Initial development projects in the City’s newest tax-increment financing (TIF) districts – Main/Chicago and Dempster/Dodge – will be covered by a nearly $5 million line of credit through First Bank & Trust of Evanston.  The City plans to draw on this line of credit to make loans for construction projects in these TIFs.

Two million dollars will be in the form of a construction loan to Azzuri of Evanston, Inc., doing business as Valli Produce, for their grocery store in the Evanston Plaza at Dempster Street at Dodge Avenue. This loan will be forgivable after 10 years if all conditions and specifications are met. The company has requested a total of $9 million from the City.

The other construction loan, for $2.9 million, will be used for the mixed-used development on the southeast corner of Main Street and Chicago Avenue. This loan, with Chicago & Main Evanston JV LLC, is also forgivable after 10 years if all specifications are met.

Information on the construction loan agreements can be found at

Illinois law allows the tax increment in a TIF – the difference between the tax revenues on the property when it went into the TIF and as the property is improved –to be used for certain projects, if, among other things, there is a redevelopment agreement that lists the estimated project costs. The redevelopment plan for the Chicago/Main TIF estimates project costs at $25 million. The Dempster/Dodge TIF redevelopment plan estimates $20 million in costs.

Because neither TIF contains property that has been significantly improved from the date of the creation of the TIF, the tax increment in each is minimal to non-existent at this time. Further, these projects involve private developers, whereas the Maple Avenue and the Sherman Avenue garages, both built with TIF funds, are public projects. The bonds the City issued for those projects were tax-exempt.

But if the City should issue bonds for these private TIF projects, the interest paid on those bonds to the bondholders could be taxable, according to a memo from Assistant City Manager/CFO Martin Lyons. Generally, the interest rate on taxable bonds is higher than the rate on tax-exempt bonds, increasing interest costs for the City.

Once the project in each TIF district is completed, “the debt carried through this line of credit will be refinanced into long-term debt,” according to Mr. Lyons’s memo.

Mary Gavin is the founder of the Evanston RoundTable. After 23 years as its publisher and manager, she helped transition the RoundTable to nonprofit status in 2021. She continues to write, edit, mentor...