At the Sept. 25 meeting of the Joint Review Board, the members present unanimously agreed to recommend that City Council expand the physical space of the Howard-Ridge tax-increment financing (TIF) district.
A TIF district is a form of economic development, because the tax increment – the difference between the tax revenues property at the time the TIF was created and property as improved – can be used to finance improvements there. For example, TIF financing in Evanston allowed for the creation of the Howard-Hartrey shopping plaza, the two large downtown parking garages and the revamping of Fountain Square.
Because the City retains the tax increment for improvements within the TIF, the taxing bodies that have a stake in the property tax revenues from the TIF property must approve any changes in the TIF agreement . Representatives of those taxing bodies comprise a joint review board.
Representatives from Cook County, School District 65 and School District 202 attended the meeting, which Eighth Ward Alderman Ann Rainey chaired.
The recommendation to City Council is that the Howard-Ridge TIF, which for the most part stretches along Howard Street from the CTA tracks to Ridge Avenue, be extended west along Howard Street to Ashland Avenue on the Evanston side of the street. While the physical boundaries of the TIF would be expanded, the 23-year life of the TIF, created in 2004, would remain the same.
The equalized assessed valuation, or EAV, of the amended area was $5.4 million in 2018.
Robert Richlycki, president of Kane, McKenna and Associates, Inc., the City's TIF consultant, described the process of expanding a TIF district.
The current Howard-Ridge TIF was successful and highly focused, he said, and expanding it to Ashland Avenue [the “Amended Area”] would allow for continued development, which would result in “higher EAVs and enhanced vibrancy to the Howard Street area at the end of 23 years.”
The proposed amendment area conforms to the City’s Comprehensive Plan and meets the “but for” requirement – that there would be little economic development but for the TIF.
Factors for Expansion
To be considered for a TIF district, the area must be deemed a “conservation area.” The State of Illinois lists 13 factors, meeting any three of which will qualify an area as a conservation district.
Mr. Richlycki said Kane, McKenna found the proposed west Howard Street expansion area, consisting of 53 contiguous parcels, qualifies under the following factors:
• Obsolescence: 73% of the buildings are 35 years or older; pursuant to the TIF Act at least 50% of the buildings must be more than 35 years old
• Deleterious layout: Commercial building lot-coverage ratios far exceed today’s zoning regulations and preclude on-site parking for customers. This is incompatible with and compromises retail uses. Traffic flows and circulation along Howard require coordination of curb cuts and internal traffic circulation that integrate with existing land uses.
• Inadequate utilities: Existing water mains and sewer mains are estimated to have been constructed in the 1920s and water mains are in “poor” condition. Sanitary and storm sewer mains are in “fair” condition.
• Lack of community planning: Almost 50% of the structures were developed prior to the City’s adoption of its first comprehensive plan in 1972, in an uncoordinated, piecemeal fashion. Consequences of a lack of community planning in the area include poor traffic circulation, inadequate parking, incompatible land uses, irregular building setbacks, excessive lot overage ratios and inefficient ingress/egress to properties.
• Lagging EAV: The growth of the area has not been as robust as in other parts of the City, Mr. Richlycki said. In 2016, when the EAV of the City, except this area, increased by nearly 22%, the amendment area increased by only about 9%; in 2018, when the City’s EAV decreased by 0.71%, the EAV of the amended area decreased by 3.48%.
Raphael Obafemi, Chief Financial Officer and Chief Operating Officer of School District 65, asked, “To what do you attribute the growth?”
Mr. Richlycki said reassessments and development were most responsible for the increased EAV.
Mary Rodino, Chief Financial Officer of School District 202, said, “I’m really happy that [the amendment] is not going to extend the life of the TIF. It’s only seven years – seven years is nothing.
“Part of the reason the school districts have been so supportive is that TIFs have performed so well.”
She added, “We think of them as an investment.”
Karen Courtwright, a resident who attended the meeting, questioned whether seven years is sufficient time for economic development there to succeed.
Ald. Rainey said, “We’re counting on some of the successes and [the expanded TIF] is all one piece. It felt natural for the City to do this. We want to continue the successes. The City has a Comprehensive Plan and economic goals – it fits in well.”
She mentioned several businesses in the original Howard-Ridge TIF that have succeeded without using TIF funds, such as Good to Go and North Shore Cider Company.
Ms. Courtwright said, “This is very important. The TIF district to the east of Ridge has been very successful without developments on the Chicago side. We’re going to be limited as to how beautiful Howard Street can be.”
Mohammed Elahi, Deputy Director of Economic Development in the Bureau of Economic Development in Cook County’s Planning and Development Department, remarked on the collegial nature of the conversation and the support of the school districts.
“I have never seen a joint review board meeting like this. I wish you would come to all JRB meetings,” he said.
A public hearing on the proposed TIF expansion is scheduled for 7 p.m. on Oct. 28 in City Council chambers, 2100 Ridge Ave. Council members will later vote on a proposed ordinance expanding the TIF. Should it be approved, the documents will be filed with the County Clerk.