The new Trulee high-rise at Ridge Avenue near Emerson Street is included in the Five Fifths TIF district. (RoundTable photo)

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Evanston City Council members have approved an intergovernmental agreement (IGA) with local School Districts 65 and 202 assuring them a slice of the revenues from the one major development in the newly established Five Fifths Tax Increment Financing District.

In a tax-increment financing (TIF) district, the increment of property tax revenues – that is, the difference in property tax revenues on a parcel as it goes into the TIF (“unimproved”) and as it is developed over the life of the TIF, typically 23 years – remains within the TIF to pay for improvements there. Taxing bodies affected by the TIF receive their allocations based on the “unimproved” value of the properties, leaving the increment within the TIF. Together, the school districts get about 68% of the property tax revenues and the city about 20%.

The IGA allocates the school districts somewhat less than what they would have received if the property were not in the TIF. The city has entered into revenue-sharing agreements with the school districts in the past, and a resolution accompanying the vote last fall to approve this TIF contemplated a revenue-sharing agreement with the school districts.

Some background

In September of last year, City Council delayed its scheduled vote on the then-proposed TIF district in the city’s Fifth Ward so that the city and Evanston/Skokie School District 65 could craft an IGA on sharing revenues. A month later, council members by a narrow margin rejected the resulting agreement.

Instead, the City Council approved a resolution that outlined how the TIF funds would be spent to help the current residents and bolster Black businesses in the ward.

Representatives from the city, District 65 and Evanston Township High School District 202 have been working since October on an IGA with negotiations, at least in the beginning, taking place without the presence of lawyers for either side.

On March 28, City Council approved an IGA with the two school districts.

The tax increment from the property at 1815 Ridge Ave. and the promise of discussion if the Civic Center were to be redeveloped privately were the main points of the just-approved IGA. An agreement between the city and the Open Space Land Acquisition and Development (OSLAD) division of the Illinois Department of Natural Resources, however, may add a layer of red tape.

Revenues from the Trulee property, 1815 Ridge Ave.

Under the IGA, the school districts will annually receive 80% of the property tax revenues on the Trulee property they would have otherwise received. 

A memo from City Attorney Nicholas Cummings accompanying the IGA states, “The Agreement establishes that the Districts will receive 80% of the amount they would have received [from property taxes on the Trulee property] if not for the establishment of Five-Fifths TIF District. The funds will be paid from the TIF fund and are to be used for TIF related purposes such as expenses related to building a school in the Fifth Ward and workforce development training and programs.”

Trulee Evanston is a nine-story high-rise for senior citizens at the intersection of Ridge Avenue and Emerson Street. Because of its location relative to the other properties in the TIF and because it was already completed, it was considered an outlier by many who opposed the TIF.

City officials defended including the property and said on more than one occasion that the building would be a revenue-generator for the TIF, particularly in the early years, before other improvements are made.

District 65 also expressed concern about having the property in the TIF, projecting a loss of approximately $900,000 annually for the 23-year life of the TIF. Per the IGA, then, and using figures from District 65 Chief Financial and Operations Officer Raphael Obafemi, the district could receive about $720,000 annually from this property.

If the Civic Center site is developed …

“Should the City redevelop the Civic Center, the parties agree to engage in good faith discussions regarding possible revenue sharing for said redevelopment,” the IGA states. Although there has been no formal discussion about selling the Morton Civic Center property, there is a strong undercurrent about a potential sale, likely to a private developer.

City officials have pointed to the cost of repairs and maintenance to the building, at 2100 Ridge Ave., formerly a Catholic girls school, Marywood Academy, built in 1900. One idea is to move city headquarters to the downtown area, possibly consolidating the public safety offices – now at 1454 Elmwood Ave. and 909 Lake St. – with city government offices.

Proponents of keeping the current building on Ridge Avenue point to a 2007 referendum in which more than 90% of votes cast favored keeping the Civic Center where it is. Nonetheless the city has approved two measures that point to a willingness to sell the property: separating the Ingraham Park parcel from the Civic Center parcel and hiring a consultant to assess potential alternative locations for the seat of city government and evaluate the costs and benefits of relocation.

Foster Field and the Fifth Ward School

Initially, District 65 expressed concern that the TIF would speed gentrification in the Fifth Ward and asked for the city’s help in its pursuit of constructing a new school in the Fifth Ward. The district then withdrew that request but something similar appears in the IGA; it permits the school districts to use TIF funds for land acquisition, infrastructure improvement, and job training, among other things.

The IGA states, “The School Districts may use the School District Payments for capital and vocational education purposes, pursuant to current Sections 4-3(q)(7) and (10) of the TIF Act.

“For purposes of this Agreement, the term ‘capital costs’ shall include costs of all real property, and all personal property having a value in excess of $300 and, having a useful life of six (6) months including, but not limited to:

“(i) Acquisition of land to serve the immediate or future needs of children from the development;

“(ii) Improvement to any existing school site which already serves such needs;

“(iii) Development of classrooms, parking lots, sidewalks, traffic signals, internal roadways, connections with water, sewer and electrical lines; playgrounds; recreation grounds and athletic fields;

“(iv) Remodeling or renovation of school facilities;

“(v) Purchase and prefabrication of classroom units;

“(vi) Material, goods or equipment as set forth in Exhibit A of the Illinois Program Accounting Manual for Local Education Agencies.

“In addition, for purposes of this Agreement, the terms ‘job training, advanced vocational education and career education’ shall include the School Districts’ costs of operating the programs” that are described in exhibits attached to the IGA.

Foster Field, where District 65 says it plans to build its new school, lies along Simpson Street north of Fleetwood-Jourdan Community Center and along Ashland Avenue east of the center. Through a lease with the City of Evanston, the basketball and tennis courts there are used for youth recreation and sports. The lease will expire May 31.

Under a 2008 agreement with the OSLAD division of the Illinois Department of Natural Resources, the city received $400,000 – just under half the projected cost – for the redevelopment of the basketball and tennis courts at Foster Field. The Agreement states that the site must be used only for public outdoor recreation.

While the city’s lease of Foster Field expires in May of this year, the OSLAD agreement continues through 2028. There are penalties for building structures on land acquired through an OSLAD grant except for those that support the purpose for which the funds were given. However, the grant to the city was for development rather than acquisition, and such a situation is not contemplated in the Agreement.

The Agreement does, however, require approval in writing from the Department of Natural Resources for any “significant deviation from the project,” the outdoor tennis and basketball courts. While the district has said it plans to build the school on Foster Field, it has not indicated that it plans to take over these courts.

Council members unanimously passed the IGA on the consent agenda, with one council member absent. 

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