Though the Evanston Public Library’s proposal last week to sell the North Branch Library and then lease it back is unusual, the plan could provide long-term benefits for the city.
The money from the sale of the North Branch, 2026 Central St., would go to expand the children’s area and create a young adult books area in the Main Library if Evanston City Council approves the proposal. Library staff have been researching the plan’s feasibility since the library’s board of trustees expressed interest at its meeting last Wednesday. Library director Neal Ney discussed the plan with City Council at its capital improvements budget meeting Saturday.
The library is divided into three locations — the Main Library, North Branch and South Branch. The library currently leases the space for the South Branch, 949 Chicago Ave.
Library staff drew up the plan because of concerns that the city’s capital improvement plan for next fiscal year, which provides $200,000 for the Main Library expansion, would lose funding because of pending lawsuits, Ney said last week.
Ald. Arthur Newman (1st) said the library should look for alternative sources of funding, such as funds from a painting it sold for $900,000 in 1999. He said the city is still paying out the bonds from the Main Library’s construction in 1994.
“Some of that money needs to go into the project,” Newman said. “My plan is not to fund that $200,000 this year and that we ask the library board to pony up some of that money.”
Consultant Steve Larson, who has assisted other area libraries with their budgets, said the proposed arrangement is more commonly used in private enterprises.
But the City of Chicago has used this method to finance projects in the past, said Kellogg School of Management real estate management professor Thomas Lys.
Selling city property to private developers puts previously tax-exempt property back on the tax rolls. The city, over time, would benefit from appreciation of value on that property, Lys said.
“Cities have been doing this all along and the reason is because their budgets are on the squeeze and they don’t have any other funds,” Lys said. “If tax revenue was high, then the cities would not need to do things like that.”
Ney said the plan to sell and lease back the building is cost-effective. The city would not incur debt from the sale of bonds, which is the usual method to finance construction.
The proposal would keep the North Branch open, with the city paying rent on it.
The new property owner will likely demand that the total rent payments match the cost of the building, Larson said.
“The question is: Can you pay the rent?” Larson said. “They must have a source of payment.”
After the meeting Saturday, Ald. Elizabeth Tisdahl (7th), whose ward includes the North Branch, expressed concern over the proposal.
“There have always been plans to close the North Branch,” Tisdahl said. “I will have to engage in intense discussions with the library board as to what their long-term commitment is to the North Branch.”
Reach Greg Hafkin at [email protected].
