Chicago-Main TIF District Advisory Committee Meeting Thursday, August 21, 2014 7:00 PM Lorraine H

Chicago-Main TIF District Advisory Committee Meeting Thursday, August 21, 2014 7:00 PM Lorraine H. Morton Civic Center, 2100 Ridge Ave, Aldermanic Library

AGENDA

1. CALL TO ORDER

2. APPROVAL OF MEETING MINUTES OF May 15, 2014

3. ITEMS FOR DISCUSSION A. Request for TIF Financial Assistance from O’Donnell Investments B. Next Steps

4. ADJOURNMENT

Next Meeting: Thursday, August 28, 2014

Order of Agenda Items is subject to change. Information about the Chicago-Main TIF Committee is available at http://www.cityofevanston.org/government/boards- commissions/chicago-main-tif-advisory-committee/index.php Questions can be directed to Johanna Nyden at 847.448.8014. The City of Evanston is committed to making all public meetings accessible to persons with disabilities. Any citizen needing mobility or communications access assistance should contact the City Manager’s Office 48 hours in advance of the scheduled meeting so that accommodations can be made at 847-866-2936 (Voice) or 847-448-8064 (TYY). DRAFT – NOT APPROVED

CHICAGO-MAIN TIF ADVISORY COMMITTEE MEETING NOTES MAY 15, 2014

Attendees:

Committee Members: A. Ford, R. Wootton, A. Minick, S. Chinsky, D. Geyer, J. Szostek

Committee Members Absent: M. Turley

Staff: J. Nyden, C. Plante

Aldermen: D. Wilson

1. CALL TO ORDER

Ms. Ford called the meeting to order at 7:05 pm.

2. APPROVAL OF MEETING MINUTES OF APRIL 17, 2014

Ms. Ford moved to approve the minutes of the April 17th meeting.

Ms. Wootton seconded.

The committee voted 5-0 to approve the minutes from April 17th.

3. ITEMS FOR DISCUSSION

Draft application for TIF funding

Ms. Wootton showed the committee a capital spending evaluation matrix from another organization where she serves on the board, pointing out that it does a good job of incorporating the organization’s goals into the scoring for projects seeking funding which fosters a sense of transparency by letting applicants know exactly what the committee is looking for.

Ms. Ford pointed out that although the application places a heavy emphasis on goals, it also pays attention to ROI.

Ms. Wootton conceded that the application she brought as an example is for an entirely different type of organization, but wanted to make an example of the connection to organizational mission an ranking format that was used in the application.

Ms. Nyden reminded the committee that the “but for” element is legally required where TIF funding is involved – anyone seeking funds has an obligation to show that the project would not be completed but for TIF financing. Staff incorporated the stated goals and values expressed in prior committee meetings in the draft application but included

DRAFT – NOT APPROVED

the “but for” section because it is required by state law. The rest of the application is modeled after TIF applications in used in neighboring jurisdictions. Best practice is that TIF funding should make up no more than 20% of funding for a new project.

Ms. Ford asked if the committee was free to make changes.

Ms. Nyden said yes, though it would more likely take the form of making additions in order to ensure that staff and the committee has access to all the necessary data.

Mr. Szostek commended everyone who took part in the discussion at the April 17th meeting based on his reading of the meeting minutes.

Ms. Ford asked Mr. Szostek to share any ideas or suggestions he had for the application since he had missed the prior meeting.

Mr. Szostek asked whether nonprofits would be permitted to apply since there wasn’t a separate project heading for nonprofits. Although property tax generation is important to a TIF, nonprofits do generate economic benefit.

Ms. Nyden agreed and pointed out that some nonprofits do pay property tax, including Rotary International. This could be dealt with by adding an unspecified “other” category or checkbox on the application.

Mr. Minick said he also liked the idea of an “other” box, which could include uses like a bowling alley

Ms. Wootton asked why “industrial” was included in the categories and questioned whether there were any industrial uses in the district currently.

Ms. Nyden said that the area actually has 2 industrial locations currently, including a lumber yard and FEW Spirits.

Ms. Ford suggested that in addition to adding an “other” category, there should be categoris for “entertainment’ or “service” because “office” doesn’t seem specific enough.

Ms. Nyden suggested that the confusion about uses could be dealt with by requiring applicants to submit their zoning analysis with the TIF application.

Mr. Szostek expressed some confusion over how mixed-use projects were dealt with on the form and suggested including clearer instructions that mixed use applicants need to fill out all applicable sections.

Ms. Ford agreed.

Mr. Szostek asked whether the public art component was meant to only physical art projects like outdoor sculptures or murals, or whether programming or financial support could be included.

Ms. Ford said she thought of it as mostly applying to physical art installations

DRAFT – NOT APPROVED

Ms. Nyden agreed but suggested that the question about financial support and arts programming could be directed to the City’s arts coordinator at a later time.

Ms. Wootton asked about whether the public art portion would deal with only art attached to a particular building or project seeking funding or whether it might include a commitment to public art elsewhere in the TIF district.

Ms. Nyden suggested breaking it out to avoid the confusion; including an art installation as part of a building or site design should be considered as part of the application.

Mr. Geyer suggested moving the public art question to the public benefit heading rather than the “commercial projects” section.

Ms. Ford and Ms. Wootton agreed.

Mr. Minick suggested moving the traffic study and market appraisal study sections to public benefit as well and said that the traffic piece should only be required for new construction projects, not things like façade grants.

Mr. Szostek asked about transit oriented development and parking rules.

Ms. Nyden said that Evanston’s particular rules were silent on whether paring could be reduced in areas near transit.

Ms. Ford asked whether there was new parking being built in the area because of a house being demolished.

Ms. Nyden said that the surface lot being created was to be a private lot for the adjacent apartment building. Even though it’s a private lot, this should still free up street parking because residents would no longer need to park cars on the street.

Ms. Ford asked if there should be more about the committee’s goals in the project info.

Mr. Szostek asked if this would take a narrative form.

Mr. Geyer said that the only part that deals with committee’s goals in the current draft is the public benefit section.

Ms. Ford said that it might be a good idea to add another section to speak more to the committee’s goals, but wasn’t sure how to go about it in terms of formatting on the application form.

Ms. Nyden asked how everyone felt about the example that Ms. Wootton had brought.

Ms. Ford said yes, but suggested designing a new format on the whiteboard.

Ms. Wootton created columns for residential and business impact and then rows for new people, economic considerations, traffic & parking, and quality of place. She then added columns for existing businesses and infrastructure.

DRAFT – NOT APPROVED

Ms. Ford said that the top concerns for each category are in the last page of minutes from the previous meeting; traffic and new people were the top two concerns for residential projects but was unsure about new businesses.

Steve asked why residential was even being discussed, since they usually don’t qualify for TIF funds unless the project involves affordable housing.

Ms. Ford said that she generally agrees that we don’t need more housing in the area.

Mr. Geyer said he didn’t expect to see many housing requests if any, only affordable housing.

Ms. Nyden agreed that most housing projects wouldn’t count.

Ms. Ford asked why it was included in the application then, and whether mixed use projects were a way for developers to get around the requirements.

Ms. Nyden responded that TIF money can’t be used for new residential construction, but said that it could be used for expenses specified in the statute, like site preparation and professional fees.

Mr. Szostek asked if this meant it could be used for preparation but not construction.

Ms. Nyden said this was correct.

Ms. Wootton questioned whether residential impact really refers to a residential building. To us it’s more about impact on neighbors, which would apply to a new residential building but would apply to other projects too.

Mr. Minick agreed.

Ms. Ford suggested renaming the category to “community impact” to alleviate the confusion.

Mr. Minick said he disliked the matrix idea Ms. Wootton was trying to draw on the whiteboard on the grounds that it had become too confusing. As an alternative he proposed asking for additional narratives in the public benefit section to address quality of place, community impact, impact on businesses, and innovation/sustainability.

Ms. Ford agreed and said that traffic and parking should be dealt with elsewhere.

Mr. Geyer pointed out that sustainability was already included.

Ms. Ford concurred and thanked Mr. Minick for his insight.

Mr. Geyer expressed concern that there weren’t enough quantitative questions and that the way for applicants to succeed could simply be writing good narratives.

DRAFT – NOT APPROVED

Ms. Ford said that there was room for change based on the kind of responses the committee sees to the application. The committee can always ask for more information from applicants, but the application is a starting point.

Ms. Nyden agreed and pointed out that Economic Development Committee operates in a similar way. Projects typically spend 2 months in EDC before going to City Council, and the committee can use that time to ask applicants questions and give feedback.

Mr. Szostek said he liked the idea of including some sort of ranking system in the evaluation process but that he still had concerns about parking – it’s good that the application asks about accommodating cars, but doesn’t ask about mitigating parking or traffic issues.

Ms. Wootton pointed out that parking and sustainability concerns are addressed in the instructions and introductory section that applicants will hopefully read and use to guide their responses.

