City Manager Tackles Question: Why is the City Spending So Much Money

Editor's Note: This is the continuation of to discuss her concerns about the city paying to build parking near the new Trader Joe's. Yesterday, Bobkiewicz discussed . Today, the discussion's focus is on other economic development initiatives in the city, particularly along Howard Street.

From the amount of money, though, what I think a lot of people — especially a few aldermen I’ve spoken with — their big concern is 'The Money. The Money. The Money going out…' Between [this potential parking lot cost] and the Howard Street purchases ... they just want to stop the spending. However, it depends on which way you look at it and what sort of investment this is going to be.

From my perspective, these are investments. We have to be smart about them and every one has a different story. The work that we’re doing on Howard Street is different because that’s really serving as a catalyst for other development. It also has TIF district, so there’s money being generated by the local property owners there that we’re reinvesting, not money we could be spending on police officers, firefighters, fixing streets or anywhere in the community — we’re reinvesting that money that’s being collected in the Howard Sreet area into Howard Street. 

How would you describe what’s going on in the Howard Street District?

Well, there are two projects right now. The city bought a number of properties there, I think it’s four separate addresses, but we really look at it as primarily two areas. One . It has retail space on the ground floor and some housing adjacent to that. And then there’s the City Lit space which is two storefronts along Howard Street. Both are seen as investments.

We’re still sorting through the City Lit piece. We’ve bought the property, but we’re still working out what money would be required to invest in that property. The wine bar is a little bit more straightforward in that most of it is loans, so we’re loaning money to a group that wants to put a wine bar in and wants to make improvements, so it’s money being used to improve property that we own. Again, better than loaning money to someone to improve property that you don’t own. The City Lit piece is a little bit more complicated and we’re still working on that.

But, Howard Street has been, if you look at all of our — about a half-dozen — business districts we have around Evanston, the one that needs the most help. In order for things to start popping there, we need to make investments. That’s why TIF districts are graded, just so that you can collect money from those area property owners, not burden taxpayers from the rest of the community, but focus those monies in the community itself.

With the parking fund, we’re not using general taxpayer dollars to do anything. We’re using money that we have sitting in the bank that we collect through parking fees, both in our decks and at meters. We have a fund balance there that’s pretty healthy, largely cause we’re collecting money so that when the time comes to replace the decks, we have that money to do that. So, in the meantime, that money is earning about .75 percent interest; if we can do better by putting that money into property for more parking and earn more than that .75 percent interest, then that money is working for us in a different way, just strictly speaking, investing the money in that property. But if that’s also then helping the larger project make, you know, four or five-hundred thousand dollars a year, that makes a lot of sense.

So, just to clarify: the money that you would be spending for this Trader Joe’s parking structure already exists?

Yes. We’re not going to have to raise anyone’s taxes to do it. We operate our parking in Evanston like a business, so the money that comes in is put into a separate fund. The expenses that are associated come out of that. We collect money for replacement and so there’s a fund balance there, which we’re spending money out of that fund balance for the purchase of those properties on Chicago Avenue.

Anything else you want to add, particularly about concerns people may have shared with you lately?

It goes back to 'Why is the city spending so much money?' That’s a real big concern. Evanston has been blessed for much of its existence that people want to be here, and that people will come and they will spend whatever money it takes to build a building, open a store … and that all kind of changed in 2008/2009, where those resources just aren’t available. In the meantime, we’ve seen businesses leave Evanston, we’ve seen companies leave Evanston, and, as a city government, it’s one of our charges to try to turn that around.

We can do that a whole variety of different ways, but investing in a community using dollars that we have available for economic development — so our TIF districts are part of that. So, the West Side, we’ve been collecting money on a TIF and not spending it, reinvesting it, so we have that money. On Howard Street, there are two TIFs, so it’s the Howard/Ridge which is being used for the wine bar and the City Lit project and then there’s one further down, the Target shopping center is also in a TIF, known as the Howard/Hartrey TIF. So using TIF dollars. The city also has an economic development fund, which it takes the hotel tax … that money’s been largely unspent, so we’re starting to invest that money. And then just trying to be creative. So, the use of the parking money is an attempt to be creative there.

I feel the City Council’s number one priority — and I take them through a priority-setting exercise every year — has been economic development. And so, as the Council’s number one priority, we’ve gotta be active and aggressive to bring businesses here that will, depending on the part of town, make a difference to that economic engine, and that’s many different things: arts like City Lit; Retail like Trader Joe’s. Trying to look for office space … we’ve been trying to build an office building at Main and Chicago. Likeley we’ll create a TIF district to do that to create more jobs at one of only five places in the Chicago area where there’s both a Metra and a CTA station.

So it’s more than we’ve done. After Evanston did the downtown theater project, there really hasn’t been anything. And prior to that, there really wasn’t very much … so it’s been what, five, six years where the city’s been involved. The other commercial developments just sort of happened because Evanston’s a lovely place and why wouldn’t people want to come and spend here?

The business dynamic has just changed a little. The city needs to step up and be a catalyst in some of these areas. People are still coming to Evanston [he points out how Prêt a Manger came because they saw an empty space and a market and set up shop without any encouragement from the city]. There will always be people willing to do that, but I think it’s important for the city to do this. The Council’s been supportive thus far, but I think people are right to say, ‘Well wait a second! What’s going on here?’

Do you get the sense that the council is looking at other things that this ‘pot of money’ [the parking fund for the Maple/Sherman parking decks] could be spent on?

Well, this is money we’re collecting to replace the decks. It’s going to need to grow a lot more and those decks are still pretty new. There’s still maintenance and things … but this is money we have to buy another asset. That’s not to say we couldn’t use the money to buy something else, but…

Do you have City Council voices opposing the use of this fund for the Trader Joe’s parking lot?

Not from the parking fund, no. The only other thing the parking fund will be paying for is that we want to modernize the parking meters around town, so that they’re all whiz-bang electronic … credit cards and change. So parking meters near Ryan Field that are currently 25 cents for 20 minutes … we can make them $5 for 20 minutes or something like that.

But people are right to be concerned, and they’re right to question, and our job as the city is to explain as best we can.

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Following our discussion, I thought about everything Wally said. Most everything made sense, except for the part about not having to raise anyone’s taxes to buy the property and build a parking structure. While we might have money in reserve for parking deck replacements available for use now, won’t we still need to replenish that fund? How and when?

I’m 100 percent in favor of Trader Joe’s coming to Evanston. I’m also 100 percent for adding parking space on Chicago Avenue. I think it’ll only increase revenue at the Chicago/Dempster shops which are frequently hard to park near.  

On the other hand, I appreciate the job that my alderman, Don Wilson, and others on the City Council do to keep Evanston’s spending in check. As Wilson told me this week, “I have concerns and reservations about the way we are spending money to support private businesses. My voting record in the recent past reflects that. While I strongly wish these new businesses all the success in the world, I remain concerned about the city's economic condition and I want to be try to have broader discussions on how we budget support for economic development.“