At a time when town-gown relations appear to be at their most cordial in decades, some City staff and officials are trying to puzzle out why it happened: the purchase by Northwestern University of the property at 1840 Oak Ave., a parcel that by an agreement signed by the City and the University in the 1980s was not to be sold to a tax-exempt entity.

Corporation Counsel Grant Farrar said at the March 13 City Council meeting he is not able to find the document, apparently executed by some successors of the Northwestern University Evanston Research Park, that exempted 1840 Oak Ave. from the covenant that no parcel be sold to a tax-exempt entity.

A memo from Mr. Farrar and Deputy City Attorney Michelle Masoncup offered a recap of the chronology: On March 24, 1988, a Declaration of Covenants, Conditions, and Restrictions for the Northwestern University/Evanston Research Park (CCR) was executed and recorded. The CCR set forth specific covenants and restrictions regarding future development for a specific area. The parties to the CCR are TOPCORP, Inc., Northwestern University, and Research Park, Inc. “Section 5.3 of the CCR states in pertinent part: Consent Required for Certain Transfers, ‘Without the prior written consent of the City, no portion of the Property (other than Parcel 14) shall be sold, conveyed, leased or otherwise disposed of to a tax-exempt entity…’”

On May 26, 2000, a successor entity to TOPCORP executed a Partial Termination of the CCR, specifically authorizing the removal of Parcel 2/1840 Oak from the restrictions of the CCR.

Rather than challenge the release of the restrictions in the CCR, Mr. Farrar has advised the Council to accept a report proffered by Northwestern University, about the purchase of 1840 Oak Ave., along with the promise of a payment in lieu of taxes (PILOT) to the City and the School Districts.

Mr. Farrar said he had been in contact with the University’s lawyer and he believes the parties can craft a memorandum of understanding (MOU) under which Northwestern would make annual payments to the City and the School Districts of an amount that would approximate their portion of property taxes for the 1840 Oak Ave. property and two other properties, all purchased in January of this year. Neither of the other two properties, 630 Clinton Place and 2522 Orrington Ave., is in the Research Park area.

The estimated tax amount for 2016 for the three properties totals $317,253, according to the memo from Mr. Farrar and Ms. Masoncup: 630 Clinton Place paid $26,096; 2522 Orrington paid $15,743; and 1840 Oak paid $275,413. The University has offered a payment this year of $350,000, which would be apportioned among the City, School District 65, and School District 202.

Council accepted the memo and agreed to wait for the terms of the MOU, some saying they wished the payments to reflect the taxes that would be paid on those three properties and that the payments should be made “forever.”