Ms. Nyden said that Mr. Geyer brought up a good point about the lack of numerical metrics and suggested adding in sub-categories for each priority that applicants would have to cover in each of the five sections that address each of the committee’s priorities.

Ms. Wootton said that this might look like an earlier document presented to the committee that listed possible numeric metrics for each priority and pointed out that there was discussion about this in earlier meeting minutes.

Mr. Chinsky said that committee members might not always vote according to the stated priorities and reiterated that his top concern was impact to existing businesses.

Ms. Ford said that the main goal was to come up with a framework for evaluating projects rather than waiting for requests and being reactive. This calls for the committee to prioritize and keep things moving; we can always make changes later.

Mr. Minick said he was ok with this for now.

Ms. Ford pointed out that it took a while to come up with the current draft and suggested continuing to refine it based on previous discussions.

Mr. Chinsky said he would still like to see more quantitative data.

Ms. Wootton said that best practice in grantwriting generally suggests that any applicant would want to provide numerical measures anyway.

Mr. Szostek asked if the committee priorities would still be part of public benefit, but just wouldn’t be weighted.

Ms. Wootton said that this was correct.

DRAFT – NOT APPROVED

Ms. Nyden suggested revisiting minutes from the February meeting when the discussion about defining priorities had just started. Staff can update the form based on those discussions and tonight’s feedback.

Mr. Minick asked if the next meeting would involve evaluating an actual project.

Ms. Nyden said that this was a possibility but that there wasn’t a project ready at this time, so it would be a while before someone would be seeking funding.

Ms. Ford asked if there were any other developers looking to do something at Main & Chicago

Ms. Nyden said no, the current developer owns it and is the only one that would be proposing something

Mr. Szostek asked how many AMLI residents own cars

Steve responded that it’s in line with the zoning rules and mix of units in the building. They’re not using the full amount of parking, but it’s pretty close to one car per bedroom. It could be that there’s an element of self-selection in play – people seek the building out because they know parking is available.

Ms. Nyden pointed out that 72% of Chicago homes have one or no car.

Ms. Ford asked about electric car charging stations

Steve said that charging stations are part of LEED certification and that although AMLI offers them, few are being used.

Ms. Ford asked if developers got any breaks or incentives for including charging stations.

Ms. Nyden said that it wasn’t included in zoning

Ms. Wootton asked if the draft application was fair without being overly burdensome

Ms. Nyden indicated that this application should be able to ensure the committee gets all the data that would be needed to evaluate potential projects

Ms. Wootton asked if individuals on the committee could still assign scores to different areas when evaluating projects

Ms. Ford didn’t rule it out but said it would be tough to determine until the committee actually gets an application to review.

Ms. Nyden said that staff can draft changes to the application and send it to the committee for feedback. This means we may not need to meet again as a committee until someone applies. We’ll still send out an email to see available dates in case another meeting is needed.

DRAFT – NOT APPROVED

Mr. Szostek asked if procedure required the committee to actually vote on anything tonight.

Ms. Ford said there was no need, that everybody basically agreed.

4. ADJOURNMENT

Ms. Wootton moved to adjourn.

Ms. Ford seconded.

Committee voted 5-0 to adjourn at 8:30 p.m.

Respectfully submitted, Cindy Plante

Memorandum

To: Chair & Members of Main/Chicago TIF Committee

From: Johanna Nyden, Economic Development Division Manager Paul Zalmezak, Senior Economic Development Coordinator

Subject: Consideration of Financial Assistance for O’Donnell Investments Project

Date: August 15, 2014

Discussion Enclosed is the submission from O’Donnell Investments for financial consideration of assistance from the Chicago/Main Tax Increment Financing (TIF) district.

The meeting on August 21, 2014 will include a presentation from the development team seeking funding. The presentation will review the project that has been approved by City Council and specifics on why they are seeking funding from the Chicago/Main TIF. The Committee will have the opportunity at this meeting to ask questions and discuss the funding request together.

The meeting on August 28, 2014 will focus on formulating and finalizing a recommendation to the Economic Development Committee. More discussion of this meeting format will take place at the August 21, 2014 meeting. Application for TIF Funding

The Chicago-Main Tax Increment Financing (TIF) Advisory Committee is an advisory board consisting of residents and business owners in and around the Chicago-Main TIF district. The committee reviews all expenditures and funding requests from the Chicago- Main TIF and offers nonbinding recommendations to City Council regarding the operation of the TIF district.

Applicants seeking TIF funding for development projects within the Chicago-Main TIF district must complete an application for funding, including a detailed description of the project being proposed, the public benefits that will be provided, and a “but for” statement on why TIF funding is essential to completion of the project. The Chicago- Main TIF Advisory Committee will review funding applications and make recommendations to the Economic Development Committee and City Council.

In reviewing applications for funding, the Chicago-Main TIF committee will prioritize those projects that enhance the quality of place of the Chicago-Main corridor and surrounding neighborhoods. Particular attention will be paid to innovation, sustainability, and the proposed project’s impact on the existing business community, as well as impacts to traffic and parking.

In order to enhance the quality of place and support the delicate balance of land uses, businesses, new and existing residential units, the Committee has determined that following are of great importance when considering funding for projects. Below is a highlight of the priorities identified by the Committee:

Funding of TIF Eligible Expenses for Housing: In consideration of funding in support of new or rehabilitated housing, the Committee identified the impact on traffic and parking to the existing neighborhood as well as the addition of new residents and visitors as important characteristics of new development. Specific consideration will be paid to the available parking provided on-site and off-site as well as the increase in average daily traffic counts for the neighborhood. The impact of new residents will also be taken into consideration and how many new units will be added that will increase foot traffic, school enrollment, and create demand for neighborhood retail and services.

Funding for Commercial Development: In consideration of funding in support of new or rehabilitated commercial uses that would introduce new businesses to the area, the Committee identified the impact on existing businesses and additional new tax revenue as important characteristics of new development. In particular, the addition of new businesses that complements existing businesses in a way that does not compete for local sales, that adds to the tax base (sales and property taxes) and creates new jobs. Funds from the TIF district should be utilized to increase the property tax (increase equalized assessed value) of the area and not be used in a way that diminishes.

Funding of TIF eligible expenses for an existing business: In consideration of funding TIF eligible expenses for an existing business, the Committee identified the project’s impact on the business community as well as innovation and sustainability measures as key factors for funding decisions. As with new businesses, this investment should not result in the reduction of property taxes or jobs. In consideration of the older building stock in this neighborhood, the investment in sustainable or innovative features is important to maintaining the neighborhood scale of this area of Evanston. CTY OF EVANSTON TIF FUNDING APPLICATION

(New Construction Projects)

Contact Information:

Name of company seeking OMS Evanston LLC assistance: Name of primary contact: John O'Donnell Telephone number: Email 312-788-1800 [email protected] address: Mailing address: 155 N. Wacker Drive, Suite 1690, Chicago, IL 60606

Project Information

Name of Project: Chicago & Main Location of project 835 Chicago Avenue, Evanston IL (address):

Type of project (check one): ☐ Residential ☐ Non-residential X☐ Mixed use PIN Number(s): 11-19-401-024-0000

Current taxable value of $72,257 property: Name of Property owner: OMS Evanston LLC Project Narrative

Provide a detailed project narrative that includes a description of the project proposal and a statement as to how the project will benefit the general public in the neighborhood and the City of Evanston at large. Successful applications should reflect the stated goals of the Committee, particularly innovation, sustainability, and quality of place. (Please note: Compliance with local ordinances and laws is not considered a public benefit). This section should include the following subheadings:

Project summary Statement of Public Benefit “But For” Statement – a statement of how the project would not be possible without TIF funding

Please also provide the following information:

Project Timeline that includes Start/Expected Completion Date; Statement on the sustainability features of this project or LEED certification plans Statement on any public art components to be included in the project Site map; include existing as well as proposed maps/plans Indicate if any residential units will be displaced by this project. If residents will be displaced, please indicate if any residents will be from “low” or “very low” income households as defined by the Illinois Affordable Housing Act. Re- housing of these displaced residents will need to be addressed in this statement. Statement signed by developer/owner, that the property has not received a Cook County real estate reduction and that such a reduction has not and will not be applied for if TIF assistance is awarded to the project. Copy of the most recent appraisal; Market studies completed that demonstrate a demand for this use; and Traffic Studies that demonstrate the impact on the traffic in the area. Completed zoning analysis

Section A (Residential Projects)

Complete this section if you are seeking TIF funding for any residential project or portion of a project.

Number of new residential units to be built: Types of units to be included (# of ___ Studio ___ 1BR ___2BR each): ___ 3BR+ Number of parking spaces included: LEED ☐Yes ☐No Unit ownership: ☐Rental ☐Condo/Co-op Certification Will the project have an affordable housing ☐Yes ☐No component? If yes, what percentage of units will be affordable housing?

