TIF Lands at Chicago and Main; Developer to Receive $10 Million
1/30/2013 2:29:00 PM
A new tax increment financing district (TIF) passed City Council on Jan. 28 by a 7-2 vote. Proponents said they thought the TIF will spur development of the vacant lot at Chicago and Main and take full advantage of both Metra and CTA Purple Line stations. Documents provided by staff show that the City expects the TIF to provide a $10 million subsidy to the developer of a new office building at that site.
The oddly shaped TIF district stretches from Oakton Street to Dempster Street along the Metra tracks, but expands at the Main/Chicago intersection to include one of the City’s significant shopping districts.
The TIF’s borders were drawn to intentionally exclude any newer buildings in the area, and do not stretch as far as the new AMLI development at Kedzie Street and Chicago Avenue. A critical test in approving a TIF is a finding that “but for” the use of TIF financing, private development would not occur within the district.
The final version of the TIF makes provision for a seven-member advisory council to advise City Council as to how to spend TIF dollars. Members are to be appointed by the Mayor from the Main Street Merchants’ Association and the community at large.
The City also pledges not to borrow any money against increased property value expected to be realized in the TIF district unless and until a redevelopment agreement has been entered into by the City, OMS-Evanston – the owner of the vacant lot at Chicago/Main – and a developer to place a mixed-use office and retail building (and nothing else) at that site.
Staff anticipates that a new building there will cost between $20 and $30 million depending on its size. Third and Fourth Ward aldermen (Melissa Wynne and Don Wilson, respectively) will work with staff and OMS-Evanston on this plan.
The TIF is expected to generate about $25 million in property tax increase over its 2013 baseline during its 23 years of existence.
The $10 million subsidy toward the retail/office building at the vacant lot is expected to include $4.5 million for a public parking structure within the proposed new building, $2.5 million toward “demolition and grading” at the now-vacant site, $2 million toward interest payments allowed under Illinois law, and another $1 million for professional services, says a City memo.
Although site has been vacant and graded for a number of years, City Manager Wally Bobkiewicz told the RoundTable that “site preparation, remediation, demolition and site-grading” is a category of allowable expenses under Illinois TIF law. He added that he believed the developer would incur $2.5 million of expenses in that category, most likely in site preparation.
Mr. Bobkiewicz called the TIF “an investment in the changing priorities in this community: … All the things that represent the future of Evanston are in this TIF.” He cited CTA and Metra buy-in, transit, and the increasing focus on high tech evidenced by the new Gigabit project announced by Governor Quinn.
Ald. Wynne agreed, calling the establishment of the TIF “one of the transformational moments for Evanston. ... This is our opportunity to create jobs and put them at [the Chicago and Main] corner,” she said.
Others were not convinced. Alderman Colleen Burrus, whose 9th Ward contains a tiny sliver of the TIF at Washington Street, said, “The case has not been made for this TIF.” The area is not blighted, she said.
Ald. Wilson also voted against the TIF, though he did not state his reasons on Monday night. In the past, he has said that the TIF needed a detailed development plan in order to gain his support.
The rest of the budget focuses primarily on the CTA and Metra stations, though the details of such expenditures will come out of the $125,000 ($100,000 funded by the RTA and $25,000 funded by the City) Main Street Transit Oriented Development Study Plan, also approved on Jan. 28.
Documents predict that $11.5 million will be available for transit, though that figure appears to include the $4.5 million allocated for the public parking garage expected to be a part of the new office building, as mentioned earlier.
Other money would go to the narrow park in front of the Purple Line entrance ($1.5 million), water main improvements (about $1.8 million), and improvements to the older buildings along Main Street. The budget includes $2.5 million for land acquisition, assembly and relocation, so it appears some older buildings may be demolished and replaced.