City staff told aldermen Monday that Northwestern’s purchase of a building near campus does not require city approval and is not subject to property taxes.

The discussion over the building at 1840 Oak Ave. started after Ald. Judy Fiske (1st) asked staff in February to look at past agreements between the city and the University to determine whether the building must remain on the city’s tax roll and if city officials are required to approve the sale of the property.

In a Jan. 31 letter sent to Mayor Elizabeth Tisdahl and City Council members, Northwestern’s Executive Vice President Nim Chinniah said the University was in the process of acquiring the property at 1840 Oak Ave. The University has acquired other properties in the past two years, including 630 Clinton St. and 2522 Orrington Ave.

The property at 1840 Oak Ave. is located in a “Research Park,” established by the University and the city in the 1980s, which hosts firms and start-ups created by Northwestern faculty. The city created a for-profit corporation with the University to perform functions in the area in an effort to keep university-related businesses in Evanston.

Acquiring these properties helps the city as much as the University, Chinniah wrote in the letter.

“Research space provides the opportunity for companies founded by our faculty to remain in Evanston, and thus strengthen our retail and local businesses by contributing jobs and enlivening our city center,” Chinniah wrote.

According to council documents, the “Research Park” is part of a special zoning district bound to the south by Davis Street, to the north by Emerson Street, by CTA tracks to the west and by Chicago Avenue to the east.

Northwestern isn’t required by state law to pay taxes for its buildings, but Chinniah wrote that the University would make an annual voluntary payment of $350,000 to the city. According to council documents, this amount roughly corresponds with the yearly property taxes that Northwestern would otherwise pay for the three recently-acquired properties. The estimated 2016 tax amount for the three properties was $317,253, according to council documents.

Over the past several weeks, city staff conducted a review of recorded deals and ordinances from the 1980s to the early 2000s relating to the “Research Park.” In March 1988, the city and University agreed to a set of specific rules regarding future development in the area, according to council documents. The two parties agreed that no property in the “Research Park” could be sold or leased to a “tax-exempt entity” without approval from the city.

However, the city and University agreed in May 2000 to exempt 1840 Oak Ave. from this rule, according to council documents. Thus, city staff determined Northwestern’s recent purchase of 1840 Oak Ave. did not violate the terms of the 1988 agreement.

City attorney Grant Farrar said he met last week with Northwestern’s Office of General Counsel and discussed creating a set of updated documents on the rules and restrictions regarding property in the “Research Park.” Farrar said he told the University that the city would like the voluntary payments to continue in perpetuity, and Farrar added that the city and University continue to work on putting agreements over the payments into writing.

“Based on the productive and cordial dialogue that I had last week, that a lot of that is on the table,“ Farrar said at Monday’s council meeting. “This process will necessitate some continuing dialogue with the [City] Council.”

Aldermen also passed a resolution Monday affirming the city’s commitment to reimburse Evanston/Skokie School District 65 and Evanston Township High School/District 202 for funds equal to the University’s $350,000 payments to the city. The city would distribute each district a proportionate share according to tax rates, according to council documents. The resolution also asks city staff to create a document laying out the agreement regarding the payment plan with the districts.

“Having good records keeping like this is really essential,” Fiske said. “A good business relationship is part of being a good neighbor too.”

Correction: A previous version of this story misstated the bounds of the special zoning district for the “Research Park.” The zone is bounded by the CTA tracks to the west and Chicago Avenue to the east.

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