Evanston council to vote on Trader Joe's deal

A site plan for the new Trader Joe's.

Evanston Aldermen tonight are scheduled to vote at a special meeting on plans for the city to spend $2.05 million to buy land that would become a parking lot for a planned Trader Joe's market on Chicago Avenue.

Under the plan the city would lease the land to Terraco Inc., the developer of the Trader Joe's building.

The city-owned parcels would provide about two-thirds of the 78 parking spaces needed for the new 13,000 square foot store.

The store itself would be built on the site of a former Blockbuster Video store at 1211 Chicago Ave. that Terraco recently purchased.

City officials say the new store is expected to generate between $487,000 and $669,000 a year in sales, liquor and property tax revenue for the city, and that the city should therefore recoup the money spent to buy the property within three to four-and-a-half years.

Trader Joe's will have a 35-year lease with the developer of the new store and the developer will have a 70-year lease on the parking lot with the city.

A 2004 aerial view of the proposed Trader Joe's site.

Top: A site plan for the new Trader Joe's.. Above: A 2004 aerial view of the property from the city website. The gas station at 1201 Chicago Ave. and the apartment building at 1231-35 Chicago are not included in the redevelopment plan.

City officials plan to take money to buy the land from the city's parking fund, which has cash available to make the purchase.

While the deal as described appears advantageous for the city as a whole, its parking fund will be buying an asset which will generate little revenue for the fund.

The only income likely to go to the parking fund from the deal is from overnight permit parking on 24 of the lot's spaces. Assuming those could be leased at $50 a month, that would yield a return to the parking fund of less than $15,000 a year -- less than 1 percent on the $2 million investment.

1223-25 Chicago Ave.

One parcel the city plans to acquire, at 1223-1225 Chicago Ave., is currently occupied by a half-vacant one-story retail building. The other, at 1229 Chicago Ave., has a Victorian-era home. The house sits on land owned by Northwesten University, while the house itself, the city says, is owned by a third party.

1229 Chicago Ave.

The proposal includes a requirement that Terraco attempt to relocate the house to another site, if the move is economically viable.

Under the plan, Terraco would pay demolition and relocation costs and pay to pave and maintain the lots for parking use.

Terraco has already purchased the Blockbuster site at 1211 Chicago Ave. for $2.3 million and plans to demolish the existing store on the north end of the parcel and replace it with a new building for Trader Joe's on the south side of the lot.

Steve Griffin, the city's Community and Economic Development Director, in a memo to aldermen, cited several examples from around the country in which municipalities provided financial assistance to developers of projects that included a Trader Joe's store.

Assuming aldermen approve the land deals, Terraco's next step would be to seek approval from the city for a planned development for the new site.

That would require review by the Plan Commission, the Planning and Development Committee and the full City Council.

Plans to open a Trader Joe's on the site were first announced in February. If the approval process runs smoothly, the store could open sometime next year.

Related stories

Manager defends Trader Joe's aid plan

City to buy parking lot for Trader Joe's

NU playing role in Trader Joe's deal

New Trader Joe's store plan draws praise

Trader Joe's to open store in Evanston

Related document

Special City Council meeting information packet

Comments

Trader Joe's Shell Game

Wally is using Water funds to buy the parking lot,  Last year Wally transfered 4 million dollars out of the Sewer fund into the parking fund.  They claim the parking fund is flush with money for the Trader Joe's deal.
They are calling this transfer a loan. 
Who is paying for the parking lot, water customers thats Who! 
By the way if the Parking fund is so flush with money way did they need to transfer 4 million from the sewer fund? They say the fund has 16 million dollars in it, if this is so, why the 4 million transfer?
At the last ecomonic development meeting a staff money stated the water fund had alot of money.  Wonder why they keep on increasing your water bills?  They pretend they need the money for operations and capital of the water utility, total lie. 3 million is transfer each year to operate the city.  on top of the recent 4 million theft. 
Now it looks like they want more for other uses, 
With the city 888 million in debt and last years effective 8% tax increase, I wonder what tale they will spin at this years budget hearings?
 
