In 2022, Soul & Smoke co-owner Heather Bublick received $650,000 from the Five-Fifths Tax Increment Financing district to renovate her barbecue restaurant.
While Bublick recognizes the scale of this investment, she said it has allowed the restaurant to invest back into the community.
“Because of the TIF, we were able to finish this project and make and build a restaurant here,” Bublick said. “So while $650,000 is a huge amount of money, it allowed a much bigger investment to be in the neighborhood.”
Bublick is now a member of the Five-Fifths TIF Advisory Committee, which has existed for just under two years and helped direct funds to other projects in the community.
In recent months, Evanston officials have debated the future of the city’s TIF districts, a public financing method that captures the growth in property tax revenue within a designated district. As new developments raise property values, the increase in property taxes above a baseline is redirected back into the district as a funding mechanism for “infrastructure improvements, workforce development and property revitalization,” according to the city’s website.
Some have called for the early closure of certain TIF districts to direct new property tax revenue to the city budget as well as the school districts.
In January, Alds. Parielle Davis (7th) and Matt Rodgers (8th) submitted referrals to vote on whether to end each of the districts early and to create a policy on extending or terminating a district.
The Five-Fifths TIF is the newest of the city’s TIF districts, created in 2021 to support development in the 5th Ward. The Finance and Budget Committee recommended in April that City Council maintain the TIF because it was created so recently.
Paul Zalmezak, Evanston’s economic development manager, said the investment in Soul & Smoke was one of the largest investments involving TIF money in city history.
Kellogg Prof. Therese McGuire, a member of the Finance and Budget Committee, said the TIF district is unique because it is the only one with a revenue-sharing agreement with Evanston/Skokie School District 65 and Evanston Township High School District 202 — the result of a 2022 intergovernmental agreement with the school districts.
McGuire said this means the revenue being generated in the Five-Fifths TIF is shared with school districts “from the get-go.”
According to city documents, the Five-Fifths TIF is projected to collect $1,488,900 in revenue and spend $1,825,148 in fiscal year 2026. Around $1.5 million of the revenue will come from property taxes, of which $700,000 will go toward the school districts’ revenue-sharing agreement and $210,000 is budgeted for track lighting for the Foster School, according to a city memo.
For fiscal year 2024, the TIF district reported an annual revenue of $1,420,595 and a cumulative lifetime revenue of $2,340,077.
Zalmezak described the revenue-sharing agreement between the TIF district and the school districts as “a political decision” and a “compromise” necessary for the community to support the creation of another Evanston TIF district.
“The school system recognized that the tax revenue impacts to them was going to be too great with the creation of the TIF unless we shared some of the funds with them,” Zalmezak said.
It seemed like community members only supported the TIF once they realized that the Trulee property, a senior living community, would be included in the district, Zalmezak said. He added that although the property hadn’t yet been developed at the time of the TIF’s creation, the city believed it would generate significant tax revenue.
While McGuire acknowledged the benefits of the TIF, she said she felt that there is an inherent financial risk in investing in private businesses.
“This is not personal to Soul & Smoke at all, but when you use it to help a private business, if they go under, your money goes under with them, right?” McGuire said.
However, she added that elected officials sometimes believe that a private business is critical enough to the community to justify subsidizing them with public funds.
Ald. Bobby Burns (5th) said he hopes TIFs will subsidize affordable housing, particularly larger units, for residents within the TIF district.
“This is important because this TIF is mostly within the District 65 Foster School boundary,” Burns said. “We want to make sure that families can afford to live within that school boundary.”
Although the Five-Fifths TIF has not been used for infrastructure improvements yet, Zalmezak said it is likely such projects will occur in the future. The Five-Fifths TIF Advisory Committee has recently discussed programs to support small businesses and home rehabilitation.
Additionally, it is supporting the redevelopment of a property at Emerson and Jackson and has funded a $82,000 hood replacement at Free Flow Kitchen. Bublick pointed out that the TIF is just now starting to generate funds, so there “hasn’t really been a balance to invest.”
“I’m really excited about the housing project on Emerson (Street) and Jackson (Avenue) and what that’s going to be,” Bublick said. “These things wouldn’t be able to be happening, and we would still have those vacant homes that were a huge eyesore that the community was complaining about.”
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