With the Evanston City Council’s Oct. 25 approval of a tax-increment financing (TIF) district on the city’s central west side, it appears to have taken the gamble that progress for an area that has been economically marginalized can come without gentrification that would displace residents of this historically Black but already changing area.
Unlike previous TIFs, this one, the city’s ninth, drew opposition from residents both within and without the proposed TIF area.
Many people opposing the TIF argued that new development there would make the neighborhood more attractive, driving up housing prices and property taxes and ultimately forcing out many long-time residents.
School District 65 officials at first added their voices to the opposition. A series of negotiations and a spate of emails led to uneasy relations between District 65 and the city about how to protect the residents from being priced out. Yet now it appears that that District 65 – and possibly District 202 – are asking for a share of the income that would be generated within the TIF.
On Oct. 25, City Council members also refused to approve an intergovernmental agreement (IGA) with District 65. That agreement would have obligated 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.”
While it appears that the IGA had the full support of the District 65 School Board, the Board had not publicly deliberated or voted in an open meeting on the provision regarding a Fifth Ward school.
Instead, Council members approved a resolution that described how TIF funds would be spent, and not be spent, in ways that are intended to benefit the residents of the area.
The Five-Fifths TIF
The TIF begins at the Morton Civic Center, minus adjacent Ingraham Park, goes south to the new high-rise at Emerson Street and Ridge Avenue, then north to Central Street and finally west to include Fleetwood-Jourdain Community Center, Foster Field, the Weissbourd-Holmes Family Focus building and surrounding properties – in all, 284 tax parcels. Fourteen acres within the TIF are off the tax rolls.
Earlier this year, Kane, McKenna and Associates, the city’s TIF consultant, found that the area met a sufficient number of the requirements to qualify as a conservation TIF district – not a “blighted” area.
The TIF qualified as a “conservation” area, in which at least 50% of the homes are 35 years old or older. It was not qualified as a “blighted” area.
Under Illinois TIF legislation, a “conservation area” is one in which “50% or more of the structures in the area have an age of 35 years or more.”
How TIFs affect local taxing bodies
In a TIF district, the increment of property tax revenues – that is, the difference between the property tax revenues generated on a parcel of property when it is put into the TIF and on the property as improved after the TIF is formed – is placed into a special TIF fund and can be used to pay for certain infrastructure projects and specified other uses, generally within the TIF.
The affected taxing bodies continue to receive their allocations of property taxes based on the assessments before the TIF district was approved, with only the incremental difference placed into the TIF fund.
In Evanston, TIF funds have been used to build the Sherman Avenue and Maple Avenue parking garages, revamp Fountain Square, construct the Levy Center, and make other improvements. Since the previous Levy Center was within a TIF district – on Maple Avenue north of Church Street – the city was able to use TIF funds to construct the present Levy Center at James Park.
When the TIF is retired, typically after 23 years, any surplus amounts in the TIF fund are divided among the affected taxing bodies. Also, they begin to receive their share of the property taxes attributable to new construction that occurred within and during the life of the TIF.
At times, though, to avoid having a surplus, ad-hoc projects have been suggested or created to allow the city to spend those funds within the TIF and avoid dividing the surplus.
A Joint Review Board composed of at least one representative of each taxing body affected by a TIF district – in this case School Districts 65 and 202, the City of Evanston, Oakton Community College, Cook County, and the North Shore Mosquito Abatement District – and one public member must review the proposal and make a recommendation to the City Council.
The City of Evanston receives about 20% of the revenues from the property tax bill. School Districts 65 and 202 collect the lion’s share – nearly 70% between them.
Meeting in June, the local Joint Review Board unanimously voted to recommend that City Council approve the TIF. A unanimous vote is not required, and the recommendation does not bind the Council.
City officials named this TIF the Five-Fifths TIF, alluding to the U.S. Constitution’s under-representation of Black citizens and implying that this TIF would help make the area whole.
Months of opposition
Although the TIF was proposed nearly two years ago by then-Fifth Ward Council member Robin Rue Simmons, Delores Holmes, who preceded her in that role, said discussion about a second TIF in the Fifth Ward began nearly a decade ago.
Public discussion and debate, nonetheless, became open and heated several months before the October Council vote, as the city solidified and made public its plans for the TIF.
