Evanston: The exception?

Evanston: The Exception?

 

            Despite a slumping housing market and sales of new homes falling to a 17 year low nationwide, development in the North Chicago suburb of Evanston continues unheeded.

The city is seeing a mini condo boom. Since 1997, and when the two current development are completed, 1,753 new housing units will have been added to downtown, a yearly average of 146 units according to a recent report released by the Goodman Williams Group. The yearly average increased to 206 as of 2002.

Two new residential towers are expected to be finished this spring and another is slated for completion in 2009. The three new buildings will add more than 400 new condominium units. And that number doesn’t count new condominium construction outside the suburb’s downtown area.

If this pace of residential development were to continue for the next 10 years, downtown Evanston would have an estimated 6,700 housing units, according to the Goodman report.

The Goodman Williams Group, which specializes in market and financial analyses, has been advising Evanston since 2007, when the city put together a committee to respond to the vigorous local debate that has been sparked by the changes.

The changes were brought about when the City of Evanston began working on a comprehensive Downtown Plan, which when implemented will set goals for future planning and development in the City.

According to the group, the Evanston Planning Commission and City Council has spent months and months debating more than 12 major downtown development projects.

Resulting in substantial changes by developers to their plans in order to secure development approval from the Evanston City Council. Other developers have seen their projects denied outright because of concerns over building scale and development intensity.

The most famous example being that of the current controversial Church Street tower proposed by Focus Development. The tower, which will house 218 condos and 30,000 square feet of retail space, is planned for the triangular lot that sits between Orrington and Sherman avenues.

City consultant Marty Stern of U.S. Equities said in a report concerning the new development at 708 Church street, and in response to the proposed reduced unit building, that, “given the cost of acquiring the property, a building with significantly less salable space wouldn’t make financial sense.”

Focus Development declined to comment about the development. Other developers—including those of the three new projects in the city– didn’t return phone calls for comment.

Stern, who has advised the city on major development projects for many years, said the project couldn’t be built at all right now. “The financing markets are in complete disarray, the condo and housing markets are in disarray.”

Nevertheless, development throughout the city continues.

 “The economy hasn’t seemed to slow the new development projects in Evanston,” said Anne Ross. Ross, who has been a real estate agent for Re/Max for the past 16 years, is co-chair of the 5th Ward Development Committee.

“It could be that Evanston is such a dynamic and unique community with big city flair and feel while still maintaining a small town atmosphere.  It could also be that Evanston does not have a handle on the development trade,”she said.

 “At the end of the day, development is good; it stimulates the economy and creates opportunities for people of means,” said Ross.  

The question is: Can the housing market in Evanston sustain this continued growth while Americans across the country fall victim to collapsing mortgages and ballooning interest rates. 

“A question that no one can really answer,” Chris Ernst said. Ernst works with the Evanston Coalition for Responsible Development, which consists of a group of residents who are concerned about major development that violates existing zoning regulations.

“Depending on your sources,” said Ernst, “you will find that there is roughly a one-year supply of Condos in Evanston.”

One indication of the current situation in Evanston, he said is the number of approved Condo projects in the city that are currently on hold due to lack of financing.

“Low demand makes financing projects difficult at best,” he said.

Several large projects are unable to pre-sell enough units to secure financing and therefore cannot proceed according to the coalition.

Ernst said of the 3 current major projects that are in the works right now, two have asked for extension to start their project due to insufficient demand and the third–the Sienna project, which originally consisted of four condo buildings — has now proposed to scrap the final two condo buildings. Opting instead for a hotel and a rental unit.

The condos are still selling it is just taking longer.

The condos currently on market are selling at a rate of about 11 units per month.  According to a report commissioned by the city, on a yearly basis, a sales rate of 11 units per month indicates that market can support about 133 condominiums per year. 

For example, using this model for the prospective 400 unsold condos it would approximately take 36 months to sell. That does not take in account the additional new units that would come to play during the 36-month time frame.

