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A proposal seeking to convert the City-owned building at 1817 Church Street into a small business incubator for construction contractors and other single-owner businesses in the construction trades is nearing completion after Council voted Jan. 9 on a series of measures that will move the project close to reality.
Three major components made up the package requiring Council approval: Council authorized the City Manager to enter into a contract “selling,” for $1 the property to the Evanston Northshore Contractors Cooperative (ENSCC). Council also approved the repayment of $220,000 to HUD, owed because the City used HUD funds to acquire the property and the ENCC use does not qualify for HUD funding. Finally, Council agreed to lend ENSCC $200,000 to renovate the building.
Council authorized City Manager Wally Bobkiewicz to enter into a sales contract based upon ENSCC’s use of the building as an incubator. Under the proposed contract, ENSCC would pay just $1 for the property and the City would pay most of the closing costs. A right of reverter is included, however, under which ENSCC must pay a portion of the $220,000 repaid to HUD if the building ceases to operate as an incubator, or if the cooperative ceases to consist of 75 percent Evanston residents or 40 percent minority, or fails to maintain the property. The reverter lasts 6 years, and the payment amount would be calculated based on the number of months remaining in the six-year reverter term.
The amount repaid to HUD was established by the property’s current fair market value according to the staff memo and Nancy Radzevich, the City’s Economic Development Manager. HUD funds come with numerous restrictions as to use, including the creation of jobs for low- or moderate-income employees. Although the contractors might qualify, the fact that they are existing businesses and not newly created may mean ENSCC’s use fails to meet HUD guidelines. As a result, the City determined that HUD should be repaid.
The money to be repaid to HUD will come from the West Evanston tax-increment financing, or TIF, fund, said Ms. Radzevich.
The construction loan will also come from the West Evanston TIF. Total renovation costs are expected to amount to $330,000. The contractors themselves will make up the additional $130,000, through a combination of cash, at least $2,500 each, and sweat equity in the form of hands-on property renovation valued at $30/hour. All work is to be completed within 18 months. Payment is not due for 30 months, and the full amount will not be fully repaid for five years. These figures come from the staff memo and Construction Loan Agreement.
The property has a long and storied history. The City acquired the property in 1976 with federal CDBG (Community Development Block Grant) funds. Among its former uses are a police outpost, a neighborhood center and a site for various social services agencies, again according to the staff memo.
In 2001, the City sold the property to the West Evanston Citizens District Council (WECDC). The Council planned to convert the property into a Black American Heritage House and Technology Center, but the project never reached fruition. Based upon provisions within the 2001 sales contract, the City re-acquired the property in 2007.
Sarah Flax, the City’s Housing and Grants administrator, said the City has been “struggling since we got it” to figure out its best use. The City has conducted tours, met extensively with the WECDC, and invited the public to offer suggestions. She said that there has been a “significant public process” surrounding efforts to come up with a solution, responding in part to criticism at citizen comment leveled by community activist Betty Ester that the public had not been involved.
The Cooperative was initially composed of 13 members, but one has dropped out and two more may leave because of project delays, according to a staff memo containing responses to questions asked by Fifth Ward Alderman Delores Holmes. Plans for the building include building trade offices on the upper floor with space for each of the 10 to 13 members of the Cooperative. The lower level will have a design showroom, conference rooms, a workshop and office.
Ald. Holmes reluctantly approved of the use. Alderman Coleen Burrus, 9th Ward, said, “I am so excited about moving this forward. … It will be great for [Ald. Holmes’] ward.”
“We’ll see about that,” said Ald. Holmes, saying that she will be watching closely.