Evanston’s economic development committee will recommend that the City Council approve a contract with James Klutznick of developer Thomas J. Klutznick Co. for the construction of the Sherman Plaza provided that Klutznik drop a provision in the contract that would allow part of the development to become tax-exempt in 16 years.
The contract will be introduced to the council Monday and could be approved July 5. Both Evanston and Klutznik want a contract in order before July 16, when Klutznik will complete his purchases of stores currently on the development site.
The contract as written creates the option for 200 residential apartments to become tax-exempt on Sept. 2, 2017. That provision riled up several committee members, who are relying on the project to bring in much-needed tax dollars to the city.
“We’re not doing this project just to provide homes for the occupants – we’re doing it to expand our tax base,” said Ald. Arthur Newman (1st).
Aldermen also asked Klutznick to clarify a passage defining Klutznick’s ability to place signs in a proposed 1,420-space parking garage that is part of the project.
Committee members also stressed Evanston’s wish that retail outlets take up most of the plaza’s space. Klutznick is entertaining offers to include a health club in the plaza. That plan has drawn fire from the director of the local YMCA, Tony Lee, who doesn’t want to see his members flock to the new health club, as well as from council members who want the increased revenue that sales tax brings.
But Klutznick said the health club was an “integral component” of the project, and committee members said they didn’t want to tell Klutznick to whom he should rent space.
“How can we tell any developer who invested $15 million who you can rent to?” Newman said.
Although the city can’t force Klutznick to rent space to retail stores, it has offered him incentives to do so. Asst. City Manager Judy Aiello said the city has promised Klutznick that it would pick up more construction costs if more spots were awarded to retail stores.
The planned Sherman Plaza project is a $100-million commercial and residential development that will include 135,000 square feet of specialty retail space, the parking garage and a 200-unit retirement community. If completed, the project would span nearly the entire block of Sherman Avenue from Church to Davis streets. Klutznick announced his plan to build Sherman Plaza in June 1999.
Klutznik said construction on the project would begin early next year so as not to tear down the Sherman Parking Garage before the holiday shopping season.
Problems acquiring the property for the plaza project date back to last summer.
In July 2000, the Evanston City Council voted to give Klutznick a $2.5 million tax-increment subsidy to complete the plaza, specifically for the demolition of the Sherman Avenue garage.
The council voted in September to condemn Osco Drug. In November it voted to condemn the building containing Olive Mountain.