Section B (Non-Residential Projects)

Complete this section if you are seeking funding for any non-residential development project. Type of Use (if mixed, select all that X☐Office X☐Retail / Restaurant apply) ☐Industrial ☐Entertainment ☐XOther Square Footage (total) 191,670sf Number of parking spaces 82 spaces below grade +3 lifts, +the potential for an additional 12 included: lifts. 30 spaces at grade, 25 spaces at 945 Chicago lot. Estimated # of Estimated # of construction jobs created 150-200 permanent jobs created MWEBE X☐Yes ☐No LEP ☐Yes ☐No No Specific Goal Pro Forma & Revenue Projections (Both Residential & Non-Resdential Projects Must Complete) See Attached. (Applicants may use attachment to provide this information) Sources of funds

Equity % of total cost Developer equity $ Other Equity $ Total Equity $

Loans % rate term Construction $ Financing Permanent $ Financing

Gov’t Assistance $

Other Funding $ (______)

Total Sources of $ 100% funds Uses of Funds $ per S.F. of total building area Land Acquisition $ Demolition $ Site preparation $ Soft Costs/Fees $ Soft Cost Contingency $ Hard Construction Costs $

Revenue Projections

S.F. Rent per S.F. Commercial Rent Expense Recovery Residential Rent Parking Revenue Other Revenue GROSS POTENTIAL $ INCOME

Residential vacancy % Commercial vacancy % EFFECTIVE GROSS INCOME

EXPENSES Year 1 Year 2 Maintenance & Repairs Real Estate Taxes Insurance Management fees Professional Fees Other (______) Other (______) TOTAL EXPENSES:

NET OPERATING INCOME:

CAPITAL EXPENSES Capital expenses (tenant improvements, reserves, commissions) Debt Service

NET CASH FLOW:

Also provide:

Estimated new TIF revenue (copies of TIF projections)

See Attached. TIF FUNDING APPLICATION

Mixed Use Project

SE corner of Chicago Ave. & Main St.

Evanston, IL

PROJECT NARRATIVE

Project Summary

The project will consist of the development of an approximately 30,400 SF vacant parcel at the SE corner of Chicago Ave. and Main Street. The site is at an exceptional location at the intersection of 2 prominent streets in South Evanston, directly across Chicago Ave. from both the Metra and CTA Purple Line stations and is also served by Pace Bus lines and the Northwestern Shuttle.

The Sponsor has been working with the alderman, city manager, and the Economic Development staff from the city for 4 years in a cooperative effort to achieve the city’s goals for the district. Along with the City of Evanston and Northwestern University, the Sponsor applied for and was awarded a State of Illinois gigabit challenge grant whose goal is to connect 1,000 new doors to ultra-high speed internet fiber. This internet fiber will be brought directly to the corner of Chicago & Main and distributed throughout the building allowing all residential and office tenants to connect to this service. In addition, other buildings in the area will be able to connect to this fiber service.

Quality of Place

The project will be a 9 story mixed use building. Retail space, office/residential lobby and parking will be located on the ground floor. The second floor will be office space and amenities for office and residential tenants including a multi-purpose room and fitness center. The second floor terrace will open from the multi-purpose room for a variety of events and uses and will include walkways, landscaping, seating, tables, and bbq grills. Floors 3 – 9 will consist of 112 rental apartments including 14 studios, 49 one bedroom units, 42 two bedroom units and 7 three bedroom units. The basement level will be for parking.

The project will utilize high quality building materials such as brick, glazed brick, granite, aluminum window frames, and both clear and spandrel glass. The appearance is modern while the materials are contextual with the surrounding neighborhood and adjacent buildings. The glassy distinctive design especially at the retail base will include exterior wall sconces, retail canopies, trees, and planters to promote a sense of openness, illumination and inviting sense of place.

The project will be a beacon to promote future development near this prominent location. It will be a model transportation oriented development which will promote the use of alternate forms of transportation such as the Metra, CTA, bicycles, or I-Go cars.

 Statement of Public Benefits

The project will provide the community with numerous public benefits as outlined below:

o The existing site has been a vacant parcel since 2007, and the addition of new businesses and residents in this mixed use building will enhance the existing retail businesses in the neighborhood. o Approximately 12,236 SF of retail space will be provided. This new retail space will create fresh retail opportunities for this retail corner. The office and retail components will also animate the streetscape with new daytime activity. o Mixed use development that combines residential and retail is desired along Chicago Ave. according to the Neighborhood Planning Committee of the Evanston Plan Commission and adopted by the City Council on April 11, 2000. o The project will provide a 4 feet setback and widened sidewalk of 14 feet along Chicago Ave. which will allow for extensive planters and trees along the sidewalk which is currently too narrow. o Hardscape and landscape improvements will be made at the sidewalks on both Main Street and Chicago Ave. including the 4 feet setback on Chicago Ave. and at the corner setback. o A minimum of 5 Evanston residents with a goal of 10 Evanston residents will be hired during construction. o Developer will pay the city $72,281 for 4 parking meters being removed permanently on Chicago Ave. The removal of these 4 meters will create a new right turn lane in the north bound direction. o Developer will pay $2,250 for each parking meter that is temporarily capped or removed during construction. o The alley adjacent to the site will be repaved with concrete. o Four utility poles in the alley adjacent to the site will be removed, and the utilities will be relocated below grade. o In the event the project is converted to condominiums, the Sponsor will contribute $440,000 to the Affordable Housing Fund. o It is projected that the project will generate $14.8 Million of tax increment to be used by the City for necessary infrastructure in the neighborhood, participate in public/private partnerships, and encourage transit oriented development and improvements.  “But For” Statement o A recent office transaction in downtown Evanston can be used for comparison with the Chicago & Main project. 909 Davis Street is a 207,743 SF office building which was built in 2002. The building was 97% leased in 2011. The building sold for $35,100,000 at a 10.00% cap rate and a price of $168.96/SF. o The Chicago & Main project contains 13,427 rentable SF of office. Market rents in Evanston for a new building are approximately $15.00/SF net. With vacancy at 10%, the projected net income for the office is $163,000 per year. o Utilizing an income approach, at a 10% cap rate, the office value is only $1,630,000. Utilizing a price/SF of $168.96, the value is $2,268,000. However, the development cost for the office including land, hard, soft costs, and the off-site parking lot is $5,128,000. Consequently, there is a gap between the value and cost of $2.9 - $3.5 Million. But for the TIF, the office component of the project is not feasible.  Project Timeline o The current project schedule is to issue GMP drawings December 1, 2014, and break ground in February, 2015. The construction schedule is 14 ½ months allowing for building opening in April, 2016.  LEED Certification Plans & Innovation o Technology: . The project will be designed as a LEED silver certified building. The second floor terrace will be a Green Roof. Low-flow plumbing fixtures will be installed to limit the outflow of water. The window glass will have a low ‘e’ coating which will reduce the radiation transmitted from the sun. The basement will have a 6,500 cubic foot storage tank which will hold storm water and discharge it into the sewer system on a controlled basis. o Transit Oriented Development: . The site is one of only 5 locations in Illinois with adjacency to both the Metra and the CTA (Purple Line). The Purple Line express has only 5 stops between Main Street and Clark/Lake in Chicago. The Metra train has only 4 stops to the Loop, and the travel time is less than 20 minutes. There is a full spectrum of other transportation alternatives including 2 Pace bus routes, the Northwestern shuttle and a bike lane. Many convenience stores such as Trader Joe’s, Whole Foods, Walgreens and a variety of restaurants are less than a mile away which promotes walking. The Northwestern campus is also a mile north. o Encouragement of Alternate Transportation: . The building will provide two car share cars, and the initial and annual membership fee will be waived for residents. Studies have shown that for each Zip or I-Go car 15 – 17 cars are removed from the roadways, and 7 or 8 residential tenants will sell their car. Bike storage for 50 bicycles will be provided on the ground level, and this number can be increased. New residents will also be provided with a Ventra and Metra pass upon lease signing. . There is a consensus that the public is purchasing less cars/household especially when households are in proximity to mass transit. The cost of ownership is prohibitive especially among young people. The average car costs $745.50/month and the average SUV costs $946.67/month to own. Reducing the reliance on vehicles at our development will reduce our project’s overall carbon footprint. o Innovation in Shared Parking: . Permitted parking allows for the opportunity to share the same parking spaces during countercyclical periods. 50 – 60 below grade residents are expected to vacate their parking space M- F, 7AM – 6 PM. During this same period, an average of 30 office residents will utilize these spaces. . We have the opportunity to install 3 car lifts initially which can accommodate 2 cars/lift and 15 additional lifts if there is demand. The space requirement for these lifts is no greater than for a single space thus reducing the construction materials required for parking. . In addition, if required, the project will purchase a 25 space parking lot ½ block north at 935 Chicago Ave. for the use of retail customers and employees, office tenants, and if desired residential tenants. To the extent this lot is not used, in the future it may be turned back to the community or city for additional parking or redeveloped.  New Residents o Superior transit proximity is a key differentiator of our leasing/marketing plan. We anticipate these new residents will add a desirable mix to the neighborhood as follows while also limiting the number of new vehicles: . Younger singles (50% car, 50% transit or other transportation mode) . Younger couples/Roommates (most are 1 car or 1 transit) . Single Parent (1 car) . Empty Nester(s) (1 car) . Student (20% car, 80% transit/other) o We expect that many of the adults with children will be attracted to the area due to the close proximity of Lincoln School, one of the best elementary schools in Evanston.  New Workers and Businesses o The retail tenants are expected to be a mix of a fast/casual restaurant or cafe, bank, hair stylist, dry cleaner, or convenience store all of which will provide a new amenity to the residential tenants and the community. o The office tenants have not yet been identified, but within the approximately 13,000 SF office area, there are likely to be 30 – 40 new workers at any one time during the day who will activate the area and purchase goods and meals. In addition, there are likely to be evening events utilizing the building’s multi-purpose room and terrace which will attract outside visitors.  Public Art o The project will include public art in the form of decorative stamped concrete walks, special brick work, glass blocks, or landscaping all inclusive of installation and maintenance.  Site Map o See attached Site Map.  Displacement of Residential Units o No residential units will be displaced. The site is vacant.  Cook County Real Estate Tax Reduction o (To be discussed)  Appraisal o See attached assessment from the Cook County Assessor’s office.  Market Study o See attached Market Assessment as prepared by Valerie S. Kretchmer Assoc. for the City of Evanston and the RTA.  Traffic Study o See attached Traffic Study as prepared by KLOA dated January 16, 2014. The conclusions in the report are as follows: . Minimal new traffic will be generated. . No significant impact to the roadway system. . All intersections are projected to operate at acceptable levels of service. . The alley can accommodate the limited amount of new traffic. . The alley access to parking will reduce the traffic impact on Chicago Ave. with pedestrians. . Outbound traffic onto Chicago Ave. will be right turn only. . The removal of 4 parking spaces on the east side of Chicago Ave. will allow for the addition of a right turn lane in the northbound direction.  Zoning Analysis o The Zoning Analysis is being updated by zoning staff.

