City Council will wait one more month to vote on the proposed Tax Increment Financing district until it can finalize an intergovernmental agreement with Evanston/Skokie School District 65.

The delay passed 5-4 after Ald. Clare Kelly (1st) expressed concern about diverting tax revenues from District 65 — who would not benefit financially from property tax raises for the duration of the TIF — without forming a partnership to address its needs. 

However, Ald. Bobby Burns (5th) said bringing in TIF dollars could support 5th Ward students indirectly by improving recreation centers and day-to-day living standards for families.

Here are some of the main highlights from Evanston’s ongoing TIF debate:

What is a TIF?

A TIF is a zoning tool meant to reinvest property taxes back into specific areas of cities by collecting all taxes above a baseline amount in an area for 23 years. One caveat: TIFs can be extended by 12 years by a state legislature vote. 

When a TIF is enacted, the existing property tax rate becomes the city’s collection ceiling. As taxes rise, any money over the base amount goes into the TIF’s fund for civic projects. This money is used to fund public works and community development projects. 

But they can be highly contentious, often raising questions of how closely a city’s uses of TIF funds align with residents’ expressed needs, as the funding is disbursed at the discretion of city staff. Throughout the 5th Ward TIF’s proposal process, some residents have repeatedly called for more transparency and specificity around the usage of TIF funding.

How are TIFs established?

Evanston has four active TIF districts, which are among over 1,200 across the state.

In order to qualify as a TIF district, an area needs to meet at least five out of 14 indicators of “blight” as defined by federal law. That includes overcrowding of structures and “deterioration” of buildings. Opponents have called blight a loaded term, saying it conveys a derogatory image.

The 5th Ward TIF area also meets special criteria as a conservation area, based on its concentration of old and vacant buildings. The city must also submit proof that the projects funded by the TIF cannot be achieved through other sources of funding. According to the city’s Economic Developer Paul Zalmezak, the lack of private developers interested in the 5th Ward has necessitated the use of TIF funds.

What is the 5/5 TIF?

The proposed district for Evanston’s fifth active TIF would be generally bound by the canal near Leonard Place to the north, Dewey Avenue to the west, Emerson Street to the south and Ridge Avenue to the east. The region primarily encompasses the historically Black 5th Ward and includes commercial corridors as well as residential neighborhoods. 

The district would also include the Lorraine H. Morton Civic Center, the proposed sale of which would generate high tax profit for the TIF. It would also encompass the Fleetwood-Jourdain Center and the Family Focus building — though residents near Ingraham Park successfully lobbied to have the park excluded from the TIF. 

Why do some city leaders support the TIF?

The TIF is expected to raise property values in the 5th Ward as development projects improve and update infrastructure and residences in the area, according to Mayor Daniel Biss. 

At Monday night’s meeting, former 5th Ward councilmember Robin Rue Simmons said the TIF has long been a goal of the ward’s leadership. She added that mobilizing TIF funds could create equitable living conditions in the ward.

Ald. Cicely Fleming (9th) said TIF money can also be useful in helping residents maintain access to necessary home repairs for factors like weather damage.

Why are some people opposed to the TIF?

Some residents are concerned that raising property taxes would quickly gentrify the area and not dramatically stabilize the 5th Ward housing market for several decades.

“This is not about yes TIF or no TIF,” said resident Karla Thomas. “It is about ensuring that we create mechanisms within the TIF that will reduce gentrification in the neighborhood.”

Residents also raised concerns about what they consider to be vague language in the allowed use of TIF funds. They expressed frustration that strong opposition to the TIF at 5th Ward meetings has not led to major changes in the council’s approach to the proposal.

“This TIF will not make Black folks whole, nor will it solve equity issues,” activist and former City Council candidate Darlene Cannon said at Monday’s meeting. “Only we can do that as a community.”

What can TIF dollars be used for?

TIF dollars can be used for new construction projects or renovating existing buildings. This includes the funds required to buy and clean up land, work with developers and contractors and support business owners during heavy construction. 

TIF funds cannot be used directly to hire new personnel, which complicates any proposals for building new community institutions. That includes the recent discussions around building a new school in the 5th Ward using any TIF funds, especially without express support of District 65.

What have TIF dollars been used for in the past in Evanston?

Previous TIF-funded projects in the city have included remodeling Fountain Square and redeveloping Evanston Plaza.

The city describes TIFs’ main goals as private sector growth, workforce development and commercial revitalization. Ald. Devon Reid (8th) said this makes the 5th Ward TIF unique, as it would be enacted in a mostly residential neighborhood, while previous TIF money was largely given to private developers. 

Evanston currently has four active TIF districts: Howard and Ridge, West Evanston, Dempster-Dodge and Chicago Main. Total TIF revenue across the four districts yielded over $4.3 million in 2019.

Annual city reports indicate that the Dempster Dodge and Chicago Main districts have never allocated TIF money towards reimbursing school or library systems, or for funding job training programs in their district. The Howard and Ridge and West Evanston districts have not done so in at least a decade. 

How will the 5th Ward TIF funds be spent?

Zalmezak wrote in a Monday memo that a priority for TIF funds would be subsidizing existing affordable housing, with money used for up to 50% of the cost of building or renting each home. Multifamily and historically low-income homes would be prioritized, and new auxiliary housing units would also be funded.

TIF funds would also be allocated for homeowners in the 5th Ward to upgrade their utilities and fix any exterior home damage, prioritizing elderly and low-income residents. Supporters say improving homes will benefit residents by encouraging homeownership retention. Opponents say higher property values and taxes throughout the ward will accelerate gentrification, pricing longtime and low-income residents out of the neighborhood.

The proposed fund will not be used to build a new Civic Center, support eminent domain or fund the construction of new luxury or high-rise housing. Earlier drafts of the TIF also proposed banning funds from being used to build a new 5th Ward school, though this is left open in the final version of the TIF plan.

Incoming Interim City Manager Kelley Gandurski will negotiate an intergovernmental agreement between Evanston and District 65 so TIF funding can best suit the interests of both parties. This addition comes after a recent letter from District 65 school board President Anya Tanyavutti, who requested the city either work more closely with the district or remove the school district’s support from the TIF proposal. 

Intergovernmental agreements are formal, but not legally binding, deals between two governing bodies over a communal issue. Burns said the district was given an opportunity to add some of its own terms to a draft of an intergovernmental agreement this week, but a final version could not be agreed upon by Monday’s council meeting.

“The (intergovernmental agreement) is essential to ensure that this TIF is equitable and protects the best interest of residents who we both represent,” Tanyavutti said.

Individual decisions on TIF funding use will be made by a committee of seven, which will always include the 5th Ward councilmember and three property owners from the ward. This committee was a recent addition to the original TIF plan. 

Council’s final vote on the TIF proposal will take place at its Oct. 25 meeting, giving the city and District 65 a deadline to finalize the intergovernmental agreement’s terms.

Email: [email protected]

Twitter:  @ilana_arougheti

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