Evanston City Council members approved a resolution Aug. 5 backing special tax-reduction status for Hewn Bakery in the business’s move to a new site, after receiving assurances that the bakery would give preference to hiring local residents.
Aldermen temporarily tabled the bakery’s request at the July 30 special City Council meeting to allow staff to confer with Hewn representatives about adding stronger language to the resolution, in support of Hewn’s commitment to hiring local residents.
Hewn, at its current 810 Dempster St. location since 2013, was requesting City backing for special Class 6b status designation from the County Assessor’s Office. The special designation would reduce Hewn’s assessments from 25% to 10%, in their purchase and redevelopment of a 92-year-old vacant building and property at 1731 Central St.
Properties receiving 6b status are assessed at 10% of market value for the first 10 years, 15% in the 11th year and 20% in the 12th year, wrote staff members Johanna Leonard, the City’s Community Development Director, and Paul Zalmezak, the city’s Economic Development Manager, in a memo that recommended the move.
Hewn’s plans call for a renovation of the 1731 Central St. building, located just west of the Evanston Art Center, to a usable condition, at an estimated cost of $729,000, staff pointed out.
Addressing the Council, Julie Matthei, co-owner and co-founder of Hewn with Ellen King, said the business, which started with four employees, has outgrown its space.
“For the past 18 months we have been searching for a larger facility for our baking operations,” she said. “We want to stay in Evanston because it’s where we live and what we love. We appreciate being part of this community.”
She said that for the past 18 months, Hewn’s managers have been searching for a larger facility for its baking operations.
The building they found is a “vacant 6,000 square foot building at 1731-33 Central that needs significant repair and improvements,” she said. “It’s going to be costly, but one that allows us to create new jobs and further grow the business while remaining in Evanston, hopefully for years.”
If the building were to remain vacant, it would generate an estimated $62,000 to the Cty, compared to the $563,000 in tax revenue it would generate in 12 years if granted the 6B, she said.
Further, “this project would allow a homegrown female business to continue to grow in our hometown,” she told aldermen.
In discussion, some aldermen raised concerns about the rushed nature of the request, wondering why it hadn’t first gone in front of the Economic Development Committee, which typically conducts more comprehensive reviews of economic development proposals.
“It says they were working on this for two years,” said Ald. Thomas Suffredin, 6th Ward, opening discussion. “The first thing I heard anything about this is when the packet came out Wednesday and we’re being asked to approve a 12-year incentive with six days’ notice. Regardless of whether it’s a good business, or it’s a smart thing, I don’t think that’s fair to all the residents around the City who will be forced to absorb [the cost of] this incentive.”
“I know there is a lot of enthusiasm about Hewn,” he said, “but there are a lot of people in Evanston who are burdened by their property taxes as well and I’ve heard from them.”
Ald. Judy Fiske, 1st Ward, one of the few Council members to have operated a small business, raised concern about the message the Council’s action would send to other small businesses.
“Somewhere along the line the taxes are going to be made up and I have a lot of small businesses in my ward,” she said. “I talked to a number of them very recently, all of whom are really struggling. I know what will happen if we support this: I will hear from them saying, ‘What can you do for me, I want to stay in Evanston too.’” Ald. Donald Wilson, in whose Fourth Ward Hewn is currently located, said circumstances played a role in the short time frame for action, with aldermen scheduled to have only one meeting this month.
To delay and send it through Economic Development could extend the timeline an extra 60 days, he said, and Hewn “could be looking at close to four months just to get back to the seller on whether the bakery had gotten its tax incentive.”
There’s a shelf life on how long a seller is going to sit around and find out whether he can sell the property or not,” he said.
Hewn, he noted, has been in the Fourth Ward since its inception. “They are a role model for a small business, they are a role model for community engagement, they are a role model for hiring people in the neighborhood, in the community,” he said. “I certainly don’t want to lose them from Dempster, but more importantly I don’t want to lose them from Evanston.”
Ald. Melissa Wynne, 3rd Ward, also underscored Hewn’s uniqueness. “Hewn is the type of business that has survived and thrived in this retail environment, where we find over and over again [other] businesses can’t make it. It’s [Hewn’s artisan breads and baked goods] the thing you can’t order on the Internet.”
She and other aldermen also pointed out the role the 6B tax status has played, allowing other businesses to remain in Evanston.
“I think this is a classic example, just like Ward Manufacturing, just like Autobarn, how 6B can be used to revitalize an older building that needs lots and lots of repair and then grow it into an Evanston-based business,” she said.
Ald. Wynne referred to staff’s analysis which estimated that Hewn would generate property tax of $1.25 million over 12 years if it occupied the Central Street building without a 6b, compared to $563,711 if a 6b was granted.
With the property currently generating roughly $63,000 now, the hypothetical $1.25 million really “doesn’t exist,” she said. “What actually could easily happen is that this building stays vacant.”
Ald. Suffredin argued the City should have stronger guarantees from Hewn on local employment if the request is granted.
Otherwise, “I don’t think we should be asking Evanston taxpayers to subsidize a business where there aren’t guarantees that Evanston residents are getting jobs.”
Council members voted in support of the resolution after Hewn representatives, conferring with the City, proposed language in response to Ald. Suffredin’s response, pledging to make best efforts to continue “to hire and retain Evanston residents for bakery work.”
The business will also work with local job training professionals such as JJ’s List to identify, hire and train people to pursue bakery jobs, the added language said.
In her remarks earlier, Hewn owner Ms. Matthei said if granted the 6b, the business would continue to bring in a significant amount of sales tax to the city “and will continue to employ local people of all skill levels,” noting Hewn’s continuing partnership with JJ’s List.