Development Site PARKING LOT

1 AN ANALYSIS AND DETERMINATION AS TO ANY DIMINUTION OF VALUE TO SURROUNDING PROPERTIES CAUSED BY THE DEVELOPMENT OF THE SUBJECT CORNER PARCEL OF LAND WITH A 9-STORY MIXED USE BUILDING

LOCATED AT: SEC MAIN STREET AND CHICAGO AVENUE 516-34 MAIN STREET/835-39 CHICAGO AVENUE EVANSTON, ILLINOIS

PREPARED BY: PRICE APPRAISAL INCORPORATED 5 REVERE DRIVE, SUITE 430 NORTHBROOK, ILLINOIS 60062 Price Appraisal, Inc. Real Estate Appraisers and Consultants

January 28, 2014

Mr. John O’Donnell OMS EVANSTON, LLC 155 North Wacker Drive Suite 1690 Chicago, Illinois 60606

Re: SEC Main Street and Chicago Avenue 516-34 Main Street/835-39 Chicago Avenue Evanston, Illinois

Dear Mr. O’Donnell:

At your request, you asked us to determine whether the proposed Special Use would have any negative effects on surrounding property values.

This property is currently an unimproved parcel of land proposed to be improved with a LEED Silver Certified, urban in-fill, 9 story mixed use building containing 112 residential apartments located on floors 3 through 9, ±13,818 square feet of gross rentable retail area located on the ground floor, ±13,285 square feet of state-of-the-art incubator office space located on the 2nd level and 104 total parking spaces allocated to 74 spaces for the residential units located on the lower level and 30 spaces allocated to retail space located on the ground level. This irregularly shaped corner parcel has 186 feet of frontage along the south side of Main Street, 179.69 feet of frontage along the east side of Chicago Avenue, 182.9 feet of depth along the site’s south lot line and 153.2 feet of along the parcel’s east (rear) lot line (along a 20 foot public alley) for a total parcel size of ±30,500 square feet and is zoned C1a by the City of Evanston.

Based on renderings and drawings prepared by GREC Architects dated November 13, 2013, the proposed project will preserve and enhance the current and future site characteristics with ample open green space throughout the project. In addition, it is not the Appli- cant’s intention to alter the existing topography and/or any geologic features while develop- ing this proposed project. This parcel has been vacant since 2007 and it is the intent of this Applicant and developer to construct this predominately glass exterior constructed building utilizing the highest quality materials to create an appearance that will complement the surrounding recently developed projects and in conformance with and subject to building codes while keeping in mind the sensitivity of this neighborhood’s needs and requirements.

5 Revere Drive, Suite 430 • Northbrook, Illinois 60062•224.723.5500 • (f) 224.723.5492 • priceappraisalinc.com Price Appraisal, Inc. Real Estate Appraisers and Consultants

Mr. John O’Donnell January 28, 2014 Page 2

It is the intention of the developer to develop this parcel with 112 residential apartments allocated to 14 studios, 49 1-bedroom, 42 2-bedroom and 7 3-bedroom units, as well as ±13,285 square feet of gross rentable state of the art incubator office area, ±13,818 square feet of gross retail area and 104 parking spaces. Based on this development plan, it appears that this unit mix as well as overall building utility would meet market acceptance and be in conformance with other mixed use projects in the community.

The subject parcel, to the immediate east, north and northwest is surrounded by an 8 and 9 story, mixed use development and the subject’s proposed plan indicates the subject parcel will be developed with a 9-story mixed use project. This parcel has been vacant since 2007 and this development will contain a 9-story, mixed use, urban in fill development compatible with surrounding land uses and subject to the Building Code as it is expected to be and should enhance and strengthen Evanston’s economy. The subject building is being designed to achieve a LEED Silver Certification and is planned to be developed and incorpo- rate design measures to reduce heat island effects, capture and re-use storm water, reduce the use of potable water, optimize energy efficiency, employ recycled and locally sourced materials and enhance indoor air quality.

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The proposed use at this location will encourage, facilitate and enhance the continuity, concentration, and pedestrian nature of the area in a manner similar to that of retail uses of a comparison shopping nature. The key point to consider is that the proposed mixed use project is in conformance with and will be erected subject to the Building Code for the City.

According to the Redevelopment Implementation Plan for Evanston’s Main Street/Chicago Avenues Business District as of January 24, 2013, the subject is located within a recently designated TIF District which is planning on serving as a catalyst to make targeted reinvestment in the business, pedestrian and transit assets of this area and the reported proposed budget by the City of Evanston for this TIF District is $25,000,000.

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This redevelopment plan focuses on four major areas of potential new investment through this TIF District including:

1) Transit Oriented Development 2) Public Infrastructure ( roads, sewers, water) 3) Open Space. And 4) Private Development

Historically and according to the City of Evanston’s Planning Department, the subject site was improved with a two story retail-office development. This building was reportedly demolished circa 2007 and was slated for redevelopment as a mixed use improvement. However, after the owner failed to make timely loan payments, the lender, Cole- Taylor Bank filed a $4.3 million foreclosure suit in late 2008. In December, 2010, Cole Taylor Bank sold the Property to the subject developer for $1.65 million. In addition, the Applicant estimates the Project will generate approximately $16,000,000 in additional tax revenue. The Project will remedy a long standing blighted parcel of land within an otherwise active residential, retail and business district with the proposed residential units hoping to attract users to this project because of the desirable nearby schools, mass transit system as well as other local amenities.

According to a provided Plat of Survey with Topography described by B. H. Suhr and Com- pany, Inc. dated November 7, 2013 identified as Order Number 13-380, the following is the subject’s legal description:

LOT “A” IN THE MAIN CONSOLIDATION, BEING A CONSOLIDATION OF LOTS 1, 2 AND 3 IN BLOCK 11 IN WHITE’S ADDITION TO EVANSTON, IN SEC- TION 19, TOWNSHIP 41 NORTH, RANGE 14, EAST OF THE THIRD PRINCIPAL MERIDIAN, ACCORDING TO THE PLAT THEREOF RECORDED JANUARY 5, 1977, AS DOCUMENT NUMBER 23769201, IN COOK COUNTY, ILLINOIS.

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REGIONAL DATA

The subject is located in the Evanston community on Chicago’s north side in Cook County, Illinois. As the area is highly dependent upon the surrounding metropolitan area, this analysis focuses on the greater Chicago metropolitan area. The following information has been extracted from the most recent National Real Estate Index Market Report, Urban Land Insti- tute’s Market Profiles and various real estate publications.

The Chicago Metropolitan area consists of over 4,600 square miles of land at the south- western tip of Lake Michigan in Northeastern Illinois. Six Illinois counties including Cook, DuPage, Will, Lake, McHenry, and Kane make up the Chicago Metropolitan Statistical Area (SMSA). As is true with most all of the large metropolitan areas in the northeast and Mid- west sections of the country, the SMSA has reached maturity and is no longer considered an area of dynamic growth.