Meetings held over the summer by the city and other groups allowed some Evanston residents to voice their concern about and opposition to the (then still-proposed) TIF.
Some residents said they doubted the city’s promises that TIF funds will help local businesses – particularly Black-owned businesses – thrive and expand.
Council member Bobby Burns said there is distrust between some residents and the city government.
Any economic boost holds the potential for both excitement and fear. As an area becomes more attractive, property values increase. Rents and property taxes are likely to go up, making it difficult for lower-income families and individuals to remain.
Some objected to specific properties that had been put into the TIF (noted below); some said they felt the TIF would do little to help current homeowners and they felt threatened by the prospect of “outside” developers and the prospect of gentrification; others felt the area would improve economically just as well without the TIF; still others voiced blanket opposition to any TIF in Evanston.
Some residents living in or near the TIF area said they did not feel that the promised improvements, such as bolstering existing businesses, repairing and rehabbing homes to withstand climate change and creating or maintaining affordable housing would benefit current residents.
Other TIF opponents have said that, despite a commitment to affordable housing within the TIF, they fear that city officials may not carry through on that promise or that any affordable housing created will not be for current Fifth Ward residents – or both.
Even the name, the Five-Fifths TIF, was objectionable to some. Evanston resident and activist Darlene Cannon said, “The Fifth Ward TIF was to make Black people whole. I want to understand how this TIF is going to make Black people whole.”
In response to the strong opposition to the name, city officials suggested residents could refer to it as “TIF No. 9.”
Fears of gentrification in the Fifth Ward
Some residents of the Fifth Ward have said they fear an increase in property taxes will force them out of Evanston.
“So what happens to existing residences and businesses?” asked property owner and landlord Carlis Sutton at one of the summer meetings. “How are their property taxes impacted by a TIF and the subsequent development of the area? And what may happen to some of the rest of us is that we’ll see an increase in property tax.”
“It’s a real challenge to try and improve an area without … making it so attractive that you end up pushing out the folks that were intended to be helped,“ said lawyer and activist Jeff Smith at a meeting this summer of which he was co-moderator.
“It’s a real challenge to try and improve an area without … making it so attractive that you end up pushing out the folks that were intended to be helped.”
“What [city officials] don’t want is property taxes increasing … Yet, as the neighborhood is improved, it becomes more attractive, and housing values and property taxes increase,” Smith added.
Longtime resident Priscilla Giles said, “What we want is our homes, not a business. We’re not trying to make money out of our homes, we came to live. … The TIF problem is a problem. The TIF is not making homes and not even keeping homes for people who have been here in Evanston.
“The people now who are coming in are not looking for homes. They’re looking for a place to live for a period of time, and then they’re on their way. So they want the best money for them. That’s great. … And the City of Evanston is looking forward to this template plan. It’s not looking for homes for original residents.”
Kevin Brown, a lawyer and former city employee said, “City Council … has for the last 20 years been on a track to increase the flow of Black people out of Evanston and has done nothing at all, from a policy perspective, to try to stem that. And so, unfortunately, what I see happening with the TIF is that it’s going to kind of seal the deal, and really prepare the area for the new inheritors.”
Bobby Burns, Council member for the Fifth Ward, countered, saying the city is “being very specific about what the money should be used for. And if anything is counter to gentrification, is counter to the longstanding trend of displacement of residents, is counter to those things that we see in the community [it is this TIF].” He also said he felt there is a lack of trust between some residents and city government.
Gentrification is already occurring … and the TIF will help make development continue at an orderly pace.
Fifth Ward Council member Bobby Burns
Gentrification is already occurring, Burns said at a late-summer meeting. In his mind, he said, the TIF would allow development to continue at an orderly pace; without the TIF, development would be haphazard.
Mutual concerns, dueling ‘agreements’
Burns spent much of the summer on the proposed TIF. He convened and attended public meetings and, with other city officials, met privately with officials from Districts 65 and 202.
School officials shared some of the same concerns expressed by the neighbors, such as fear of gentrification and displacement of residents, Burns said.
In July, an expansive group of city and District 65 officials discussed some of these mutual concerns. Emails the RoundTable obtained via a FOIA request to the city show that Mayor Daniel Biss and then-City Manager Erika Storlie were copied on some of the many emails among and between city and District 65 officials.
