Clarification appended
The developers of a proposed downtown Evanston skyscraper have asked the city for $3 million in tax increment financing dollars to help pay for the purchase and renovation of the two-story Hahn Building, a designated historic landmark directly south of the proposed building’s site.
But a consultant for the city said during Wednesday night’s Economic Development Committee meeting that the developers should get no more than $2 million in city funds.
The controversial Fountain Square project, which would replace an existing building at 708 Church St., has received national attention. The companies, Focus Development and Klutznick-Fisher Development, and city officials have argued a tower would offer significant benefits for downtown. The tower’s condominiums and commercial development could generate tax revenue and pay for other projects.
Getting TIF dollars from the city to purchase the Hahn Building would provide affordable office space and promote a unified vision along the central downtown block, argued Focus Development president Tim Anderson.
“The 708 Church St. plan is not contingent on the Hahn building request, but it’s important for creating retail in the building and an opportunity to relocate individual tenants from 708 into that building,” Anderson said. “If we didn’t get TIF support, we could not go forward with the acquisition of the Hahn building.”
The developers would spend $11.2 million to purchase the building at above market value and renovate it. The city would pick up $3 million of that cost using funding from the downtown tax increment financing district. The amount of property tax revenues going to schools and government bodies from the TIF district is frozen during the life of a TIF; any increases in tax revenue can be used by the city for public works or other development projects.
The committee did not vote on using TIF funds, but heard from consultant Marty Stern of U.S. Equities Realty. Stern said the developers “did a credible job” in assessing the amount of TIF funds they needed, but estimated the city’s expense could be reduced to $2 million.
“The Hahn building itself will need an economic subsidy,” Stern said. “In and of itself, it’s not an economically viable project. But there is a little bit of extra money (from the tower), and I’m suggesting this could be used to reduce the TIF request.”
Committee members and activists opposed to the tower questioned the use of city dollars for the project.
“It seems a little crazy for developers to come saying, ‘We’re going to overpay for the property, and then we want you to subsidize it,'” said Economic Development Committee member Karl Gromelski. “We don’t have that kind of money lying around.”
A special meeting of the Planning and Development Committee to discuss the project will take place May 7 at 6:30 p.m.
Clarification: Due to an editing error, a previous version of this story stated developers requested $3 million in tax dollars for the proposed purchase and renovation of the Hahn Building. The developers have requested TIF funds, which are generated through new development.