SUBJECT PROPERTY 835-39 Chicago Avenue/ 516-34 Main Street Evanston, IL

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The following table outlines the population changes that have occurred in Chicago and surrounding counties included in the SMSA.

CHICAGO AREA POPULATION STATISTICS 2012 2017 % Change County Estimate Projection 2012-2017 Cook (IL) 5,181,135 5,149,578 -0.6% DeKalb (IL) 107,130 112,556 5.1% DuPage (IL) 919,942 929,099 1.0% Kane (IL) 529,803 569,857 7.6% Kendall (IL) 123,577 147,912 19.7% Lake (IL) 711,758 734,974 3.3% McHenry (IL) 315,418 333,829 5.8% Will (IL) 700,868 174,087 4.3%

After a steady population decline over several decades, Cook County and the City of Chi- cago experienced a population increase. Excluding Cook, the five Illinois counties experienced growth with most growth in the surrounding counties attributable to the emigration of people from the City rather than an influx of new people into the area. In summary, the overall population increase of Chicago and Cook County reflects the growing nationwide trend among large older cities in established areas of the country in which there has been little room for growth and where redevelopment is on the rise.

Truckers as well as commuters utilize a metropolitan expressway system consisting of six interconnected expressways including the Edens Expressway (I-94) to the north, Kennedy Expressway (I-90) to the northwest, Eisenhower Expressway (I-290) to the west, Stevenson Expressway (I-55) to the southwest, Dan Ryan Expressway (I-90/94) to the south and the Bishop Ford Freeway (I-94), formerly the Calumet Expressway, to the far south. Additionally, Interstates 355, 88, 57 and 294 connect to the metropolitan expressway system providing excellent interstate access.

In conclusion, the Chicago Metropolitan area is economically strong with its base shifting from manufacturing to service-oriented jobs. Additionally, because of the area’s diversified labor force, logistics relative to the rest of the country, transportation systems and general supporting governmental bodies desirous of attracting new businesses, the general area remains a viable and attractive region for industry and commerce.

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AREA DATA

The purpose of a market area analysis is to identify and evaluate the four basic forces that influence the value of real property. From a proper analysis, a reasonable conclusion regarding the future values, demand, growth, etc. of a given area can be formulated.

The subject is located in the City of Evanston on the northern border of Chicago and along the western shore of Lake Michigan, approximately 15 miles north of Chicago’s Loop or Central Business District and encompassing an area of approximately 7.5 square miles. General boundaries of this community include Isabella Street on the north, Lake Michigan on the east, Howard Street on the south and McCormick Boulevard on the west. Chicago is located on the southern border and the nearby communities of Skokie and Wilmette lie to the west and north, respectively.

SUBJECT PROPERTY 835-39 Chicago Avenue 516-34 Main Street Evanston, IL

Evanston is the ninth largest City in the CMSA and the downtown district has more than 300 specialty shops, restaurants and service businesses. Business activity has had steady growth from ±1,680 businesses in 1950 to ±2,500 businesses in 2010. Evanston remains moderately strong in terms of commercial activity and is projected to remain reasonably stable in terms of its development activity for all property types in the immediate future. The retail district along Main Street and Chicago Avenue has an eclectic group of businesses including many independently owned stores and restaurants that serve both local and in some cases, regional clientele. Many operators have been in business in their current locations for decades.

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The high population density and household income are attractive to retailers with population and housing unit growth over the past decade due to replacement inventory in the downtown district.

The following table presents a population by employment summary within a 1 mile, 3 mile and 5 mile radii of the subject. POPULATION BY EMPLOYMENT STATUS 1 Mile 3 Mile 5 Mile Radius Radius Radius

Total Employees ±10,522 ±70,742 ±166,821 Source: STDB online

According to STDB online, ±91 percent of the civilian population in Evanston and the surrounding five mile radius is employed and ±9 percent are unemployed. Evanston employs approximately 36,000 people in the private sector (Illinois Department of Em- ployment Security) and reports an unemployment rate of ±7.7% (IDES September, 2011).

Neighborhoods and districts undergo a constant process of change that affect the growth and decline patterns of property maintenance levels and values. This is commonly referred to as a “life cycle” which consists of four stages outlined below.

1. Growth-a period during which the neighborhood gains public favor and acceptance; 2. Stability-a period of equilibrium without marked gains or losses; 3. Decline-a period of diminishing demand; and 4. Revitalization-a period of renewal, modernization, and increasing demand.

Main Street is a primary east/west roadway, while Chicago Avenue is the main north- south roadway in Evanston connecting to the City of Chicago to the south. Green Bay Road merges with Ridge Avenue to the east of the subject and provides linkage to the north shore communities. Sheridan Road is a north shore roadway that meanders north along Lake Michigan throughout the north shore communities. To the south, Sheridan Road connects to Lake Shore Drive in the City of Chicago and primary access to Chicago to the south and Milwaukee to the north is via Route 41.

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Public transportation is excellent with bus service along primary thoroughfares as well as the CTA Purple Transit Line having a local stop on Chicago Avenue between Main Street and Washington Street providing daily service between the Linden Station in Wilmette and Howard Street Station on the border of Chicago and Evanston. Lake Shore Drive (I-41) be- gins several miles south of Evanston and I-94 is several miles west providing access to the suburbs. Evanston enjoys a good transportation system with several rapid transit stations, and in particular, the Metra Union Pacific/North Line Station at 600 Main Street providing daily service between the Ogilvie Transportation Center in Chicago and Kenosha, Wiscon- sin, as well as local bus routes servicing the subject site. Driving distance to the Loop is approximately 12 miles south while the distances to O’Hare International and Midway Airports are approximately 15 and 22 miles, respectively.

Redevelopment of Evanston’s downtown area has been occurring for the past decade including Northwestern University Research campus that has been developed with mixed-use projects that include a hotel, movie theaters, retail and office space, residential units, mixed use structures and parking garages. Economic conditions coupled with infrastructure redevelopment and tax relief assistance by the City of Evanston resulted in renewed interest in the downtown shopping district. The district has improved with predominately two and three-story mixed-use buildings that are newer to 100 years old flanked by 5 to 25 year-old mid and high rise office and residential buildings.

The following table presents a demographic summary within a 1-mile, 3-mile and 5-mile radii of the subject.

DEMOGRAPHIC SUMMARY 1 Mile 3 Mile 5 Mile Radius Radius Radius 2011 Population Estimate 34,251 235,849 522,487 Annual Growth Rate 2010 to 2015 .30% -.80% -0.70% Number of Households 2010 15,838 88,832 204,682 Average HH Income $63,811 $51,932 $54,801 Source: claritas.com

The community has a balance of commercial and residential land uses and adequate inventory at this time. Replacement inventory is anticipated in the long term as the economy improves and demand supports development. The City has a good level of community amenities and offers good proximity to Chicago’s CBD and stable demand for real estate assets is forecast in the near term.

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2013 INCOME CHARACTERISTICS ZIP CODE 60202 AND CITY OF EVANSTON

60202 Evanston Number Percent Number Percent 2013 Households 13,730 30,475 Under $15,000 1,006 7.3% 3,516 11.5% $15,000-24,999 972 7.1% 2,156 7.1% $25,000-34,999 1,248 9.1% 2,425 8.0% $35,000-49,999 1,603 11.7% 3,372 11.1% $50,000-74,999 2,595 18.9% 4,805 15.8% $75,000-99,999 1,803 13.1% 3,552 11.7% $100,000+ 4,503 32.8% 10,649 34.9%

Median Household Income $67,952 $68,305 Source: Demographics Now and Valerie S. Kretchmer Associates, Inc.

The immediate area is comprised of a variety of uses that generally include retail and/or service-oriented properties, recently developed mixed-use projects to older single and multi-story developments generally in good condition. A mixed-use, 9 story development with parking and drive through lanes for the Charter One® Bank was developed at the subjects northeast corners of Main Street and Chicago Avenue with a common address of 525 Main Street, to the south at 831 Chicago Avenue, there is a 2 story, multi-tenant commercial building, to the immediate east of the subject site at 514 Main Street, there is a 9 story mixed use improvement, while at the subjects’ northeast corners of Main Street and Chica- go Avenue, with a common address of 900 Chicago Avenue, there is an 8 story, mixed use building. The subject site, at a traffic controlled intersection, with the roads in the immediate area generally having sidewalks on both sides of the streets is considered a prime vacant corner in the City, while Main Street and Chicago Avenue per se are considered desirable streets with the train tracks for public transportation purposes located1/4 blocks west of the subject site.