An IGA emerges: Biss, Storlie, and City Senior Economic Manager Paul Zalmezak were invited to attend an afternoon meeting on July 26 with District 65 Superintendent Devon Horton, Assistant Superintendent LaTarsha Green, Chief Financial Officer Raphael Obafemi, School Board President Anya Tanyavutti, School Board Vice President Elisabeth Lindsay-Ryan and Manager of Student Assignments Sarita Smith.
The RoundTable has no record of the agenda or minutes of that meeting, but shortly afterward, the subject of an intergovernmental agreement appears in an email from Obafemi to Burns.
On July 26 after the meeting, Obafemi wrote in an email to Burns that District 65 representatives “shared key things that the district is interested in including in an intergovernmental agreement. To recap, the district is interested in ensuring that current residents of the 5th ward are not gentrified/priced out of their homes.
“Additionally, the district is committed to providing/maintaining affordable housing in the Five Fifth designated area with particular emphasis on 2-3 bedroom dwellings and larger.”
The email did not elaborate on how District 65, which takes 41% of the property tax bill, would ensure that residents would not be “priced out of their homes” or how it would implement its commitment to providing or maintaining affordable housing.
Later that afternoon, Zalmezak emailed Obafemi to nail down “common terms” and work on a draft of an IGA between the city and District 65. Burns emailed Obafemi and Zalmezak to set up a phone call before the District 65 School Board’s scheduled July 27 retreat “to make sure we’re on the same page about what the city would like shared regarding our TIF plan.”
The city’s resolution: Common interests notwithstanding, the city’s law department said the city’s “position and intentions” regarding the TIF would be best suited by a resolution rather than an IGA.
At 5:35 p.m. on Sept. 3, Zalmezak emailed the “District 65 partners,” informing them that the city’s law department determined a resolution was “the best way to memorialize the school district’s concerns … A memorandum of understanding (MOU) or Intergovernmental Agreement (IGA) would not be an appropriate vehicle, as the responsibilities of administering the TIF is placed singly on the City Council. The resolution provides a mechanism to affirmatively and publicly commit to our shared objectives, and to be held accountable to the community. … The resolution and ordinances will travel together through our legislative process.” He attached a draft of the resolution to his email.
Five minutes later, at 5:40 p.m., Zalmezak wrote to the “team” that he had “made a change to the resolution to include your request that we explicitly state we will not use TIF for a new 5th Ward School …” The new, Sept. 3, language in the resolution read: “Section 8: The City commits to not supporting the use of TIF funds for eminent domain, neighborhood clearance, funding for a new Civic Center, funding for a new Fifth Ward school, or funding for luxury housing/microunits.”
District 65 officials rejected the city’s proposal, saying a resolution would not be enforceable but an IGA would be. They prepared their own IGA and sent it to the city in early September.
Two aspects of the first draft of the IGA, which District 65 said it had drawn up without the benefit of legal counsel, stand out: First, District 65 added a third element, a new school in the Fifth Ward, and, second, the District had put on the city all the obligations.
Initially District 65 also required the city to help locate and acquire a site for a new school in the Fifth Ward. Section 3 of District 65’s proposed IGA, a redlined copy of which the RoundTable obtained from the city, provided: “Section 3: City Obligations: Assist in locating site for Fifth Ward School: If requested by the School District, the City shall assist the School District in locating and acquiring appropriate property, including using Incremental Property Taxes, in the TIF district or in the Fifth Ward for a development of a neighborhood school.”
In his comments in the margin of the redlined version, Corporation Counsel Nicholas Cummings wrote the IGA was “unilateral,” obligating only the city and not committing District 65 to any action.
Some of the items in the proposed IGA were not permitted under TIF law, Cummings wrote, and others did not adhere to TIF regulations. He also wrote that in any IGA with the District, the city’s commitments “will match those in the resolution.”
Commenting specifically on the provision about the city’s helping District 65 locate and acquire property for a Fifth Ward school, Cummings wrote in a marginal note that District 65 had said publicly it would build the new school on Foster Field, which it owns.
At a community meeting on the TIF held Sept. 9 at Fleetwood-Jourdain Community Center, Burns announced that the city had received an IGA from District 65 but rejected it.
