Students in Professor Therese McGuire’s “Real Estate Lab”class at Northwestern University’s Kellogg School of Management presented the results of a quarter-long class project about office space in Evanston. The study was commissioned by Evanston Inventure and conducted by Kellogg students Kevin Bell, Kevin Heckman, Marco Shea and Ben Wilaroth.
The students centered their study around the question whether there is a demand for more Class A [prime location and well-equipped] office space in Evanston. They found the “sweet spot” – or most typical office use – for Evanston businesses is about 5,000 square feet, occupied by a local or regional company.
“There is a lack of national and region firms, unlike Evanston’s retail footprint,” said Mr. Wilaroth. In three office buildings in the downtown area, about 1.6 million square feet of space is allocated as office space, with a vacancy rate of 10.3 percent. That vacancy rate, the students said, could indicate the need for additional Class A office space in the downtown area. They proposed six sites for such a new building, several of which have been previously discussed as potential development sites: the parking lot for the Evanston Public Library, the 1515 Chicago Ave. building, the vacant lot in the 600 block of Davis Street; the now vacant corner of Main Street and Chicago Avenue; the parking lot at the Engelhart dormitory, 1915 Maple Ave.; and the vacant lot at 1890 Maple Ave. in the former Research Park, where more than two years ago a developer received approval for a retail-residential planned development.
The students analyzed the strengths and weaknesses of Evanston as a place for new businesses and compared the Evanston business and marketing climate to those in Pasadena, Cal., Ann Arbor, Mich., and Cambridge, Mass.
Among the weaknesses here, the students found, are the perceived “high occupancy costs,” the difficulty of parking, the higher tax rate and the lack of direct access to airports. In its favor, they found are the “intellectually vibrant feel of a college town,” the “high quality of life,” convenient public transit on both the CTA and Metra, the proximity to first-class hospitals and to a world-class university.
The students made four recommendations about how the City could position itself better in the business market: by defining the kinds of companies Evanston wishes to attract, increasing its marketing efforts, using more social media outlets and organizing business-centered events to learn about challenges within the business community.
Tim Lavengood, executive director of Evanston’s business incubator, the Technology Innovation Center, told the RoundTable he was “gratified that [the students] saw how significant incubators are. The Idea Lab in Pasadena has a lot of private equity, which shows that, properly funded, [incubators] have a measurable impact on a community.”
Chuck Happ, who owns the incubator buildings and chairs its board, told the RoundTable he was “rather ecstatic to hear the presentation.” The Incubator, he said, has for years been following the recommendations made by the students.
“We access social media and work with Downtown Evanston; we have a broker on our board.”
To locate to or remain in Evanston, Mr. Happ said, startup and fledgling businesses “need cheap space and access to capital.” He also said he felt the City “is ideally poised to take advantage of the students’ recommendations.”
Robert Yohanan, CEO of First Bank & Trust of Evanston, told the RoundTable he thought the presentation was “reflective on one level of the significantly improved degree of cooperation between the City of Evanston and Northwestern University and, on another level, of the very high quality of the students at the Kellogg School. The presentation was thorough, well-delivered and, while it did not provide all the answers for office development in Evanston, it did lay out some very useful specific steps to guide city management in the quest to attract more companies to our great City. In my opinion, it was a job well done. “
City Manager Wally Bobkiewicz said he was “very impressed with the report. It sets the bar even higher for Evanston to work aggressively in the area of economic development. Providing more office space in Evanston is important to our future economic growth, but given the factors identified in the report, there is much work to be done to make it happen.”