Evanston City Council members on Oct. 25 approved a tax increment financing (TIF) district for a large swatch of the City’s West Side, creating a mechanism officials are hoping will bring more economic development initiatives to the area. Among the TIF-related items approved was a resolution that described several high-priority items for spending funds generated by the TIF. City staff said the resolution was the first of its kind in Evanston and possibly in the state.
But the passage of the series of ordinances and resolutions pertaining to the TIF did not include one element some had thought was key. An intergovernmental agreement (IGA) with District 65 that specified how some of the tax revenues generated by the TIF would be used to address gentrification and displacement concerns and that obligated the School District to do certain things was defeated 5-4 in a late-evening second vote.
The proposed IGA included commitments from the city to use incremental revenues expected to be generated by the TIF for programs such as repairing private homes, implementing workforce development, boosting local businesses and creating affordable housing within the TIF district.
On the school’s side, the IGA called for District 65 to make “good faith efforts to pursue the establishment of a school within the TIF District or the Fifth Ward without a referendum to the extent permitted by law.”
The resolution that Council approved, however, substantially tracked the city’s obligations cited in the IGA.
How support for the IGA unraveled
Council members had approved the IGA earlier in the Oct. 25 meeting with “yes” votes from Council members Clare Kelly, 1st, Ward; Peter Braithwaite, 2nd Ward; Jonathan Nieuwsma, 4th Ward; Bobby Burns, 5th Ward; and Devon Reid, 8th Ward.
Then, near the end of the meeting, after other elements of the new TIF district had been approved, Braithwaite requested reconsideration of the item, saying he had made a mistake earlier and wished to switch his earlier vote.
Council Members voted 6-3 in favor of the motion to reconsider, meeting the two thirds or six votes required under parliamentary procedure to bring the item to the floor for another vote.
Voting in favor of the motion to reconsider were Council members Braithwaite; Nieuwsma; Melissa Wynne, 3rd Ward; Thomas Suffredin, 6th Ward; Eleanor Revelle, 7th Ward; and Cicely Fleming, 9th Ward.
Voting against reconsideration were Kelly, Burns, and Reid.
Then, with the Council taking a second vote on the IGA, the issue was voted down, 5-4.
Kelly, Nieuwsma, Burns and Reid voted in favor of the IGA. Braithwaite, Wynne, Suffredin, Revelle, and Fleming voted against it.
The vote on all the TIF-related items brought for now a sudden end to what has been the most contentious debate to date over the merits of tax-Increment financing as an economic development tool in Evanston.
In a TIF district, the increment of property tax revenues – that is, the difference between the property tax revenues generated on a property when it is put into the TIF and as improved within the TIF – is placed into a special fund and can be used to pay for certain infrastructure projects and other uses within the TIF.
Taxing bodies affected by a TIF – in this case, both School Districts, Cook County, Oakton Community College and the North Shore Mosquito Abatement District – receive the same proportion of property tax revenue as before the property went into the TIF.
When the TIF is retired, typically after 23 years, its surplus funds are distributed proportionally among the affected taxing bodies.
The newest TIF – which officials named the “Five-Fifths TIF” in an allusion to making whole the area, which was the historically Black area of Evanston – is the city’s ninth; four other TIF district are active.
The TIF area stretches from the Morton Civic Center, minus adjacent Ingraham Park, to the new high-rise at Emerson Street and Green Bay Road, north to Central Street and west to include Fleetwood-Jourdain Community Center, Foster Field, the Weissbourd-Holmes Family Focus building.
The TIF District includes approximately 284 tax parcels and approximately 226 structures, reported the City’s TIF consultant, Kane, McKenna & Associates in a report. The area qualified as a “conservation” district, not a “blighted” area. Approximately 84% of the structures within are in excess of 35 years in age, the report found.
In establishing the district, officials sought “to provide a dedicated funding source for a number of economic development initiatives long sought in the Fifth Ward, but not provided at a sustainable level by the private market,” wrote Paul Zalmezak, the City’s Economic Development Manager, in a memo to the Council.
“Much of the proposed TIF district encompasses residential property and small business districts anchored by independent businesses, many of which are Black-owned,” he said.
“This TIF is unique in nature as it is designed to explicitly support homeowners and existing landlords, maintain and improve existing residential property to help maintain culture, community, and independent minority-owned businesses,” Zalmezak said.
“Staff is proposing that TIF funding be used strategically and narrowly,” he said, mirroring some of the terms staff proposed in the IGA, with funds going to such needs as implementing workforce development and creating affordable housing.
TIF ‘not the way to go’
In Council discussion, Kelly, said, “I feel absolutely, definitely, we should be budgeting for the concerns that this TIF is professing to address.”
But at the same time, said Kelly, a longtime Spanish teacher at Evanston Township High School, “we’re going to be diverting a lot of money away from our schools and from our public services. We need to figure outcomes where you budget for our priorities, and not use a tool that has such, a long history and a pervasive history of negatively impacting communities, particularly low income and middle income communities.”
Reid was among those speaking in support of the TIF, commending Burns’s leadership in outlining the resolution, “which puts constraints in place that are unlike any other TIF that we have in the City,” particularly in the creation of a TIF advisory panel that will have a say in how the funds are spent.
A number of other Council members spoke in support of the proposed TIF, but in the context of having the IGA with it.
Direct from the City budget
In public comment and leading up to the Oct. 25 meeting, several local groups urged a no vote to creating the new district.
The Community Alliance for Better Government, in a statement read into the record by member Leslie Williams at the Council meeting, commended Burns for taking the initiative to prioritize investment and development to support residents who have historically been underserved by the city.
“However, the question is not whether prioritizing investment and support is justified,” the group said in its statement.
“The obvious answer is yes, absolutely.
“We see the issue as two-fold: What is the plan for investment within the Fifth Ward with specific anticipated projects and costs; and what are the funding mechanisms to protect the people from gentrification?”
“The Black population has declined at the same time the demand for suburban Evanston homes has increased, this is a recipe for displacement of generations of families,” the group said in its statement. “Justice demands that the funds to support the Fifth Ward should come directly out of the City budget with policies for equitable development to match.”
The Central Street Neighbors Association also issued a statement, urging Council members to vote “no.”
“We agree with one community advocate who wrote, ‘The Council is pushing this too hard and too fast without completing the necessary work to ensure success.’
“We also are disturbed by the lack of detail about how the money will be spent.
“Earlier this year, after years of unhappiness at City decision-making processes, a new mayor and four new Council members were elected on platforms of increased transparency and citizen involvement. In a first major decision, we seem to be headed in the opposite direction and toward an increase in the tax burden without clarity as to goals, methods, and impacts.”