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The City’s four remaining tax-increment financing (TIF) districts each showed an improvement in 2018 over the previous year. The sole TIF that expired last year, the Downtown II or Washington National TIF, was one of the highest-performing TIFs in the State, said Robert Richlycki, president of Kane, McKenna, the City’s TIF consultant.
A TIF is an economic-development engine created by the State that allows a municipality to retain a tax increment – the difference between the taxes on the property when it entered the TIF (the base) and on the property as improved –and use the funds for infrastructure within the TIF during its 23-year life.
Some of the more visible uses of TIF funds are the construction of the two downtown garages and the renovation of Fountain Square. Largely unseen but vital infrastructure projects have also been financed with TIF funds.
At the annual Joint Review Board meeting on Dec. 13, 2019, Mr. Richlycki, together with City Economic Development Manager Paul Zalmezak, described the progress and the problems of the five TIFs that were active in Evanston in 2018. The Joint Review Board is composed of representatives of all the taxing bodies with a stake in the City’s TIF.
Representatives from Cook Country, Ridgeville Park District, Oakton Community College, the Main-Dempster Mile Special Service Area, School District 65 and School District 202 attended the meeting.
Washington National TIF
Base Equalized Assessed Valuation (EAV): $25.7 million 2018 EAV: $90,149,588
Created in 1994 as a proactive tool to address the redevelopment of the site vacated by the Washington National Insurance Company corporate headquarters, the Washington National TIF district was expanded in 1999 to include property down to Fountain Square. It covered an area bounded by Benson Avenue on the west, Church Street on the north, Chicago Avenue on the east and Davis Street on the south.
The TIF generated $66 million in revenues over its term to help fund major redevelopment projects in downtown Evanston, including the redevelopment of the Washington National Insurance Company headquarters, now home to Park Evanston, construction of the Sherman Plaza mixed-use development, and the $6 million expansion and renovation of Fountain Square.
“That final year [of the TIF] really transformed the center of downtown. That’s a generational change for downtown Evanston, and there’s more to come. … We hope that the Fountain Square building gets a new owner.”
One of the final expenditures in the TIF was a $500,000 intergovernmental agreement with the Chicago Transit Authority in conjunction with its repairs to and modernization of the Purple Line/Red Line in Evanston, with particular focus on the Davis Street transportation center.
Mr. Zalmezak said the building proposed for 601 Davis St. will not receive TIF funds, because the proposal was submitted too late.
Created: 2004; Base EAV: $5,978,279; 2018 EAV: $13,092,571 Deficit: ($3,113,138)
This TIF includes property on the north side of Howard Street from Ridge Avenue east to the City limit and a small portion of Chicago Avenue north of Howard Street.
The City has been a major driver of the economic resurgence of Howard Street, having purchased several buildings it felt were underused and created lease-to-own agreements with new businesses there.
Ward 8, Good to Go, North Shore Cider and The Peckish Pig are popular dining spots along the section of Howard Street between Chicago Avenue and the CTA tracks. Last year Theo Ubique cabaret theater relocated to the area. The Peckish Pig is renovating the former Sherwin Williams paint store, just across the street from its restaurant, for a large entertainment/banquet space, said Mr. Zalmezak.
Other new enterprises in the TIF are Windy City Fitness and “Estacion,” a restaurant operated by Marcos Rivera, owner of the restaurant Libertad in Skokie.
More than a year ago, the City approved a forgivable loan of nearly $2 million to Harrington Brown, LLC, to construct a 40-unit mixed-use building with an educational garden, but construction on the project has not yet begun. Construction has not yet begun on that project.
The Joint Review Board in September and the City Council in November approved an expansion of this TIF west along Howard Street to Ashland Avenue. While the physical boundaries of the TIF have been expanded, the 23-year life of the TIF, created in 2004, remains the same.
The Evergreen Real Estate Group is planning an affordable residential development at 1015 Howard St. and 999 Howard St., said Alderman Ann Rainey, 8th Ward.
The group’s proposal is to construct “60 age- and income-restricted apartments; affordable for households earning up to $40,620.” Rents will range from about $695 to $966 per month to units for which tenants will pay 30% of their income. There will be 54 one- and six two-bedroom units. The group estimates the property taxes there to be “from about $10,000 to about $70,000 annually.”
The equalized assessed valuation, or EAV, of the amended area was $5.4 million in 2018.
West Evanston TIF
Created: 2005 Base EAV: $34,477,570 2018 EAV: $39,577,498 (Deficit): $1,939,619
This TIF district is roughly a parallelogram that runs from Simpson Street to Greenleaf Street – excluding residential properties and Evanston Township High School – and on Church Street from Brown to Ashland avenues. It parallels the berm of the old Mayfair railroad spur, still visible across from ETHS and a few other places nearby.
High-tension towers straddle much of the berm, which make it amenable to such uses as a bike or hiking trail but not residential development.
Several businesses along Church Street both east and west of Dodge Avenue serve as anchors: Church Street Barber Shop, C&W Market, Ebony Barber Shop, the contractors’ cooperative, and Strange Lofts. The Youth & Opportunity United (Y.O.U.) building, 1911 Church St., built largely with private funds, sits directly across from Evanston Township High School.
