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City Council Approves Dempster-Dodge TIF

Aldermen approved enabling legislation for a tax-increment financing district at the Evanston Plaza shopping center during Monday night’s council meeting.

Despite , Evanston’s city council approved creation of a new tax-increment financing district at the southwest corner of Dempster Street and Dodge Avenue.

A vote on Monday night followed weeks of discussion, during which Ald. Delores Holmes (5th ward) about the lease of anchor tenant and aldermen Don Wilson (4th ward) and Coleen Burrus (9th) .

With Burrus absent from the meeting, the council voted 6-2 on three ordinances necessary to create the TIF district. Aldermen voted 5-3 on a resolution to allow City Manager Wally Bobkiewicz to negotiate up to $2 million in initial funding to the shopping center’s new owner, Bonnie Management.  

“This area of town really impacts all of Evanston,” said Ald. Peter Braithwaite (2nd Ward), whose ward encompasses the TIF district. “I think it’s a wonderful opportunity for us to continue to develop that area of Evanston and make economic development a top priority.”

Aldermen Wilson and Mark Tendam (6th Ward) both voted against all four items required to create the TIF district.

“I want the shopping center to succeed. It’s not so much a question of opposing the TIF and opposing something happening at the shopping center,” Wilson said. “To me, it’s not a redevelopment plan. To me, what it amounts to is basically a cash stream for a private property owner.” 

As he had said at prior council meetings, Wilson reiterated his belief that the plan presented by city staff and consultant Kane, McKenna and Associates was not detailed enough to make him comfortable supporting it. He said the draft needed to include more assurances that taxpayer money would be spent toward major changes to make the center more attractive to businesses, not simply cosmetic upgrades that he believed should be the developer’s responsibility. 

“I don’t want to paint it, I don’t want to make it look pretty,” Wilson said. “I want real change effectuated in the neighborhood.” 

Ald. Tendam agreed with Wilson, saying that he, too, did not think the plan had enough detail. The proposal calls for $20 million in tax-increment financing over the next 23 years, including $3 million in utility improvements, $4 million in parking facilities and landscaping, $1.25 million in interest rate subsidies to the developer, $4 million in site preparation and demolition, and $4.75 million in rehabilitation of current structures. It does not specify further how the money would be spent, however, or what the shopping center’s new layout might look like. 

At previous meetings, Ald. Burrus has said she did not like the idea of spending so much money on a project with just one developer.

“That’s almost $1 million per year to one owner for one site,” Burrus . “It just doesn’t make a lot of sense to me when we have other opportunities to use economic development to help this site.” 

Ald. Holmes’s concern was about the shopping center’s biggest tenant, Dominick’s, whose lease runs out in eight years. A resolution added to the package, authorizing the city manager to negotiate with Bonnie Management, was designed to address that concern.  

Following Holmes’ suggestion, Mayor Elizabeth Tisdahl wrote a letter to Dominick’s vice president of real estate for the Midwest, who is based in Canada. At first, he said he would not be able to speak to city staff; then he said would, but the city has since been unable to get in touch with him, according to Bobkiewicz. The resolution authorizes Bobkiewicz to negotiate up to $2 million in financing for the project over the next seven years.

Given that Dominick’s around the country are leaving facilities when their leases run out, Bobkiewicz said he believed the initial investment would give the developer leeway to get started on improvements without committing to major changes before a more permanent anchor tenant is determined. The resolution was also designed to rest council member’s worries that the city might sign off on $20 million to Bonnie Management overnight, Bobkiewicz said. 

“We just want to have some latitude to deal with it,” he said.

Bobkiewicz estimated that the TIF district would generate $3.6 million in the next eight years, and said the city would likely borrow the $2 million against those projected funds. 

Ald. Tendam, Wilson and Judy Fiske (1st Ward) opposed the resolution giving Bobkiewicz the authority to negotiate with Bonnie Management. Like Wilson, Fiske said she believed the preliminary needs were work that should be completed by the landlord, not funded by the city. 

Now that the TIF district is approved, Bobkiewicz said city staff will come back to the council within the next six months with a plan to make the first allocation to the developer. He said future TIF plans—like a proposal for a new redevelopment area at —will come to the city council in greater detail going forward. 

“We came to you with a model that has been used for every previous TIF in Evanston,” Bobkiewicz said. But, he added, “We hear you, we understand the importance of setting very specific parameters on the spending of this money.”

 

 

 

Eric Lieberman June 26, 2012 at 01:37 PM
Unfortunate choice by the city council. And, cudos to Ald. Wilson for being a voice of reality on the council. As I said when I previously addressed a council meeting on this issue: Bonnie Management bought this development with full knowledge of the conditions of the center, the empty stores, the need for build outs and improvements, etc. Bonnie Management is an experienced real estate developer and owner. It defies all logic and experience to think that Bonnie did not negotiate a reduced price for this property based on these factors. It is ludicrous to believe otherwise. Or, did Bonnie factor in an undisclosed promise that they would receive a TIFF from the city, maybe to lessen the loss suffered by the seller? I shop regularly at this shopping center - the world's friendliest Radio Shack guy works there - and I would love to see it flourish and prosper.Bbut I abhor government needlessly spending dollars to support private business. We have better things to do with our money. Eric Lieberman Candidate State Representative - 18th District
Lisa L. June 26, 2012 at 06:33 PM
I am grateful that they city is investing in this property. Dempster is the main access to Evanston from the highway and does not give a positive impression to those new to the area. If all you knew was Dempster you would have a very skewed perception of our amazing city. I'm hoping that this plaza will bring fresh energy and new life to one of our biggest thoroughfares.
Cindy June 26, 2012 at 07:24 PM
I am happy the TIF was approved for this West Side eye sore. I am hoping some of the TIF or the majority of it will be used to redevelope and maybe tear down t he structure for something more pleasant to the eye, also something that would attract business(s) to the area. We definitely need to redesign and restructure. It would be nice to see a plan...for potential design and what plan to attract business(s) to the area. Where can I get this? Thanks
jim June 26, 2012 at 08:29 PM
The was a FORCLOSED PROPERTY that Bonnie bought to make money. GUess THEY WILL OUT OF THE PROPERTY TAXPAYERS OF EVANSTON POCKETS.
lucas July 13, 2012 at 02:10 PM
City should work with Felony Franks to open up in Dempster/Dodge Mall or in one of the places it owns on Howard. Street

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