He and Zalmezak presented the resolution, describing it as a framework to implement means of addressing residents’ concerns. Zalmezak said the resolution was the first of its kind not just in Evanston but likely in the state of Illinois.
In the resolution, the city acknowledges “several members of the community have expressed concerns with the proposed TIF District, including potential displacement and gentrification in the community, and with the potential benefits it will provide the community” and says “the City believes that equity forms the foundation for this proposed TIF plan, and the intended investments and the restrictions recommended by Staff provide assurance that TIF funding should be devoted to those most in need.”
Although state TIF legislation allows the use of eminent domain, the City of Evanston has never used that power in a TIF district, and the resolution states that will be the case with this TIF.
The final element in the draft resolution was the creation of a seven-member TIF Advisory Committee, appointed by the mayor, to review and provide recommendations on expenditures of funds for certain projects.
Council postpones vote
At its Sept. 27 meeting, Council was scheduled to discuss the resolution, along with other documents relating to the TIF.
Although the District 65 Board had not discussed the IGA in public, two members of the District Board appeared at the virtual Sept. 27 City Council meeting to urge Council members to approve an IGA between the city and District 65, even delaying that evening’s vote so the city and the district could work out terms of an IGA.
Board President Anya Tanyavutti said the IGA was drafted by District 65 officials. She read in English a letter from the entire Board, and Board member Sergio Hernandez then read the letter in Spanish.
The letter said District 65 officials were disappointed in the city for not honoring the IGA, which the district said had been negotiated in “good faith.” It also said District 65 might not support the TIF without there being an IGA in place.
Council then postponed the vote on all the TIF documents until Oct. 25 so the parties could continue to negotiate terms of an IGA.
Negotiations continue
Between Sept. 27 and Oct. 22, representatives of the city and School District 65 continued to negotiate terms of an IGA.
The parties negotiated wording and agreed to add a new provision about the possible Fifth Ward School. Section 4 of this version of the IGA obligated the district 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.”
In an email to Burns on Oct. 20, Tanyavutti, the District 65 Board president wrote, “I hope that we are able to follow through on these verbally discussed and agreed on items …”
TIF legislation passes without an IGA
On Oct. 25, City Council approved the Five-Fifths TIF. A convoluted procedural path, however, led to Council’s ultimately rejecting the IGA by a 5-4 vote on Oct. 25.
There is no mention of a Fifth Ward school in the resolution Council approved that night.
Section 10, however, authorized “the City Manager or her authorized designee” to negotiate the terms of an IGA with School District 65 “that it is deemed to be in the best interests of the City.”
More than a tiff about a TIF
District 65 officials reacted to the City Council’s rejection of the IGA with a letter that expressed disappointment, an offer to resume negotiations or, as a last resort, the threat of legal action.
An undated letter signed by all seven District 65 board members that was posted on the District 65 website and distributed to local media after the Oct. 25 vote stressed the behind-the-scenes work both the district and the city had put into negotiating the IGA:
“Our two parties have been in negotiations and working towards reaching an agreement for months now. Our team has been under the impression that the City was negotiating in good faith based on its actions and representations that were in support of the agreement. Similarly, negotiating seemingly shared terms with legal and political representatives, and then subsequently declining to take the final steps to formalize them. This pattern erodes trust …”
On Nov. 5, Brian Crowley of the Chicago-based Franczek law firm, which represents District 65, sent a letter to Corporation Counsel Cummings saying the “Board is extremely disappointed” at the Council’s rejection of the IGA.
The letter reiterated that the District had “engaged in good faith negotiations with the City for months” and “acting in good faith, withheld its opposition [to the TIF] because it was under the misguided belief due to the City’s actions that the parties had reached agreement regarding the IGA.”
It is “imperative,” the letter stated “that both parties find a way to work together in a more collaborative and transparent manner.”
The letter asked for a revenue-sharing agreement with the city – “or by other legal means available to the District – with the city that would include property tax revenues from the 1815 Ridge Ave. property as well as proceeds from the sale of the Civic Center.”
The District requested that the city provide a revenue-sharing agreement by Nov. 12 so the parties would be able to present the agreements at their respective December meetings.