“Pricing is now the most important factor,” Julie Pacheco said. Pacheco is a consultant with RE/MAX North coast. She has been in the industry for the past 7 years. “A place that would have sold at 259,00 might sell for 200,000,” she said.

“The problem is that the new development creates too much inventory. Which in turn gives the sellers less buying power. The market has become over saturated,” she said.

The city has seen a slow down since 2007 according to Donna Spicuzza housing planner for the city. However, she said, there is still activity.  

“Because there are so many condominiums on the market, there are more that are affordable to moderate income buyers, so new buyers without a lot of equity from a prior home sale have more opportunities,” she said.

Spicuzza did note that while there are more units on the market it is much harder for a first time buyer to afford a single-family home, as there are few that are priced below $300,000.

Going forward the city expects market conditions will fluctuate during the next 10 years, with periods of heightened or depressed demand for particular uses according to the Goodman Williams report.

For this reason, according to the report, the city devised the new downtown plan to be flexible to allow developers to respond to market shifts and opportunities.  At the same time, remaining balanced given the realities of the marketplace and the desires of the community.

“This is not to suggest, that Evanston isn’t feeling the effects of the current market downturn,” said Linda Goodman, principal advisor for the Goodman Williams Group.

“They are, and it shows up particularly in the number of units sold per month,” she said.

With the current foreclosure crisis expected to continue through the next two years as many of the loans created recently putting homeowners in unaffordable positions, some residents wonder about the city’s development plan, speed and reasoning as these new pricey condos continue to sprout up all over the city.

 “Many of us believe that Evanston is already saturated with condos,” said Barb Rakley, a therapist who has lived in Evanston for 18 years. Rakely described a vacant piece of land that sits close to her home awaiting the return of a developer.

“He [the developer] has asked for a year’s extension because he cannot pre-sell the number of units he needs to get construction financing.” 

The developer had already demolished the sites existing building, so the land will sit empty until the demand returns.

 

 

 

 

 

 

 

 

Generic City USA

It’s out with the old and in with the big-box retailers in Evanston as the city attempts to revitalizes it downtown economy with new, national chain store development projects. And while some shoppers in town praise the low prices and selection at these additions, not everyone in town welcomes the changes.

 Take a walk down Evanston’s Sherman Avenue and it is easy to see the city’s reinvention in progress. On one side of the street you’ll find a row of independent retailers, like Williams Shoes, Dan’s Camping Supplies and Tomato. All stores, which for many residents, have been staples of Evanston’s retail landscape for the past two decades.

 Across the street it’s a much different picture. Big-box retailers such as Gap, North Face and Pier 1 Imports have recently moved in to the newly constructed Sherman Plaza building and are vying for residents’ dollars. 

 

 The surge of new retailers is part of the Evanston City Council’s strategic development plan that dates back to March 27, 2006. The plan, which took nine months to develop, focuses on several areas, the main one being economic growth for downtown Evanston.

 According to the City Planning Committee, the city does still have a large mix of independent retailers, which under their definition is a store that is headquartered in the Chicago area with five or fewer establishments.  

 By this definition, 66 percent of downtown Evanston shops are independent establishments.  This is lower than the last reported numbers in 2004, when independent businesses represented 72% of the mix.

“As the new developments move in it makes it hard for small stores to stay in business,” said Rachel Pevine, a graphic designer from Evanston. Pevine works to save small businesses in Evanston by providing them with posters for their windows that explain the downside of the new development projects.  Pevine says the new buildings won’t accommodate small businesses because their rents will be too high.

 Another resident, Barbara Redclay, a 10-year resident of Evanston, says she has noticed the changes, “The sizes of the stores are not in scale with the city,” Redclay said.

  In a report generated by Morris Robinson, the head of economic development, officials said they want to create a downtown that has a mix of both, with the well-known names drawing large number of customers and offering predictable merchandise, and the one-of-a-kind stores giving the shopping district its distinct character. 

