Crowd backs Heartwood expansion request
Dozens of people showed up at Wednesday night's Evanston Economic Development Committee meeting to support a request for city financial help to expand the Heartwood Center.
Heartwood, at 1818 Dempster St., provides office space to 40 self-employed wholistic health practitioners.
Owner Nancy Floy, faced with the loss of revenue from the Evanston Rebuilding Warehouse, which leased half the 12,000 square foot building from her and is moving to new quarters, wants to expand the center into that space.
Floy told the committee the warehouse space is unheated, and she believes it would be difficult to find a new tenant for it without substantial renovation work.
Her proposed expansion would double the center's capacity, with most of the new practitioners to come from among people who are already on a wait list for space at the center.
Floy says if she can't expand and can't find a new tenant for the warehouse space, she would run out of money and have to close the center within about eight months.
A breakthrough occurred just hours before the meeting, when representatives of Fifth Third Bank, which had agreed to loan Floy $97,000 for the expansion, dropped a requirement that no other debt be involved in the project.
Top: Heartwood Center owner Nancy Floy. Above: Alderman Ann Rainey, 8th Ward.
That allowed Floy to switch her request for $100,000 in city aid from a grant to a loan -- which seemed more palatable to several committee members, including Alderman Ann Rainey, 8th Ward.
Paul Zalmezak, one of the city's economic development planners, said under the new proposal the city would loan the money at a 4.75 percent interest rate, with interest-only payments for the first year and the balance due in a balloon payment after five years.
The city's loan would be secured by a second mortgage on the property, subordinate to the loan from the bank.
Floy also plans to put $53,000 of her own funds into the expansion project.
Floy said Fifth Third has also agreed to refinance her existing mortgage loan on the building as part of the expansion plan at an interest rate two points lower than her current mortgage from First Bank and Trust.
A mix of practitioners at the center, neighbors and community activists from elsewhere in Evanston showed up to speak in favor of the project.
Dickelle Fonda, a Heartwood Center supporter.
Dickelle Fonda, who said she's lived in the neighborhood for 30 years, said of Heartwood, "there's never been a transformation like this in our community in all the time I've been here."
The center has renovated a vacant building that had been in foreclosure and brings at least 500 clients a week into the area who also shop there, said Alderman Peter Braithwaite, whose 2nd Ward includes the site.
Braithwaite said the vacancy creates an opportunity to expand the center "that provides a wonderful service to the community."
Alderman Coleen Burrus, 9th Ward, said that she believed the committee had a guideline that the city's financial involvedment in such a project should be limited to about 25 percent of the cost. "At 40 percent, this one seems a little high," Burrus said, "I'd like to see justification for that."
Alderman Judy Fiske, 1st Ward, asked whether moving new tenants into the center would create commercial vacancies elswhere in town. But Zalmezak said all but one or two of the prospects would be new to Evanston.
Rainey said that years ago she worked across the street from the building and remembers when the area was "a very thriving business district."
She said that after the commercial strip fell into decline, Heartwood came along "and really saved that area."
While the proposal was only up for discussion Wednesday night, Rainey said she wants to support the project when final plans for it are submitted.
That's likely to happen later this summer.