2020, with $938,000 going to the City, $1.8 million to School District 65, $1.2 million to School District 202, and the balance to the other taxing bodies. Modest property tax increases from that $5.1 million, based on increases in the equalized assessed valuation of the properties, are projected through 2029.

City figures show that without the tower (or a similar development) the projected property tax revenues – which would be shared by all taxing bodies – would be $234,000 in 2013, with annual increases of $20,000 to $40,000 through 2029.

Passed/Failed Amendments

Under an amendment proposed by Ald. Hansen – suggested by the Network for Evanston’s Future – the developers would have to seek LEED certification for the building under the terms and conditions in force at the time of their application rather than those currently in place. In addition, they will have 180 days after the building is completed to obtain LEED certification. Penalties for not achieving silver LEED certification are contained in the planned-development ordinance.

Ald. Bernstein, supported only by aldermen Wynne and Tisdahl, made motions to give the developers only until 2011 – their originally proposed date – to obtain a building permit; to change their promised contribution of $1 million toward the rehab of Fountain Square to a $2 million unrestricted contribution; and to have the developers either lease in perpetuity 35 parking spaces in the nearby Sherman Avenue garage or build underground parking.

Ald. Bernstein castigated his six colleagues who did not support the earlier (2011) building-permit deadline saying, “It doesn’t cost anybody anything. I do not see why you would not vote for this.”

Acerbic Exchanges

All his proposed amendments failing, Ald. Bernstein nonetheless appeared to wish to go down fighting. He said he knew the project would be approved but he was “trying to get what is best for the City.”

Ald. Wynne said, “Under the worst-case scenario, the TIF revenue [generated by the project] is reduced to $3 million. We’re losing one of the primary benefits – the money into the TIF – without anything in return. Give us something back for idling the central core of our downtown.” She added, “Already Focus Development is revising their numbers down. So what I’m asking is, ‘Why are we only getting $1 million, some trees and the possibility of a silver LEED building?'”

Alderman Edmund Moran, Sixth Ward, who championed the project from the start, said he believed in the project and the developers. “We are engaging in a ‘glass-half-empty/half-full debate.” He also said he thought the debate “was not a credit” to Evanston.

“I’m very glad to hear it’s a viable project,” said Ald. Bernstein. “If indeed it is a viable project, we should get more.”

Whatever “more” there might be for the City remains to be seen in this mysterious economic journey that has many people vacillating between cautious optimism and grim anxiety.

A Comparison of TIF Revenues With and Without the Tower

Figures prepared by the City’s Finance Department show the following projections of property tax revenues for the 708 Church St. property with its current configuration and as improved with the recently approved 35-story high-rise. Until the tax-increment financing (TIF) district expires in 2018, the City may retain the increment – the difference between the taxes on the property as unimproved and as improved – to use for infrastructure improvements within the TIF.

Total TIF Revenues (2013-2018) without the tower: $1.5 million

Total TIF Revenues (2013-2018) with tower built under extended timeline: $7.2 million

Total TIF Revenues (2013-2018) with tower built on original timeline: $22 million