Evanston High School is known throughout the metropolitan area for its excellent educational program. Evanston public schools also include elementary and middle schools with Lincoln School, a desirable elementary school located at 910 Forest Avenue, approximately .2 miles east of the subject. In addition to Northwestern University, other institutions of higher education are located within this community. Numerous parochial and non-sectarian private schools provide additional primary and secondary alternatives for area residents. Addi- tionally, places of worship of literally every denomination can be found in the community.

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SUBJECT PROPERTY 835-39 Chicago Avenue 516-34 Main Street Evanston, IL

Evanston’s real estate tax rate is considered one of the highest in Cook County and be- lieved to be largely a result of Northwestern University, a major area institution which owns a substantial amount of land not subject to real estate taxes and pursuant to State law. The community has historically invested heavily in the public schools and though the commercial and industrial tax base is substantial, the loss in Illinois state aid for the district results in continued heavy reliance on real estate taxes for funding the local schools. Nearby communities with a more substantial commercial and industrial tax base reflect considerably lower real estate taxes.

Demand continues to exist for downtown land on which to build residential units. Several new condominium developments include the 156-unit Chicago Avenue Place which offers ground floor commercial space at Dempster and Chicago Avenues, the Optima Tower at the southwest corners of Davis Street and Sherman Avenue with 105 residential condominiums and ground floor retail on a ±32,000-square-foot site while Church Street Station is a Focus Development project with 105 condominium units. The Sherman Plaza Venture, a mixed-use high-rise plus ±1,400 stall parking garage was completed at the northwest corners of Davis Street and Sherman Avenue. Developers are looking at downtown land with an eye towards redeveloping old retail stores and constructing new housing with retail shops on the first floor in a mixed use development.

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EVANSTON CLASS A APARTMENT BUILDINGS Monthly Approx. Name # of Unit Type Rental Square Address Units (Bed/Bath) Range Footage Comments Amli Evanston 214 Near Main Street CTA & Metra stations. 737 Chicago Avenue 5 Studio $1,580 500 Amenities incl. fitness center, LEED-certified, 124 1/1 1,559-2,180 632-1,053 garage. Some floor plans have terraces, bal- 44 2/2 2,330-3,415 1,064-1,460 conies, tech space. 7,900 SF of floor retail 12 3/2 3,475-3,710 1,462-1,557 space in north half of building. Live/work 19 Live/Work 1,700-2,500 924-1,850 units include ground floor and 2nd floor loft in south half of the ground floor space. Opened April, 2013. The Park Avenue 283 Downtown Evanston. Bldg. has doorman, 1630 Chicago Avenue Studio $1,356-1,639 527-540 garage, party room, laundry room, bike stor- 1/1 1,413-2,151 600-800 age, rooftop pool and deck, fitness center, 1/1+den 2,032-2,723 1,017-1,094 business center with conference room. 2/2 2,240-3,277 1,090-1,315 Whole Foods® and other retailers adjacent 3/2 3,604-3,880 1,434-1,574 to or in ground floor of bldg. Opened 1997. Evanston Place 189 1715 Chicago Avenue Studio $1,629-2,074 567 Downtown Evanston. Bldg. has garage, fit- 1/1-1.5 1,719-2,739 657-958 ness center and laundry rooms on each floor, 2/2 3,109-4,149 966-1,221 pool, and clubhouse. Oldest of Class A 3/2 4,569 1,968 downtown bldgs. Built 1990. The Reserve at Evanston 193 1930 Ridge Avenue Studio $1,319-1,344 550-640 Just north of Downtown Evanston. Some 1/1 1,274-1,564 575-780 units have balcony or patio. Bldg. has gar- 2/1 1,794 870-890 age, bike storage, fitness center, outdoor 2/2 1,894-2,155 1,015-1,110 pool with sundeck and grills, storage lockers 3/2 3,443-3,939 1,205-1,445 Opened 2004. The Grand Bend 49 1228 Emerson Street (in- 1/1&1/1+den $1,500+ 830-1,451 Development north of Downtown - now rent- clude 2/2 2,350+ 1,410-1,620 ing units not sold. Units have balcony or ter- sold 3/2 or 2,950+ 1,792-2,055 race. Bldg. has indoor parking and storage. con- 2/2+den Rent includes heat and gas. Opened 2007. dos) 1717 Ridge 175 1717 Ridge Avenue Studio $1,745-1,845 514-575 New construction at edge of Downtown Ev- 1/1 1,815-2,230 714-917 anston. Bldg. has club room with theater, 1/1+den 2,085-2,350 771-997 garage, cyber café, fitness center, pool and 2/2 2,395-3,090 1,050-1,261 spa. 3/2 3,390-3,795 1,283-1,411 Source: Valerie S. Kretchmer Associates, Inc. (August-September, 2013)

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Overall, there is market demand for the subject building with the subject location across the street from both the Metra Train Station as well as the CTA Purple Line transit station, each considered subject amenities. In addition, the incubator office space is scheduled to be master leased to the City of Evanston. This proposed project is considered superior due to the proposed design and overall utility of many other multi-family projects completed in the Evanston market area over the past decade and a rental building similar to the subject currently appears to be in greater demand than the condominium form of Ownership. ‘

The City of Evanston is considered to be in the revitalization stage of the development cycle with major developments occurring in the early part of the 2000 decade that saw the addition of ± 900 attached housing units. Demand for attached housing units spurred a variety of projects including new construction and conversion projects including the adaptive reuse of commercial and industrial buildings to loft residential units to typical residential units similar to that proposed on the subject site.

As evidenced by data presented, Evanston has a strong base of residential and commercial taxpayers with good access to vehicular and public transportation. The community is conveniently located to most vital Chicago business and recreational areas. As a result, Evanston has remained relatively stable in recent years as evidenced by occupancy ratios and gradually increasing property values which are expected to continue over the longer- term future. The subject area exhibits relatively good conformance with regard to other locations of this type and all surrounding properties and facilities appear to be in good condition, facilitating a continued increase in area values. The outlook for the near future is one of generally stable values for the short term, with continued increasing land and property values over the long term.

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NEW LARGER RESIDENTIAL DEVELOPMENTS IN THE CITY OF EVANSTON Constructed Since 2000

Downtown UNITS TYPE 800 Elgin/Optima Horizons 248 Condo 1640 Maple/Church Street Station 105 Condo 1720 Maple/Optima Views 207 Condo 1580 Sherman/Optima Tower 105 Condo 1100-1140 Clark/Sienna Court 220 Condo 807 Davis/Sherman Plaza 229 Condo

Outside of Downtown 1717 Ridge 175 Rental 1930 Ridge/Reserve at Emerson 193 Rental 1228 Emerson ( The Grand Bend) 49 Condo 525 Chicago/Courts of Evanston 90 Townhome 900 Chicago (NWC subject intersection) 77 Condo 737-49 Chicago (Amli) 214 Rental 809 Chicago Avenue 62 Condo 1630 Chicago (Park Avenue) 283 Rental 1715 Chicago (Evanston Place) 189 Rental 525 Main Street (NEC subject intersection) 63 Condo

SUBURBAN CHICAGO OFFICE MARKET

According to CB Richard Ellis, “the North suburbs are similar to the overall suburban market relative to vacancy rates by building class, as Class A space has a lower vacancy rate at 15.7% than Class B and Class C buildings at 21.5% and 21.8% respectively”.

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SUBURBAN CHICAGO OFFICE MARKET TRENDS Year End 2009 to Second Quarter, 2013 Rentable Building Area Vacancy Gross Asking Year End Class (SF) Rate Lease Rates PSF YE 2009 106,814,492 22.8% $21.72 Class A 42,894,167 20.8% $25.94 Class B 41,026,901 23.1% $20.80 Class C 22,893,424 26.1% $17.14

YE 2010 107,295,341 23.3% $21.14 Class A 43,475,239 20.8% $25.22 Class B 41,026,901 23.9% $20.48 Class C 22,792,501 27.1% $16.50

YE 2011 109,265,239 22.9% $20.91 Class A 44,459,173 19.4% $25.05 Class B 39,680,479 24.1% $20.42 Class C 25,125,587 27.0% $16.35

YE 2012 110,671,274 21.8% $20.79 Class A 45,182,874 18.4% $24.85 Class B 40,143,836 22.6% $20.31 Class C 25,344,564 26.7% $16.51

Q2 2013 110,226,089 20.4% $20.99 Class A 42,043,901 15.9% $25.14 Class B 43,462,090 22.1% $20.59 Class C 24,720,098 25.1% $16.29 Source: CB Richard Ellis

South Evanston is not yet considered an established office location and there is minimal office space other than storefronts and the upper levels of smaller retail buildings. Amli Ev- anston at 749 Chicago Avenue has ±17 live/work spaces in its south building. Given current vacancy rates and the available space in Downtown Class A buildings, office brokers do not consider this market ready for new office buildings. The subject developer indicated he is in the process of securing the City of Evanston committing to leasing the subjects’ incubator office space. A small amount of retail space on the ground floor of a mixed use building will be more marketable and there is evidence of these uses along Chicago Avenue, where franchises and other service/retail businesses occupy ground floor space. The current plan for the southeast corner of Main Street and Chicago Avenue includes one floor with ±13,285 square feet of office space proposed to be master leased to the City of Evanston.

