City Council Endorses County Tax Break For Bakery's Expansion

EVANSTON, IL — The City Council endorsed a property tax break Monday to encourage a local bakery to remain in Evanston and expand by buying and remodeling a vacant building. Aldermen voted 7-1 in favor of a resolution supporting of a Cook County 6b tax incentive for Hewn Bakery's purchase 1731-1733 Central Street.

Hewn co-owner Julie Matthei told aldermen the bakery had been looking at potential locations for expansion in Evanston for more than two years but it had been tough to find 6,000 square feet of space for a reasonable price.

"This is a huge risk that we're taking, as well, we're putting a ton of money into this building and into our business, which is what we want to do, obviously, is to grow it," Matthei said. "But we do have timeframes. We've got loans we've got to deal with and closing and that sort of thing."

Without the incentive, which reduces the assessed value of the property for 12 years, the bakery would not be able to purchase the building, which has been vacant since June 2018. It is owned by the founders of defunct subprime auto lender Honor Finance, Robert DiMeo and James Collins, who is currently facing a $25 million fraud lawsuit.

Ald. Don Wilson, whose 4th Ward includes Hewn's Dempster Street location, explained that the City Council's reduced calendar for August would result in a delay of close to two months. He said the projections made sense to him and the tax break is more of a future tax credit than a handout.

"This economic activity certainly could help this stretch of Central Street. And I think it would be of a great benefit in that location," Wilson said. "If the property sits empty we're not going to get the realization of the economic tax benefits, we're going to be looking at potentially another long term empty parcel and I don't want to be in that situation."

Chris Zarek, attorney for Hewn, told aldermen receiving the county tax incentive was a condition of the deal closing.

"If this doesn't pass tonight, it's going to be a very hard stretch, a very hard sell to get Hewn Bakery in there," Zarek said.

Judy Fiske, 1st Ward, was the lone vote against the measure. She suggested holding off on the vote until a future meeting.

"I feel really uncomfortable about this. I mean, it's a wonderful business, you have lots of fans. Everything is great we want to support all of our small businesses but this really should have gone to [the] Economic Development [Committee,]" Fiske said. "I feel very uncomfortable about voting on this tonight and if I were at Economic Development I would certainly want to find out if you've tried to negotiate with the seller of the property some of the repairs that need to be made."

Community Development Director Johanna Leonard said such matters normally go through the economic development committee, but due to scheduling concerns it was presented directly to the full City Council. The incentive requires final approval from the Cook County Assessor's Office.

Ald. Peter Braithwaite, 2nd Ward, who was chairing the meeting in lieu of the vacationing Mayor Steve Hagerty, confirmed with Leonard that the bakery had been looking for an area to expand in Evanston for the past several years.

"There's been a lot of effort on their part to try to stay in Evanston," Braithwaite said. "So it's come up quick, but I think it's just the circumstance of the property."

Tom Suffredin, 6th Ward, pointed out the City Council had six days notice for a 12-year incentive and suggested it was premature to vote on the matter.

"There's no time to discuss whether other residents want to be a part of this. I know there's a lot of enthusiastic people about Hewn, but there are a lot of people in Evanston who are burdened by their property values as well," Suffredin said.

Suffredin and 9th Ward Ald. Cicely Fleming each referenced a letter from Hewn co-owner Ellen King asking the City Council to opt out of Cook County's minimum wage ordinance ahead of an "emergency" meeting, which was later determined to be an Open Meetings Act violation. Abiding by the Cook County Living Wage Ordinance is a condition of receiving the 6b incentive from the county.

Ald. Melissa Wynne, 3rd Ward, said Hewn was the type of business that can thrive in a difficult retail environment because it offers a product that people cannot buy on the internet and ties in to many categories of interest to consumers. She said she would support any other qualifying local business for the Cook County incentive.

"6b has really helped Evanston in really critical times to keep important businesses here who absolutely would have gone if that had not been available. I look at this business and think, 'I'm sorry to lose it from where you're located now,' but you're going to thrive up on Central Street," Wynne said.

"I think this is a classic example — just like Ward Manufacturing was, just like AutoBarn was — of how 6b can be used, to revitalize an older building that needs lots and lots of repair and then grow it into an Evanston-based business."

Ald. Ann Rainey, 8th Ward, said the 6b tax incentive program is intended to reduce the number of vacant industrial buildings rather than directly support small businesses. Getting rid of vacancies, though, helps all nearby businesses and increases property values generally, she said.

"Small businesses need to look at empty buildings and be grateful that there's a program like that for a user like Hewn," Rainey said, noting that several formerly vacant buildings were only occupied because of the incentive. "You can't use a 6b unless you're going to take up a long-time vacant building. Really, that's how 6b best works."

Leonard pointed out having vacant buildings around town pulls away city resources such as property inspectors and graffiti technicians.

"It takes away city attention when we have to go deal with these properties because they're large, they have problems," Leonard said. "When you have a vacant building it pulls down everything else."

The resolution was tabled while city staff and Hewn representatives drew up an amendment to the resolution to signal the City Council's support for the bakery to hire locally. Leonard read the amendment into the record before the vote:

Hewn will make best efforts to continue to hire and retain Evanston residents for new and existing positions that become vacant. Best efforts will include, but are not limited to, the following: the business will work with city and county workforce development to identify people capable of filling vacant jobs and the business will work with local job training professionals (e.g. Have Dreams, JJ's List and others) to identify, hire and train individuals to pursue bakery jobs

Matthei, Hewn's director of business operations, said the company has always preferred to hire from within Evanston, whenever possible, and had hired an employee it found through an Evanston-based job training program in the past. She suggested the bakery could offer more chances for training and career advancement if it was able to expand in the location proposed.

"Our skill set for bakers is very, very challenging to find people who can do that job," Matthei said.

"I think when we hopefully can move into a facility like this, the opportunities are really endless in terms of what we could do with respect to job training," she added.

Earlier: Property Tax Break For Bakery's Expansion Recommended By Staff