 According to the same report several independent stores have been bought and replaced by national brands, as was the case with The Art Store that was bought by Dick Blick Art Materials early last year.

Not everyone is opposed to the new additions. Some, like David Bower, a lawyer from Evanston, welcome the new stores. “I don’t care if a business is ‘local’. If chains are able to provide a superior product, I don’t care if it is the same store that is in Chicago or Tulsa,” Bower said.

 Many residents say they shop at big-box retailer. They just don’t want them in Evanston.

 “We don’t need them, they are everywhere,” Deborah Meacock said, “It is getting to the point where you can be blindfolded and dropped in any city and you wouldn’t tell the difference. It is generic city.”

 Meacock is a new resident to Evanston and has frequent visitors. “When I have guest visit they don’t want to shop at the same stores they have back home.”

 “They don’t want to walk acres to find two things,” Meacock said, “We have a historic city and we are killing it.”

 Either way, it is clear that the new big-box stores aren’t going anywhere as the city moves forward with development plans, like the proposed tower for the 708 Church Street block, which will house 218 condos and 30,000 square feet of retail space.

 Residents can contribute to the planning process by attending weekly meetings at the Civic Center. The next meetings are scheduled for April 30 and May 7th.

 

 

Evanston’s Incredible Shrinking Tower

Developers presented a new, shortened version of the Evanston skyscraper at Tuesday’s Development and Planning Committee meeting that will bring the controversial building down to 38-stories from the initial 49-story design.

 Revisions to the plan come after almost a year of ongoing battles and debates between developers and residents over issues concerning the loss of retail space, the economic benefits for the city and the height of the proposed tower.

 The evening’s crowd of about 80 people, which barely filled the front room, was considerably smaller than last week’s massive turnout. Audience members who attended followed along closely as the architect explained the new plan.

 The planning commission requested the session at a previous meeting to allow the developers time to tweak the plans and address concerns from the committee and community members.

 The new proposal will lower the tower by more than 100 feet, but architect Laurence Booth along with developers Tim Anderson and James Klutznick still face a tough battle to gain approval for the project.

 In the presentation, Booth said developers wanted to “stick to their guns” and create a tower that would stand as the centerpiece for the city providing unity among the buildings. The tower at its conception would have been nearly double the size of the tallest building in Evanston.

 “It’s not just the height,” that concerns residents though, said Rachel Pevine, a graphic designer from Evanston who has been closely following the tower’s development.

 It is the loss of “a diverse retail atmosphere,” Pevine said, that worries her most.

 The tower, which will house 218 condos and 30,000 square feet of retail space, is planned for the triangular lot that sits between Orrington and Sherman avenues. Some people, like Pevine, fear that only big-box retailers will be able to afford the new space.

 Those in the crowd who favor the plan painted a much different picture. They described a vital and booming downtown with the tower standing as its centerpiece.

 “It’s not like the poster you see all over town,” Butler Adams said, referring to ‘save Evanston/no tower’ posters and yards signs that residents have taken to posting in their yards. 

 “Evanston isn’t just quaint Victorian houses. It is an urban area,” he said. Adams, a student at Illinois Institute of Technology, came to support the plan he feels will bring a needed revitalization to the area.

 “Will you vote for this one?” Booth joked with audience member Renee Summers before the session started. “No,” Summers said quickly.

 Summers, a resident of Evanston and a therapist, has an office at 708 Church St., the proposed site for the building. If the plan goes ahead, she will be forced to move her business.  And the idea, she said, is not feasible due to the lack of available space in Evanston.

 Either way, both sides will have to wait and see, as a new set of public meetings have been scheduled BY the committee to further address and discuss the economic and design benefits of the tower.

 The next meetings are scheduled for April 30 and May 7th. Both will be held at 6:30 P.M. at the Evanston Civic Center.