 

Looking at the photo of 1229

Looking at the photo of 1229 Chicago, I fail to see any architectural details that would merit attempting to move the house elsewhere. Are there any? The fact that it is a Victorian is insufficient as a reason. Ugly houses are built in every era. Perhaps some wood and interior arhictectural details can be salvaged, but nothing in the façade suggests value.

You never know what might lie behind the facade

We do not know what lies under the asbestos or asphalt siding or what details got ripped or might lie inside the house, but considering that NU has owned it for many years, what is obvious is the lack of upkeep and overall maintenace. since this was a rental all of these years, did the City inspect it as they are to do for rentals? Did NU even file the propoer paperwork required of landlords for a rental? Too late now, of course.
 

Speaking of facades

Enquiring minds want to know what is going on at the Armenian church.  Are they going to tear down the whole face from the ground up on Clark?  Same boring yellow bricks?  
It really is too bad that they have such a boring church.  I would like to see them tear it down and replace it with something based on traditional Armenian church architecture.

Water Refund

If the water fund is so flush with money, they should be reducing the water rates not transfering it to other funds or funding a private development like the parking-lot for Trader Joe's.  This picking [supposed] "winners " and leaving the residents and other business to fend for themselves is a big reason we are in so much trouble---along of course with the pension/salary/benefits to the unions for votes.
What are the terms of the proposed lease ?  Will the terms more than compensate the city---i.e. make money for the city ?
What if Trader Joe's fails [or even just not profitable enough to pay for a parking lot] and the land becomes vacant---like so many stores and land in the city has ?  Yes they could turn it into a public parking lot but with the hearings, zoning protests, "waiting to see if some better use" appears that could take years.

Water refund.... sure... and pigs fly too...

Last I heard, the City was on a rate hike spree because they taught us to conserve water just a little too well.  "All of our conservation efforts have left them with too little funding to pay off the bonds."  What they really meant to say was that they needed to hike rates so they could rob the piggy bank for pet projects.
If we have additional revenue to transfer out of the water fund, it should be put toward the pension issue so that we can pay down what we owe faster.  We all KNOW that the city isn't going to lower our rates now that they have us paying in, so let's use it to pay down something that is eating us alive.   Does anyone know when the 150% tax on the total water/sewer bill is supposed to start going down?  My guess is never.  That plan seems to have been flushed down the drain.
I am against buying property for any business.  Sink or swim by offering Evanstonians value - do that and we'll spend our hard-earned cash at your place of business!  Stop asking for my tax dollars to support your business.

Trader Joe's Chicken and Waffles

Ponzi wrote: "At the last ecomonic development meeting a staff money stated the water fund had alot of money."
Ponz....no wonder you're a cartoonist. Although I can barely understand the ones you do for Evanston Now, at least they're a tad more decipherable than your writing.

What are the odds the house will be relocated?

"The proposal includes a requirement that Terraco attempt to relocate the house to another site, if the move is economically viable."
Which portion of this senetence is believable,  the "attempt" part  or the "economically viable" part?
Conclusion: Kiss the house good-bye!  

Blue House

Has anyone thought of the 99 year land lease for the blue house and the parcel next door.  It is still in effect?
How can the City purchase the property and expect to use the land.  Have the leaseholdeers been contacted? 

House lease

Yes ... as part of the $650K purchase price, the developer is to buy out the leasehold interest and deliver clear title to the property to the city. You can find details of that here.
-- Bill

They have to be kidding !

$650,000 for that house and land ?  Comments have been that the house is not in that good of condition anyway.  But to assume almost any house on land that size and in that location [surrounded by commerical property] is worth $650,000 is inane.  Once again the city fathers seem to be willing to pay anything any body wants for anything they think will be a 'winner.'
No wonder the city is in such bad financial state !
I would hope some sane minds kill this throwing money away but it does not sound like they will given past actions.
Lets see how this went.  Trader Joes picks a plot of land that anyone could see would not support much of a store and parking lot and then tells the city they need more land for parking or someone on the Council says "hey don't you need more land for parking---guess what will pay for that."

