'Not The First Time That City Actions Have Been Misleading': New TIF District Irks D-65

EVANSTON, IL — After a divided City Council approved a package of legislation establishing a new tax increment financing district in Evanston's 5th Ward — but refused to sign on to a intergovernmental agreement with Evanston/Skokie School District 65 about how the tax dollars would be used — school board members issued a joint statement declaring that city officials are threatening the district's equity efforts and financial future.

In 5-4 votes, councilmembers voted to create the Five-Fifths TIF District as Evanston's ninth such district. There are four others that are currently active — Howard and Ridge, West Evanston, Dempster Dodge and Chicago Main.

Located in a historically Black area of the city, the new district's name is a reference to the constitution's three-fifths compromise, which counted enslaved people as 60 percent of those who were free when apportioning representatives.

Tax increment financing is an economic development tool that takes property tax revenue generated from assessment increases and, instead of divvying them up among the various taxing bodies, places it in a separate fund for use in certain redevelopment projects.

More than a dozen taxing districts appear on the property tax bills of Evanston residents, but local public school districts are allocated about two thirds of what they pay.

At its Oct. 25 meeting, the City Council also voted 6-3 to approve a resolution that makes a series of commitments about the use of the money and operation of the TIF district. Alds. Clare Kelly, 1st Ward, Tom Suffredin, 6th Ward, and Cicely Fleming, 9th Ward, voted against it.

According to the resolution, city officials are committed to supporting the use of TIF funds for residential repairs and improvements for existing housing, affordable housing measures to help retain residents and support smaller landlords, workforce development and job training programs, infrastructure funding, public spaces and business district development.

"The City commits to not supporting the use of TIF funds for: eminent domain, neighborhood clearance, funding for a new Civic Center, or funding for luxury housing/microunits," the resolution said.

While the resolution can be undone by alderpeople in the future via a single majority vote, the intergovernmental agreement, or IGA, that the city and school district negotiated would have been legally enforceable in court for the life of the TIF district.

"The original intent, at least, in going to the table to negotiate [with District 65], was that we would not need [the resolution]," City Attorney Nick Cummings said ahead of the vote. "[The resolution] was there in lieu of [the IGA] and vice versa."

Under the terms of the agreement, the school district would have refrained from contesting the establishment of the TIF district and would have made "good faith efforts" to pursue the establishment of a Fifth Ward school without a referendum and implement goals similar to the city's regarding contracting with businesses based in Evanston or owned by women or minorities.

Ald. Peter Braithwaite, 2nd Ward, said the City Council does not generally agree to such binding agreements when it comes to long-term budget planning.

"Having voted on a number of these, this is the first time that I've seen where our city and the District 65 come up with a document," Braithwaite said. "Keeping in mind that [neither] District 65 nor 202 votes on any of these budget items, as this is an economic development tool."

Braithwaite first cast the deciding vote in favor of the IGA before announcing later in the meeting that he had made a mistake and wanted to switch his vote. He was joined in voting down the IGA by Fleming, Suffredin and 3rd Ward Ald. Melissa Wynne and 7th Ward Ald. Eleanor Revelle.

On the vote to establish the TIF district, 4th Ward Ald. Jonathan Nieuwsma, 5th Ward Ald. Bobby Burns and Braithwaite, Wynne and Revelle all voted in favor. Kelly, Suffredin, Reid and Fleming voted against.

---

In their joint statement Tuesday, District 65 school board members said they were surprised by the City Council's rejection of the IGA after months of negotiations.

"This is extremely disappointing and, unfortunately, not the first time that City actions have been misleading," the board members said, citing a lack of adequate response to racist threats administrators and board members have received.

"This pattern erodes trust and negatively impacts our entire city and most often economically marginalized communities and communities of color," the statement continued. "The TIF agreement would have held both parties accountable to one another regarding affordable housing, combating gentrification, and providing other protections the City claims to support in the name of equity."

The board members said that it was "absolutely unacceptable" that the TIF district would redirect all property taxes generated by Trulee Evanston, the recently completed and yet-to-be-assessed luxury senior living development at 1815 Ridge Ave., into the TIF fund.

Related: Proposed Five Fifths TIF District In 5th Ward Gets Public Hearing

According to the school district's estimates, District 65 stands to lose out on about $900,000 annually.

"The City has in the past stated that it would consider a fair tax allocation of tax dollars including at the Trulee site and if the Civic Center is developed, which is also in the TIF. That commitment was included in the IGA, which, again, the City rejected," the school board members said.

The board encouraged residents to contact their representatives on the City Council to continue to lobby them to support an IGA.

"It is our belief that the City’s actions continue to threaten efforts to create a stronger Evanston and more equitably serve residents who have been disproportionately harmed by racist policies and practices," it continued. "Further, their recent actions now have the potential to negatively impact the financial well-being of our schools and subsequently our students and families (also their constituents)."