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EVANSTON OFFICE MARKET August, 2013 Building Class # of Buildings Rentable Area (SF) Vacancy Rate

Total 57 2,601,939 15.4% Class A 8 1,408,915 13.2% Class B 21 447,738 22.6% Class C 14 363,801 7.3% Unclassified 14 381,485 13.4% Source: FARA Commercial Brokerage

There appears to be demand for commercial development in the community with office and retail buildings and space exhibiting reasonable occupancy levels and there does not appear to be an oversupply. Business, retail and general commercial facilities appear to ex- hibit similar strong occupancy levels. Apartments enjoy good occupancy levels, due in part to the area’s convenient location which is an amenity for the subject proposed development to public transportation and its proximity to Northwestern University. Extensive modernization and renovation of both commercial and residential structures is evident throughout Ev- anston.

There is minimal vacant space along Main Street, while Chicago Avenue has more vacancies including ground floor retail spaces, not yet leased in the Amli Evanston building. Some space north of Main Street on Chicago Avenue is vacant and has been for many years and is generally in older mixed-use buildings. The local businesses serve nearby residents, contribute to the soundness of the area and enhance the City’s tax base. While there is always going to be tenant turnover, spaces in good physical condition and priced fairly will lease. Some stores along Main Street are generally narrow and deep and not considered a desirable configuration for today’s retailers.

CB Richard Ellis reports that as of the Second Quarter, 2013, the retail vacancy rate in the north suburbs was 6.8%, down from a high of 9.5% in 2010, comparing favorably to the total suburban Chicago area where the vacancy rate stood at 9.1%. Asking rents in the north suburbs remain high averaging $20 per square foot, net with pro-rata charges to a tenant for common area maintenance, real estate taxes and insurance add to the base rent. Other suburbs with lower property taxes have lower pass-through expenses, making them more affordable.

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NORTH SUBURBS AND TOTAL SUBURBAN CHICAGO RETAIL MARKET 2009-2013 Year Gross Building Vacancy Average Asking Location End Area (SF) Rate Lease Range/SF North Suburbs 2009 9,908,367 8.7% $14.85-$18.40 2010* 9,658,367 9.5% $16.07-$20.41 2011 9,658,367 7.3% $14.70-$20.68 2012 9,830,624 6.8% $19.34-$25.61 2013** 9,438,018 6.8% $19.37-$21.82 * 2010 data from Third Quarter; Fourth Quarter not available ** 2013 data from Second Quarter, most recent available Source: CB Richard Ellis

In conclusion, the subject is in a stable community area of Chicago that benefits from good transportation, both public and private and a good mix of property uses. Although Evanston is generally considered to be in the stable stage of its life cycle, the downtown area is demonstrating a degree of revitalization, due in part to the built-up character of the community and limited availability of vacant land as well as the high demand for its premium locations while the secondary commercial locations like the subject are going through a stage of stabilization. Given continued economic trends, the subject area should continue to experience stable to moderate growth and property appreciation.

ZONING

The following zoning was obtained from the City of Evanston Zoning Department. The subject is located within the C1a zoning district which is considered the primary commercial mixed use district and is intended to provide locations for other development of mixed use buildings consisting of retail or oriented and office uses on the ground level and office and/or residential uses on upper floors as well as multi-family residential uses. A higher floor area ratio and building height will be permitted in the C1a district in order to encourage this type of development.

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Setbacks Existing Proposed Front Yard (1) Undeveloped 0’ (Main Street) Front Yard (2) 4’ (Chicago Avenue) Street side yard N/A Interior Side Yard (1) 0’ Interior Side Yard (2) N/A Rear Yard 10’ (@adj. Res Dist.)

Building Height Structure’s highest point Undeveloped 120’ (elev.) (Parapet, chimney, air han- dling units, etc.) From grade to the high point 100; (level 9 roof) of flat roofed structure FAR (floor area ratio) 5.5

The proposed Special Use will encourage, facilitate and enhance the continuity, concentration and pedestrian nature of the area in a manner similar to that of retail uses of a comparison shopping nature. Proposed street frontages providing access to or visibility for this use shall provide minimum interruption in the existing and potential continuity and concentration of uses.

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Any application to establish the proposed Special Use in the C1a zoning district must establish how the proposed occupancy and its operation will be in compliance with the following standards:

 That the establishment, maintenance, and operation of the Special Use will not be detrimental to or endanger the public health, safety, comfort, moral or general welfare. This Special use as described by the Applicant will be in conformance with the balance of existing uses in the area.  The Special Use will not be detrimental to or endanger the public health, safety, comfort, morals or general welfare as its granting represents the continuation of the positives (i.e. employment, traffic generation, quality representation) and the diminution of the negatives (i.e. consumption of parking) of an existing and integral Evans- ton business.  The Special Use will not be substantially injurious to the use and enjoyment of other properties in the immediate vicinity which are permitted by right in the district or districts of concern, nor substantially diminish or impair property values in the immediate vicinity.  Granting of the Special Use should in fact increase property values in the immediate vicinity by creating additional vitality to the area, instead of the long lasting subject vacant parcel since 2007, allowing better achievement of the overlay district’s goals.

A fully developed parcel, subject to the plans described is vital to the economic health and/or perception of economic health in this district. This Special Use Permit application represents one of the best chances for this parcel to overcome its well documented lack of development ability and contribute to the vitality of this district and neighboring properties.

The establishment of the proposed Special Use will not impede the normal and orderly development or improvement of other property in the immediate vicinity for uses permitted by right in the district.

The key points are as follows:

 Mixed-use buildings are typical of the Evanston business districts and helps establish the compact, attractive small town character of the City. Commercial uses on the first floor with office and residential above provides complementary uses and is typical of the area with similar buildings located at the subjects’ northeast and northwest corners. Commercial buildings generally front the sidewalk form- ing a cohesive pedestrian environment without the interruptions of curb cuts for parking lots on each parcel.

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 Commercial buildings were permitted to cover 40% of a lot and are allowed a building height of 67 feet by right, plus 30 feet for a site development allowance for a total allowable building height of 97 feet and it is anticipated that the subject development, will in fact be 97 feet. Concern about redevelopment that could significantly alter the scale and intensity of the business district should not be a major concern as this development is in conformance with and is compatible to nearby recent mixed use developments and reasonably similar to the buildings immediately east at 514 Main Street and the building immediately north at 525 Main Street.  Portions of this C1a District require retailing and personal services businesses on the ground floor in order to encourage a clustering of such uses, to provide for a wide variety of retail shops and expose such shops to maximum foot traffic, while keeping that traffic in concentrated areas throughout the District. This is the case with the nearby recently developed buildings’ at the subjects’ northeast and northwest corners, each having ground floor commercial as well as office space above.  Regarding parking, it appears there is adequate parking with 30 retail parking spaces and 74 residential parking spaces.  A wide variety of retail commercial uses is important throughout the business districts.  The subject is considered to be part of and will contribute overall in terms of the buildings’ overall design and utility, and be part of the Transit Oriented Development within the City of Evanston.

This Special Use will not be detrimental to or endanger the public health, safety, comfort, morals, or general welfare as its granting represents the continuation of the positives (traffic generation, quality representation or Evanston residents and homeowners) and the diminution of the negatives (i.e. consumption or parking) of an existing and integral Evanston business.

This Special Use will not be substantially injurious to the use and enjoyment of other properties in the immediate vicinity which are permitted by right in the district or districts of concern, nor substantially diminish or impair property values in the immediate vicinity. A fully developed and occupied parcel is vital to the economic health and/or perception of the district.

This Special Use will encourage, facilitate and enhance the continuity, concentration, and pedestrian nature of the area in a manner similar to that of retail uses of a comparison shopping nature. The proposed Special Use will not impede the orderly development of other properties in the immediate vicinity. The proposed project provides sufficient off-street

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This Special Use will have a mix of retail, office and residential apartment uses with retail portions adjacent to the sidewalk. In addition, the Building will meet the configuration criteria. The Special Use will meet and be permitted upon evidence that the proposed project meets standards established by the applicable classification in the Zoning Ordinance. Con- ditions “reasonably necessary to meet such standards” are specifically authorized which establishes standards for uses which generally includes:

1. The Special Use will not endanger or be detrimental to the public health, safety, comfort, morals or general welfare. The proposed Special Use is consistent with the objective to “ensure that commercial, institutional and residential development is ap- propriate to the character of and minimizes the adverse impact on its surrounding neighborhood.”