“Should the parties not reach agreement in a timely manner,” the letter continued, “the District will review its legal options. The District is hopeful, however, that the parties will instead reach agreement and that the District and the City will return to a collaborative working relationship in the best interests of their shared residents.”
At present
Corporation Counsel Cummings told the RoundTable on Dec. 17 that the city’s Law Department “is not engaged in any negotiations at this time. It is my understanding that the parties are talking without lawyers. As a result, I am unaware of what stage negotiations are in (if any stage at all).”
That same day, the RoundTable filed a Freedom of Information Act request to obtain correspondence between and among city officials and officials of District 65 and District 202 that had occurred between Oct. 25 and Dec. 17.
On Dec. 23, the City Clerk’s office notified the RoundTable that the request was “determined to be unduly burdensome pursuant to Section 3(g) of FOIA. The extraordinary volume of documents (estimated to be over 1889 emails and thousands of pages and estimated 40+ staff hours and multiple staff members to fill the request is too burdensome on City resources to produce the request as drafted.”
After receiving the denial, the RoundTable narrowed the request; a response is expected in January, and, if relevant documents are produced, the RoundTable will report that.
What’s next?
Although mention of a Fifth Ward school was eliminated from the resolution City Council approved in October, the idea of a new school there hangs tantalizing in the air. District 65 has lost about 1,000 students over the past two years and has engaged a firm to assess its buildings, with the possibility of closing one or more schools. The proceeds, then, could be used to build a school in the Fifth Ward – without the District’s having to gain residents’ approval through a referendum.
STEM School Evanston, a group of residents organized to promote a Fifth Ward school, is proposing Foster Community Campus, an education/ social services/ hub, linking a Fifth Ward school with Fleetwood-Jourdain Community Center and Family Focus, possibly in collaboration with District 65.
Since Foster School was closed more than 50 years ago, many community members and Foster School alums have said they would like to see a neighborhood school restored to the area. Accompanying the attractiveness of a neighborhood school are the risks of desirability, increased housing costs, higher taxes and gentrification.
Information gleaned from the city and District 65 emails indicates that, should an IGA materialize on a City Council agenda next year, it might deal only with sharing property tax revenues on certain parcels in the TIF.
The city’s resolution and the TIF Advisory Committee, then, along with watchdog residents, stand to help longtime residents of the Fifth Ward, many on fixed incomes or with low incomes, continue living in the area they call home.
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‘Controversial’ properties in the TIF
Local real estate agent Mary Rosinski, who has also been an advocate for several Evanston causes, said she did not believe there was need for the TIF. The private properties, she told the RoundTable, are “hot” – some of them selling for hundreds of thousands of dollars.
Further, “there are 14 acres of public property in the TIF,” she said. Among the public properties are the Morton Civic Center, Fleetwood-Jourdain Community Center, the Family Focus Weissbourd-Holmes building and Foster Field, which lies between those two buildings.
Foster Field: Whether Foster Field would be the site of a new public school was the subject of summer emails between School District 65 and city officials.
Morton Civic Center: City officials have discussed for several years the prospect of relocating offices from the present building at 2100 Ridge Ave., citing wasted space, ill-suited rooms and the high cost of repairs and maintenance for the building, which once housed a Marywood Academy, a Catholic girls school.
Many of those who objected to that property’s being placed in the TIF pointed to a 2007 referendum in which more than 80% of those who voted supported having the city offices remain on the Ridge Avenue site.
1815 Ridge Ave.: The inclusion of the senior high-rise complex at 1815 Ridge Ave. troubled some residents, because the reason appeared to be that the city could garner the tax increment and “feed” the TIF. City officials confirmed that was the reason to include the property.
Although the building has been completed, the Cook County Assessor has not yet reassessed the property to take into account the improvements. Because of the delay in the new assessment, the property will go into the TIF district as “unimproved” and the increase in property taxes due to the new building may go into the TIF fund.
In a previous interview with a RoundTable reporter, District 65 CFO Obafemi said he estimated that the district would be unable to collect about $900,000 in tax revenues annually because that property is in the TIF district and those revenues would go into the TIF fund for the life of the TIF, typically 23 years. The other affected taxing bodies would similarly be proportionally deprived.
Great article, as always, Mary, but some of this reads like fiction. This City.