The City of Evanston became the first documented governmental body in the country to enact a sustained policy of reparations for the harm done to Black citizens.
The RoundTable offers information about the city’s historic reparations program, its roots and how it has developed over the years. It’s a story in multiple parts: The origin of reparations in Evanston, recent developments in 2021-2022 and an examination of how the effort is funded, below.
Reparations have been slowly trickling out since the first 16 recipients were randomly selected in January. There are still 132 “ancestor” applicants who are awaiting their $25,000 grants from the Local Reparations Restorative Housing Program.
The Reparations Committee prioritized the ancestor applicants, people who lived in the city between 1919 and 1969.
As of Sept. 1, six ancestor applicants have died before receiving any grant and without naming a beneficiary, according to city officials. Those deaths reduced the number of ancestor applicants to 132.
The Evanston RoundTable previously had reported that there were 122 ancestors, but 16 reparations applicants originally categorized as “descendants” were found to be ancestors instead, thus bumping the total number of ancestors to 138 before the six ancestors passed away, according to city officials.
Evanston has received some donations in support of the city’s reparations effort. Donations to the city’s fund are separate from the fund maintained by the Evanston Community Foundation on behalf of the Reparations Stakeholders Authority of Evanston.
Tasheik Kerr, assistant to the city manager, stated at the last reparations committee meeting that the city has a total of $35,643 from donations to the reparations fund as of Aug. 31. But that doesn’t come close to covering grants for the remaining ancestors.
The City Council passed a resolution in August that permits $3.45 million of the promised $10 million for reparations to be disbursed to recipients as the funds come in.
Many may be wondering, “What’s the holdup?” The delay is in part because there is just a single cannabis dispensary funding the city’s reparations program. The city recommends a maximum of three marijuana dispensaries, but efforts to attract additional stores haven’t been successful.
The city says it can’t publicly share revenue statistics from its sole dispensary, Zen Leaf. Evanston has to remain tight-lipped to avoid breaching the confidentiality of the business under state law, according to city officials.
Municipal cannabis tax
Evanston levies a 3% tax on recreational cannabis sales within the city, the maximum allowed under the Municipal Cannabis Retailers’ Occupation Tax (MCAN) law, and uses the proceeds to fund its reparations program. The state treasurer collects an administrative fee for managing the MCAN tax, 2% of the money collected.
The cost of cannabis in Evanston is equivalent to what is charged in Chicago, in part because both cities tax marijuana products at the same rate.
The RoundTable compared the estimated sales tax and local tax of three cannabis product types sold at Zen Leaf locations in Evanston, Chicago West Loop, Aurora and Highland Park, and prices were lower in municipalities with lower taxes.
The Zen Leaf locations in Evanston and Chicago had the same sales tax and local tax for marijuana edibles, flower and vapes. But some prices in Aurora and Highland Park were nearly $4 cheaper than in Evanston and Chicago.
The MCAN user tax doesn’t apply to medical cannabis. It applies only to adult recreational cannabis purchases.
In July, the city said it was mistaken when it reported that the reparations fund held a total of $69,303.79. Somehow revenue from the medical cannabis tax, which is not dedicated to reparations, was added to the funds, Kerr said in a July 17 memo.
Hitesh Desai, City of Evanston Chief Financial Officer, told the RoundTable the figures were a mistake. “I don’t know exactly why it happened,” Desai said. “We have tons and tons of money coming in, you know, and sometimes it’s misposted.”
Since Evanston passed an MCAN tax ordinance, no cannabis dispensary in the city can refuse to participate in funding reparations.
Recruiting another dispensary
The Illinois Department of Revenue announced in July that 119 Conditional Adult Use Dispensing Organization Licenses were awarded to the Chicago-Naperville-Elgin area (Bureau of Labor Statistics Region Five), which includes Evanston.
Conditional cannabis license recipients can operate in only the region where their application won.
A conditional cannabis license doesn’t mean that the recipient is able to immediately begin selling marijuana. The conditional license marks just the first step to the recipient receiving the required Adult Use Dispensing Organizing license.
Conditional license recipients have 180 days to find a location for a dispensary. The local government then has to approve that location and the Illinois Department of Financial and Professional Regulation has to sign off on the dispensary’s floor plans. Lastly, the conditional license recipient has to pass a background check.
Evanston already has one cannabis dispensary downtown, where there is the most foot traffic. A dispensary can’t open within 1,500 feet of another, though Social Equity and Social Equity Justice Involved applicants are exempt from this prohibition.
In August, the city reached out to law firms representing all of the 119 newly approved conditional licenses in the region in hopes of attracting another dispensary to Evanston. There isn’t much contact information for the people behind these licenses aside from the law firms representing them, city officials said.
“Then the law firm has to decide if they’re going to pass it on to their client,” said Paul Zalmezak, the city’s Economic Development Manager. “And in past experience, I found that attraction efforts are very, very difficult.”
The city’s letter included an Evanston zoning map indicating where dispensaries would be allowed, as well as a list of available spaces.
The city made a point to mention in the letter that Zen Leaf leases a city-owned retail space. “I think it just shows our commitment to this endeavor,” Zalmezak said.
But despite the city’s efforts, opening another dispensary in Evanston is going to come down to whether business owners see this area as a good market or not.
“That downtown location Zen Leaf is at is premium,” Zalmezak said. “It’s accessible to all of Evanston and has parking attached to it. … But once you drift outside of downtown, you get more of a neighborhood focus, and you lose those households that can support it. So that’s going to be interesting, to see what the marketplace does.”
The city plans to reach out to conditional license holders again in October.
Other funding options
Robin Rue Simmons, who launched the city’s reparations initiative and the chair of the reparations committee, initially suggested that the city consider a graduated real estate tax to fund reparations and meet its goal of distributing $10 million in 10 years. An example she gave was taxing properties that were sold for more than a million dollars.
The new cannabis tax seemed like another timely revenue stream. Simmons has said it was an appropriate way for Evanston to rectify the police’s history of overpolicing the Black community for cannabis use.
At a June 2022 Reparations Committee meeting, City Attorney Nicholas Cummings said he has looked into using the city’s general fund and the city’s real estate transfer tax. Cummings advised against using the general fund.
All taxpaying citizens contribute to the city’s general fund, so to give a portion of those funds to a select group for reparations could violate the Equal Protection Clause of the U.S. Constitution, Cummings said.
Cummings said he didn’t see any legal issues with using the city’s real estate transfer tax. But the committee and city haven’t made any progress toward pursuing this option, Kerr has confirmed to the RoundTable.