Recycling Center on Oakton StreetRoundTable photo

City Council voted 8-1 on Nov. 28 to introduce an ordinance under which the City would lease the former recycling center to Smylie Brothers Brewing Company. Under the proposal, Smylie Brothers would open a brewery, restaurant and beer garden there and “enable the growing brewery to brew larger quantities of beer that would include canning of beers for larger distribution,” per the staff memo.

In conjunction with the project, the City would also construct a 49-space metered parking lot around and behind the Evanston Animal Shelter, costing about $850,000, and would convert the existing Animal Shelter parking to outdoor dog runs.

Alderman Ann Rainey, whose Eighth Ward includes the site, said of the proposal, “This is a jackpot. … Smylie Brothers is going to pay, ladies and gentlemen, $13,000 a month” in rent. “This is the biggest deal the City has ever done on a public building. … This is the deal of a century. … What more can a City ask for?”

Alderman Melissa Wynne, 3rd Ward, called the proposal an example of “adaptive re-use.” The City has been “trying to find a use” for the recycling center “building for a long time. This is a fantastic one.”

One alderman was not convinced of the deal’s merits. Alderman Brian Miller, whose Ninth Ward is just across Oakton Street, said, “The lease is tied to the parking lot. They wouldn’t agree to the lease without the parking.” In looking at the proposed rent and parking meter revenue, he added, “Ball park estimate, we are not recouping our investment [in the parking lot] until year five. … I want to make sure the public knows it’s going to be five years before we realize a return on this investment.”

City CFO Marty Lyons explained the parking aspects differently, saying the City’s parking fund would be paying for the lot and “recouping the cost over about 20 years.”

The parking lot would not be exclusive to Smylie Brothers customers, and employees would have parking available on the recycling center lot itself. The new parking lot will be available to Animal Shelter visitors, James Park soccer and baseball participants and their families, residents using the community garden, and those going to the nearby Quad Sports bubble. Representatives of both the Animal Shelter and Quad Sports spoke in favor of the proposed parking lot.

Smylie Brothers would be responsible for all of the cost of buildout and would not pay rent while construction took place. The preliminary design calls for a large-scale brewery operation along with a 50-seat bar and restaurant area. The outdoor beer garden, on the west side of the building, would have a far greater seating capacity.

Rent would begin in late 2018, and in 2019 the City is expected to receive about $214,000 in combined rent, property tax and liquor sales tax, increasing annually to about $236,000 by 2024. The lease would be for 10 years, with two five-year options, making a potential total of 20 committed years. After 20 years, Smylie Brothers would have the option to purchase the location from the City at a price established by a certified appraisal. Rent paid over the previous 20 years would not be credited toward the purchase price.

One possible sticking point in the deal is the ongoing litigation between the City and the utilities Nicor and ComEd, a lawsuit in which the City has argued that the water supply in and around James Park, including the recycling center, is contaminated. Per the staff memo, Smylie Brothers requested the City remove language waiving and releasing the City from any future claims. “However,” the memo continues, “the environmental litigation pending against Nicor and ComEd (16-cv-05692) has not yet reached the discovery stage. It is therefore premature to adversely limit the City’s rights, and to eliminate future claims and causes of action. Removing the waiver of future claims is detrimental to the City’s interests.”

The ordinance passed out of Administration and Public Works Committee on a 4-1 vote, and at Council 8-1, with Ald. Miller the sole no vote each time. It will return in two weeks for final vote, and a 2/3 majority is required.