Different Subject, Same Strategy

Big business gets the big bucks - regardless of the true value to the Citizen's of Evanston. I like Trader Joes, but in the end it will bring minimal NEW revenue to Evanston. Instead it will shift dollars from Whole Foods, from Jewel - the City will get the same aggregate in sales tax. As for new jobs - they will be low paid, low skilled and limited. This is not a business that can grow - it will start and stay at one level (unless it declines and fails)
For true economic development - take the $2.3 million dollars and start a city based Venture Capital company. Draw small, start up growth based companies to Evanston from Chicago with capital. Stipulate they must stay here as a condition of being funded.
Encourage small businesses to move to Evanston by offering a relocation fee to pay security deposits on new rentals (at least that will have a possible return). Hell - offer a loan fund to save existing small business that may want to move or close existing Evanston shops.
For $2.3mm a few hundred (yes hundred) small businesses can be brought to Evanston. Statistics and extensive research already prove that small business will create more jobs, stay more loyal to a community when hard times hit, create better paying jobs and in general grow a community.
Trader Joes, like any non local corporation, is run by the bottom line. They stay only if it is fiscally advantageous and leave without thought of consequence of the community. Another Borders anyone?
Small business cannot lobby like a Trader Joes - but it is time to stop doing the same thing over and over and expect different results. Do something radically different. Think independently.

How about letting the property tax payers keep the $ instead

a city based venture capital company? really?
A 2010 report by Harvard titled "Risk and Reward in Venture Capital"   had this to say:
 "Venture Capital investments are characterized by high failure rate (0ver 50%) and a small number of given successes (greater than 10% returns). As an asset, class, venture capital has produced high cyclical returns that mirror trends in capital markets and in markets for new technology. There is a large disparity in median and upper quantize performance. A small number of funds do well on a constant basis. Overall returns on venture capital have been low for the decade ending in 2009."
Do you really think that our sitting aldermen, mayor, and city manager are knowledgeable enough to choose the right ventures to back, considering that experienced investors have a less than 50% chance of success?!
Paraphrasing some of the favorite words of Jane Grover, "Perhaps we should do a study on this".

Why there ?

With all the larger areas of land in Evanston, why did Trader Joes pick that one ?
Unless I'm missing something, is there not a lot of vacant land in the old Research Park from Clark to Emerson ?
What about their putting the store and parking lot in the old Kendall property---plenty of land ?  Oh thats right too many wealthy people with influcence would scream, even though that section of town could well use a large food store---much more than where Trader Joes wants to  [or told they could and only there] build.
The people around Dodge and Dempster and around Oakton and Dodge [if I remember correctly] said they needed a food store there. What about the NE part of Evanston, e.g. Kendall property.

Council Just Voted

All motions just passed the Council (7:45 PM 5/7/12), mostly 8:1 or 7:2 or 6:2.  Alderman Wilson was consistently against, Alderman Rainey was against a couple of the building purchases, Alderman Burrus recused herself on the Northwestern-owned parcel (she's an employee, I believe).  Trader Joe's is coming for sure.

If only TJ's could have gone to Oakton and Asbury, sigh

The former Osco building at Oakton and Asbury would not need to be torn down, sure looks the perfect size for TJ's and has a parking lot ready to go. But instead the city is going to go through financial contortions to demolish, pave, etc. etc. for the Chicago Avenue site. I assume Oakton and Asbury was rejected for some reason by TJ, and why not if the extra money to be spent for the Chicago Ave. site comes from the public?
I like Che-Li's final paragraph..."I am against buying property for any business.  Sink or swim by offering Evanstonians value - do that and we'll spend our hard-earned cash at your place of business!  Stop asking for my tax dollars to support your business."
There will, of course, be a 10% discount on everything at the new TJ's for all Evanston taxpayers, right?

TJ

Clif,
TJ has specific location criteria. Aside from demographics, they want to be near other food markets. TJ stocks only about 4,000 items, compared with 30,000 to 40,000 that aregular supermarket stocks. Jewel fits that. That means a shopper does not have to make a specific trip to TJ, but can combine that with a trip to the regular store. An added benefit of this location is that Whole Foods is also nearby, which is a desireable demographic draw.
It is only money, which is important to the Aldi management, obviously not an issue with our local government.