An emerging idea to construct a new Evanston Civic Center funded by a special development district could face several roadblocks, one expert said.
But aldermen said the plan would be possible — and that it has happened in Evanston before.
“We’ve been told differently,” said Ald. Edmund Moran (6th).
Under the current proposal, which is still in its initial stages, the city would sell the current Civic Center site, 2100 Ridge Ave., to a residential developer and designate the area as a tax increment financing, or TIF, district. When a TIF district is established, the city does not receive tax revenues above the current level for 23 years. Any additional revenues above this limit then are redirected back into the district to accelerate development.
The new tax revenues collected from development on the Ridge site would be put toward paying for a new Civic Center building elsewhere in the city.
But such an arrangement could pose some legal problems for the city, said Patricia Nolan, director of planning for the Chicago-based Neighborhood Capital Budget Group, a neighborhood planning organization. She said Evanston legally cannot take revenue from a possible Ridge site TIF district and use it to fund building a new Civic Center outside the Ridge TIF zone.
“The law reads that the money that the TIF generates needs to be put back into the district, unless you have a contiguous TIF,” she said. “They can’t just take increments from the TIF and put it into a piece of property somewhere else.”
One way the city could navigate around this obstacle is by creating a bigger TIF district that would encompass both the old and new sites or by creating two zones that border each other, Nolan said.
City Manager Roger Crum said officials are aware of the issues involved in creating a TIF district, but he said the city still is far from implementing the proposed district. The idea still needs to be approved by Evanston City Council and be studied extensively by city staff.
“A TIF is one possibility. We are aware of the rules and we haven’t formally tried to apply them yet,” Crum said. “You have to go through a complete analysis of the TIF, and we aren’t anywhere close to doing that.”
Ald. Gene Feldman (9th) said such an idea would be — and has been — feasible. When the city creates a TIF district, the city can use the money to relocate any buildings currently on the property — in this case, the old Civic Center building. A similar method was used to build the Levy Senior Center, 300 Dodge Ave., which was relocated from a downtown TIF, Feldman said.
“TIF money could be used for eligible TIF expenses, including relocation,” he said.
But before the city moves forward, the Ridge site would need to meet a list of requirements to become eligible for TIF status — one of which would be property value. The city would have to show that the Ridge site’s value is declining or is growing slower than the citywide average.
There are more than a dozen different requirements for an area to be eligible for TIF zoning, but city planners usually find ways around them, Nolan said.
“That’s what the law requires, but consultants and city planners are very adept at meeting those requirements creatively,” she said. “The requirements are there but they are easy to finagle.”
Nolan said no matter what happens, the most important thing for the city to do is to keep the public informed on how tax increment dollars are being spent.
“There has to be transparency about the public money being spent,” she said. “TIF isn’t necessarily a bad tool, but it has to be used in a way that the public is fully informed with what the government is doing with their tax dollars.”
It is not uncommon for municipalities to use TIF funds to finance the construction of public buildings, said Jason Hardy, a research associate for the Center for Economic Policy Analysis in Chicago.
“It’s possible for them to use TIF (money) to build a public facility,” he said. “In Chicago, they build police stations and libraries and things all the time.”
But Hardy said one problem with constructing public buildings with TIF money is that it doesn’t increase property values as much as a private development would. By moving the Civic Center, he said, the city is relocating low property values from one area to another.
“You can use TIFs to build public buildings, but it’s a problem,” he said. “It’s legal as the law defines it, but it doesn’t do what a TIF is supposed to, which is raise property taxes to create money for development.”