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Efforts to regulate Evanston’s bed and breakfast inns returned to City Council’s Planning and Development Committee on Jan. 26. And there the debate remained, as the committee voted to hold onto a proposed measure, pending further information, that would tax B&Bs as hotels and motels.
How the City regulates B&Bs erupted two years ago when Col. J. N. Pritzker purchased the home that would become Evanston’s only legally registered bed and breakfast, now known as Stone Porch by the Lake, at 300 Church St. Stone Porch was controversial because its ownership structure is different from traditional B&Bs.
Usually B&Bs are owned by the homeowner, who turns a home into a business. Stone Porch is owned by an LLC, 99% of which is controlled by Col. Pritzker. The remaining 1% is owned by the B&B’s resident manager. As such, two members of Council, Aldermen Judy Fiske, 1st Ward, and Melissa Wynne, 3rd Ward, argued that Stone Porch was more a boutique motel than a B&B.
Efforts at the time to regulate failed as more and more proposed restrictions beyond ownership requirements – such as distance limits prohibiting B&Bs from being in the same area and limits on the number of events a B&B could host – soured the rest of Council’s inclination to impose.
Ald. Fiske proposed recently that at least B&Bs should have to pay the same hotel and motel tax paid by other Evanston establishments. Currently, hotels and motels pay 7.5% of gross rental receipts to the City, all of which goes to the City’s Economic Development fund.
Alderman Ann Rainey, 8th Ward, asked that the measure be held. “I don’t know what to say about this,” she said. “There is exactly one bed and breakfast in town.” She asked for a list of suspected illegal bed and breakfasts operating in Evanston, as well as an assessment of how much it would cost the City to collect the tax from Stone Porch.
If the tax were imposed on Stone Porch, it would likely generate between $24,000 and $40,000 in annual tax revenue, based on the rental rates quoted on the Stone Porch website at occupancies between 60% and 100%. Contingencies such as higher rates during graduation or similar high seasons and lower rates or specials have not been factored in.
Evanston’s smaller hotels must pay the tax, and Ald. Fiske called the expansion to B&Bs a “matter of fundamental fairness.” Several other B&Bs are in the works, she said, and it is not fair for boutique hotels to pay 7.5% tax while B&Bs do not.
Rumors of other lakefront homes purchased by Col. Pritzker’s corporate entities becoming B&Bs have been swirling around the community. A recent purchase added to the rumor mill.
The measure will be held as the City gathers information. Alderman Jane Grover, 7th Ward, asked the City to include any available information as to new B&Bs that “are in the pipeline.”