Ald. Arthur Newman wants to exempt Evanston hotels from a proposed increase in rooming house fees, but city officials are still checking if the plan would be legal.
Newman (1st) proposed the exemption at the Evanston City Council’s Planning and Development Committee meeting Monday night. He said hotels should be exempted because they already pay a hotel tax.
Ald. Gene Feldman’s (9th) proposal would double fees paid by hotels, Northwestern’s dormitories, Greek houses and other rooming houses, generating a total of $188,000 in extra revenue. Exempting hotels would reduce the amount by about $42,000, according to City Finance Director Bill Stafford.
Evanston currently charges $166 per year for the first four people in a rooming house and $26 for each additional person.
The license fees, unlike a tax, are supposed to be based on the cost of services provided by the city, said James Wolinski, director of community development. So city officials are researching whether one class of rooming houses can be charged a different rate from another.
Wolinski said he didn’t think hotels could be exempted under the current ordinance.
“Hotels and rooming houses serve the population in the same manner,” he said. “They provide rooms without a kitchen.”
The city could legally raise license fees to five times the cost of services, based on previous court rulings, Wolinski said. But he said the new proposal would not raise fees that high.
City staff will present an analysis of the hotel exemption and its legality, as well as its financial impact, at the council’s Feb. 24 budget meeting. The council is expected to pass the budget the same night.
Ald. Steven Bernstein (4th), who serves on the Planning and Development Committee, said he agreed that a new tax on hotels would be unfair. However, he said he was waiting on the analysis from city staff.
An exemption might favor hotels, but their contribution to the city would balance that out, Bernstein said.
“I don’t think it’s unreasonable,” Bernstein said. “We should make concessions to businesses who are helping us carry the freight in other ways.”
Bernstein also said it was important for Evanston hotels to stay in competition with their neighbors.
“If somebody’s coming to Northwestern, they don’t have to say at the (Omni) Orrington,” Bernstein said. “They could stay at the Doubletree and shop at Old Orchard.”
Bruce Hutcheon, general manager of the Omni Orrington Hotel, 1710 Orrington Ave., said the council should consider how much more Evanston hotels pay in taxes than their North Shore competitors.
The cost of the increase, he said, “would be the equivalent of my competitor being able to provide uniforms for no cost or my competitor being able to provide paper and stationery at no charge.”
Hutcheon said the other major buildings that would be affected by the increase — Greek houses and dorms — don’t have to worry about expenses like property taxes or alcohol licenses.
“We don’t compete with fraternities and sororities,” Hutcheon said. “We’re just asking to stay competitive within the hotel community.”
Eugene Sunshine, NU’s vice president for business and finance, said Greek houses have increased costs to worry about, too. Sunshine, who has warned that Feldman’s proposal could threaten the existence of some of the houses, said fraternities and sororities are facing higher utility costs, insurance costs and expenses for physical improvements.
“You have to look at this in combination to other things going on,” Sunshine said. “I don’t think this thing in itself is going to be the straw that breaks the camel’s back.”
Sunshine said the costs of the proposal will be passed along to students, though — and students ought to be paying attention.
“These sort of things should not be implemented without the people most affected taking notice,” he said.
