222 Hartrey Ave. building interior. Courtesy City of Evanston

The Howard /Hartrey TIF district, that will expire less than two years from now in 2015 may be growing to include the proposed Autobarn site just to the north of the current TIF district under a measure passed by City Council on Aug. 12. Council suspended the rules requiring two readings of the ordinance to speed the process along.

The Howard/Hartrey TIF, created in 1992, led to the Target, Best Buy, OfficeMax and Jewel Osco shopping center on the far south edge of Evanston. Recently, the TIF has found itself with little to do, resulting in a $1 million declared surplus being returned to the taxing districts and what the staff memo labels a “beginning balance” of $4.2 million this fiscal year.

Meanwhile, just to the north of the TIF district lies the former Shure Brothers manufacturing building. That site was not included in the original TIF because Shure was open and operating at the time, said Alderman Ann Rainey, whose Eighth Ward includes the TIF and its proposed expansion, speaking at the Administration and Public Works meeting on Aug. 12.

Since Shure left about 10 years ago, however, the property-owner has not been able to find a suitable manufacturing tenant; Vineyard Christian Fellowship has purchased the eastern half of the property, removing it from the tax rolls.

A proposed Jewish School acquired an interest in the remainder of the property, but City Council refused to enact zoning changes necessary to operate a school on the industrial-zoned property. The City of Evanston successfully won a legal battle against the school in litigation that cost the City about $800,000 in legal fees.

Enter Autobarn and the TIF expansion idea. The City’s Economic Development Committee has been addressing a plan presented by Autobarn that would move much of the car dealership’s service operations, car storage and pre-owned car sales to the Shure location within the next 12 to 18 months.

The new Autobarn development would require extensive rehabilitation or “adaptive reuse” of the Shure building to allow it to house new and used automobiles as well as offer car repair and other services. According to documents presented to the Economic Development Committee, the estimated cost of property acquisition and building improvements would be about $5 million. Autobarn is asking for City assistance in covering the cost.

City staff, working with Autobarn, proposed to Council an expansion of the current TIF to include the former Shure site, a move that would allow the City to spend money collected by the current TIF district in the newly added portion of the district. “Base” property tax revenues – the amount of tax revenue generated on the site before it was improved – are split among the usual taxing districts.

That is, the City, the county, school districts and other taxing districts keep receiving the same tax dollars they received the tax year the TIF went into effect – tax year 1992 in this case. Taxes that result from increases in property value since the TIF began – the tax increment – however, must be used to fund projects within the district itself. The allowable projects are limited to certain categories under Illinois law.

Thus, the City says the current balance of the Howard/Hartrey TIF can be used to fund the Autobarn purchase and development of the Shure building if the TIF district is expanded to include it.

Expanding a TIF district requires the City to go through the same process necessary to create the TIF in the first place. Properties are only eligible for TIF status if they meet factors defined under the law. In this case, the Shure building is not eligible as a “blighted” site, but instead as a “conservation area,” or a site that is “not blighted but exhibits potential risks of becoming blighted,” according to the staff memo.

The City retained Kane McKenna as consultants for an opinion as to TIF eligibility. Their report, provided in the Council packet, identifies five factors that make the Shure building eligible: the fact that it has been vacant for ten years (though Autobarn is about to move in and the Jewish school tried to move in); its lagging assessed property tax value (caused in large part by vacancy); deterioration of the vacant building; “deleterious layout” including traffic issues, (which is not going away); and, obsolescence indicated by the long period of vacancy and lagging assessed value.

Council passed the Ordinance starting the TIF-expansion process with little or no debate, then suspended the rules so that no second reading was required. The TIF evaluation process, including public hearings on the TIF expansion, now begins. According to the staff memo, the “targeted date” for final TIF designation is Nov. 11, 2013.

Two More Autobarn Requests

TIF money is just one element of the Autobarn project. According to materials presented to the Economic Development committee, Autobarn also seeks continued and expanded sales tax relief for all cars sold at all Autobarn locations and support in its bid to seek Cook County property tax relief for the Shure site.

The present sales-tax-sharing agreement is set to expire this year. Autobarn seeks a ten-year agreement with the City under which any sales-tax revenues it generates would be shared 50/50 with no monetary cap on the amount that Autobarn could obtain.

Autobarn is also seeking City support in its application for a change in the Cook County classification of the site – one that would reduce the property taxes for a 12-year period.

These additional requests are scheduled to come before Economic Development in September.