In the City-owned Gibbs-Morrison Cultural Center, on the northeast corner of Church Street and Dodge Avenue, Litehouse Whole Food Grill has replaced First Slice as the restaurant. The gathering space and the recording studio remain the same.
Farther south, on Dempster Street, Heartwood Center is a home for many types of the healing arts, counseling and meditation. Across Dempster Street, a new restaurant, reportedly to be operated by Marcos Rivera of Libertad in Skokie, along with the artist Alfonso Nieves (Piloto) will replace the now-closed Curt’s Café South.
Mr. Zalmezak said there are still some vacant parcels of land in the TIF and surrounding areas, which afford opportunities for development. “We’ve been talking about the vacant lot at Church Street and Darrow Avenue for years,” he said. “It used to be a gas station. It’s been remediated, and we’re ready to go. We are seeking a mixed-use development of market-rate and affordable housing.”
Referring to the parking lot on the southeast corner of Church Street and Dodge Avenue, Mr. Zalmezak said, “When I see surface-lot parking, I start thinking of development.”
Alderman Ann Rainey, who chaired the Joint Review Board meeting, said about the City’s efforts at Gibbs-Morrison, “We need to do everything we can to get Gibbs-Morrison on the tax rolls.”
Mary Rodino, Chief Financial Officer of ETHS, asked if the City could do anything about the railroad berm across from the high school. “Our kids travel on that berm, and it’s not safe. I would just like to mention that again – some sort of safe pathway for children and adults.”
“Now that we have this funding, we can do some of the projects,” Mr. Zalmezak said. He said he would like to see a “gateway” to ETHS from the south, because the approach on Dodge Avenue from Dempster is not as attractive as it possibly could be.
This has been one of the lowest-performing TIFs in Evanston, in part because of the low values of several of the properties.
“This TIF has been a slow-starter,” said Mr. Richlycki. He said plans for this TIF began in 2006, “and that plan followed the 2006 market, which was red-hot. It’s not realistic now.”
With the help of Mr. Richlycki, the City was able to bundle several of the properties that had a “negative increment (that is, the current assessed value of the property had still not recovered since the 2008 downturn),” Mr. Zalmezak told the RoundTable. From a Cook County perspective, once they are bundled in this way, the negative increment parcels are zeroed out, allowing the positive performing properties to generate increment,” he added.
Echoing Mr. Richlycki’s comment, Ms. Rodino said, “It’s a slow-traveler.”
Created: 2012 Base EAV: $10,816,879 2018 EAV: $12,337,272 Deficit): ($3,783,329)
The shopping plaza at Dempster Street and Dodge Avenue is the sole property in this “micro” TIF district. Azzuri of Evanston, Inc., doing business as Valli Produce, owns the plaza and operates the grocery store that is the anchor tenant there, in the space that formerly housed a Dominick’s food store. The City initially gave Azzuri a $2 million loan, which is forgivable after 10 years if all conditions and specifications are met.
The commercial spaces are for the most part leased – to Play It Again Sports, Da Vita Health, Goodwill, Dental Arts Specialists, Panino’s restaurant, the Lovell Federal Health Care Center, Dance Center Evanston and Studio 5, Subway and Dunkin’ Donuts.
New tenants in 2019 include Blink Fitness, Auto Zone, and the Moran Center for Youth Advocacy.
“We anticipated that Dominick’s was going to leave, and we created a TIF in anticipation of that,” Mr. Zalmezak said.
Mr. Richlycki said, “This  was primarily a status-quo year. There were no acquisitions, but the TIF is starting to creep up financially. It was below the base [EAV] for several years.”
District 65 CFO Raphael Obafemi asked, “Have we seen any growth this year ?”
“We hope that we see more this year,” Mr. Richlycki said. “It’s expected.”
Created: 2013; Base EAV: $11,489,119 2018 EAV: $13,730,750 (Deficit): ($4,444,622)
This elongated TIF stretches along or near Chicago Avenue from Dempster Street to Oakton Street, extending both east and west at Main Street to include most of the commercial properties there.
“There were no new redevelopment agreements; 2018 was primarily a status-quo year,” Mr. Richlycki said.
Economic development in this TIF is most obvious in the nine-story mixed-use building on the southeast corner of Main Street and Chicago Avenue.
“Chicago/Main is the engine that is driving this TIF,” Mr. Zalmezak said. He added that upcoming improvements will include rebuilding the water and sewer infrastructure from Maple Avenue to Chicago Avenue.
The area, both within and outside of the TIF, appears to be thriving.
A few years ago, the Main Street and Dempster Street merchants associations merged to form the Main-Dempster Mile. The association holds several events each year to attract shoppers, including a charity wine walk in the fall and, earlier this month, a Holiday Walk.
Katherine Gotsick, Executive Director of the Main-Dempster Mile, said there have been more than 260 key business projects that have engaged the community over the years.
The former site of Dard Products, 912 Custer Ave., may become upscale townhomes, even though the developer who bought the property and proposed the development has died. Mr. Zalmezak said the new owner, Toll Brothers, a developer of luxury apartments, has indicated it will continue with similar plans.
The sale of the Vogue Fabrics building, 718 Main St., “has potential for redevelopment,” Mr. Zalmezak said.