Staff Recommends $2M Subsidy, 38-Story Tower

Submitted by jeffpsmith on Wed, 04/30/2008 - 17:18

Outgoing Assistant City Manager Judith Aiello and Assistant Director for Community Development Dennis Marino, in a 2-page memo dated April 25, 2008, recommend approval of $2 million in subsidy, from Tax Increment Financing ("TIF") funds from the downtown TIF district, to be given to the Focus Development (Klutznick-Anderson) team for the acquisition and rehabilitation of the Hahn Building as part of the proposal for redevelopment of the 708 Church Street site. The developers had sought $3 million but the consultants and staff conclude that the valuation of the Hahn Building is too high.

The staff report also concludes, based on review of the U.S. Equities consultants' report (not available to the public for review or questioning), that 38 stories are necessary for the "financial feasibility" of the 708 Church Street project.

Review of the report and consideration of the $2M TIF fund request are among the items to be discussed at tonight's Economic Development Committee meeting at 7:30 in Council chambers.

Forums:

psanche

Thu, 05/01/2008 - 17:16

Well, last night was another one of those meetings where you scratch your head and say to yourself "Am I having a nightmare?" We waited weeks to get the "facts" but what Stern provided was minimal. The P&D committee should have done us all a favor and voted down this albatross at their last meeting.

Some points:

1. If the cost of the Hahn Bldg goes down (because the developers tell the owner "the City would only cough up $2 million") will the city get a rebate? I suspect that they will try and pay a lower price and will keep the difference which means they will end up with more than $2 million, if not $3, which is what they wanted in the first place.

2. Why did Stern say that this was a viable project that was the right height and density? He suggests that only a project with 218 condos will be economically viable. This is a ludicrous statement.

3. To be fair, at least Stern pointed out that some of the developer's "public benefits" were a sham.

4. Stern used the term economically viable but it seemed that he was simply referring to whether or not it was a profitable project. Well, as Alderman Wynn pointed out, of course they are going to propose a project that will yield profits! What about economic viability for the city? Stern said very little about this; and this is the most important point as far as the city is concerned.

5. Why is the City going to pay a developer to buy and restore a building that will mostly enhance the value of their profit-making skyscraper project; and will also make it easier to carry out the construction of their proposed skyscraper? (Can you imagine how much more difficult and costly it would be to build this albatross if they don't control the Hahn Building location?) They probably want to control the Hahn Building to enhance the value (profits) of the skyscraper and to have an easier, less costly building process (which will also enhance their profits).

The bottom line: the city wasted more money on a "consultant" to figure out whether or not to make a huge mistake.

Note: Also posted on Evanstonnow.com and Evanstoncrd.org