2. The Special Use will not substantially diminish or impair property values in the immediate vicinity or be substantially injurious to the Use and enjoyment of land in the immediate vicinity for Uses permitted by right in that zoning district; The proposed Special Use is consistent with the objective to development within the City to minimize potentially adverse impact to the adjacent neighborhoods and to prevent the need to significant increases in infrastructure (streets, parking, utilities, sewers) and other community resources (schools, parks, recreational facilities)”.

3. The Special Use will not impede the normal and orderly development and improvement of other property in the immediate vicinity for uses permitted by right in the zoning district. The Special Use in all other respects conforms to the applicable zoning regulations and other applicable City Ordinances and codes.

4. Adequate measures will be taken to provide ingress and egress in a manner which minimizes pedestrian and vehicular traffic congestion in the public ways. The proposed Special Use is consistent with the objective to “ensure that development pro- posals minimize the potential adverse impact they might have on the neighborhood, including the impact on pedestrian character, on-site parking, traffic patterns, congestion, open space, storm water management and City infrastructure.” In fact, it is the Applicants intention to include a courtyard on the north side of the building as well as green space on the south side of the building. In addition, the residential units will include balconies with translucent guard rails.

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5. That adequate utility, access roads, drainage and other facilities necessary for the operation of the proposed Special Use either exists or will be provided. The proposed Special Use is consistent with the goal to “provide for a wide range of office/service and retail commercial land uses and development within the existing business districts in the Corridor”.

6. The Special Use is consistent with the goal to “promote a strong community identity and opportunities to interact while building a healthy commercial tax base and to provide a broad range of goods and services so that Evanston residents can satisfy most of their ordinary shopping requirements in the City and so that non-residents will come to the City for specialty goods and services.” This Special Use is consistent with the objective to “maintain the essential quality, viability and attractive- ness of Evanston’s business districts while encouraging new economic development consistent with the character of the City and the individual business districts”.

7. The Special Use criteria are intended to assure that the location of real estate in the C1a-District is not detrimental to surrounding businesses or the business district as a whole and ideally are located in a manner that enhances the immediate area and the overall community. The proposed Special Use will not be detrimental to or endanger the public health, safety, morals, comfort or general welfare. It is my professional opinion that if the proposed project is designed as described, and according to the City of Evanston’s Building Code, this Special Use will not have any detrimental effects on surrounding property values. I considered current economic and neighborhood trends as well as the location of the subject. As a result of this analysis, a mixed use represents the highest and best use of the subject as vacant and improved.

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The immediate major thoroughfares are considered commercial and mixed use and this Special Use is compatible with that use and the proposed Special Use and development, if approved will comply with the regulations of the C1a zoning district. This Special Use promotes the goals and objectives of the zoning district, the standards for such developments and the standards for use.

Pursuant to the plans provided by the Applicant and reviewed, it is my opinion that the mixed use improvement, as described, will comply with applicable standards of this zoning Ordinance, the improvement is in the interest of the public convenience and will not have a significant adverse impact on the general welfare of the neighborhood or community, will be compatible with the character of the surrounding area in terms of site planning, building scale and project design and will be designed to promote pedestrian safety and comfort. Accordingly, based on the business practices, it is my professional opinion the granting of this Special Use should not have a negative impact or create any diminution of value on surrounding property values.

Respectively submitted,

PRICE APPRAISAL INCORPORATED

Michael A. Wolin, MAI Illinois State Certified General Real Estate Appraiser License #553.000553 Expires September 30, 2015 Date Signed: January 28, 2014

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ASSUMPTIONS AND CONTINGENT CONDITIONS

1. This analysis covers the property as described in this report and the areas and dimen- sions as shown herein are assumed correct.

2. Price Appraisal Incorporated has made no actual land survey of the property and as- sumes no responsibility in connection with such matters. Any sketch or identified survey of the property included in this report is only for the purpose of assisting the Reader to visualize the property.

3. The information identified in this report as being supplied by others, Price Appraisal In- corporated believes to be reliable but no responsibility for its accuracy is assumed.

4. No responsibility is assumed for matters legal in character, and no opinion as to title is rendered herewith. Title is assumed merchantable and all existing liens and other en- cumbrances have been disregarded.

5. Disclosure of the contents of this analysis report is governed by the by-laws of the Ap- praisal Institute.

6. Neither all nor any part of this report (especially the identity of Mr. Wolin, Price Appraisal Incorporated, or any reference to the Appraisal Institute) shall be disseminated to the public through advertising media without the written consent by the author, especially valuation conclusions.

7. To my knowledge, no engineering study has been made. No such study was furnished to determine if the soil and improvements are clear of chemicals, asbestos, waste mat- ter, solvents or contamination that would prevent the safe utilization of the facility or land for its estimated purpose.

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Certification

I certify that, to the best of my knowledge and belief, The statements of fact contained in this report are true and correct. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and is my unbiased professional analyses, opinions and conclusions. I have no present or prospective interest in the property that is the subject of this report, and I have no personal interest or bias concerning the parties involved. My compensation is not contingent on an action or event resulting from the analyses, opinions or conclusions in, or the use of, this report. My analyses, opinions and conclusions were developed and this report has been prepared in conformity with both the requirements of the Uniform Standards of Pro- fessional Appraisal Practice as well as the Code of Professional Ethics and the Standards of Professional Practice of the Appraisal Institute. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. As of the date of this report, Michael A. Wolin, MAI, has completed the requirements of the continuing education program of the Appraisal Institute. Michael A. Wolin, MAI SRA, inspected 516-34 Main Street/ 835-59 Chicago Avenue, Evanston Illinois the subject of this report on October 30, November 4, and Decem- ber 1 2013 and January 20, 2014. No one provided significant professional assistance to the person signing this report. I am fully competent to consider this type of real estate problem. This analysis conforms to the Uniform Standards of Professional Appraisal Practice (USPAP) adopted by the Appraisal Standards Board of the Appraisal Foundation.

Michael A. Wolin, MAI, SRA Illinois State Certified General Real Estate Appraiser License #553.000553 Expires September 30, 2015 Date Signed: January 28, 2014

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QUALIFICATIONS OF APPRAISER

Michael A. Wolin, MAI, SRA (Certificate #7148)

Professional Association Member (MAI) of Appraisal Institute, formerly the American Institute of Real Estate Appraisers and the Society of Real Estate Appraisers Past President to the Board of Directors of the Chicago Chapter of the Appraisal Institute Past member of Review and Counseling Division, Ethics Administration Division, Appraisal Institute Member of Chicago Board of Realtors; past Chairman and member of the Appraisers Council Selected as 1981 U.S. Jaycee Outstanding Young Man of America Managing Real Estate Broker, State of Illinois State Certified General Real Estate Appraiser, State of Illinois License Number 553.000553 Recipient of the 2007 Herman Walther Award by the Chicago Chapter of the Appraisal Institute The Appraisal Institute conducts a voluntary program of continuing education for its designated members. MAI’s and SRA’s who meet the minimum standards of this program are awarded periodic educational certification. As of the date of this report, I, Michael A. Wolin, have completed the requirements under the continuing education program of the Appraisal Institute.

Education Graduated from the University of Illinois in 1977 with a Bachelor of Science Degree in Business Administration Attended DePaul University - School of Law

Appraisal and Real Estate Experience Appraisal assignments have included office, industrial, commercial, and all types of multi-family residential properties. Has had extensive narrative appraisal experience for the purposes of financing, ad valorem tax appeal, mortgage loan, estate tax, fee simple, and leasehold estate analysis. Clients have included major financial institutions, pension funds, Fortune 500 Corporations, law firms, governmental agencies and local and national developers.

Has appeared as an expert witness in municipal Cook County Circuit Courts, Cook County Board of Tax Appeals, Zoning Board of Appeals, Illinois Property Tax Appeal Board, and the United States Federal Court.

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A D D E N D A

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Looking East at subject site from Chicago Avenue

Looking Southwest at subject site from Northeast Corner of Site

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Public Alley along subject site’s East Lot Line

NWC Chicago Avenue and Main Street/900 Chicago Avenue, Evanston, Illinois

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NEC Chicago Avenue and Main Street/ 525 Main Street, Evanston, Illinois

Building Immediately East of subject parcel- 514 Main Street Evanston, Illinois

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Looking South along Chicago Avenue from subject intersection

Looking North along Chicago Avenue from subject intersection

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Looking West along Main Street from subject intersection

Looking East along Main Street from subject intersection

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525 Chicago Avenue – Courts of Evanston

749 Chicago Avenue, Evanston, Illinois (mixed use building)

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801 Chicago Avenue, Evanston, Illinois (mixed use building)

809 Chicago Avenue, Evanston, Illinois (mixed use building)

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1630 Chicago Avenue Evanston, Illinois (mixed use building)

1715 Chicago Avenue – Evanston Place

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1100-40 Clark Street – Sienna Court Evanston, Illinois (mixed use building)

807 Davis Street – Sherman Plaza Evanston, Illinois (mixed use building)

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800 Elgin Road – Optima Horizons Evanston, Illinois (mixed use building)

1228 Emerson – The Grand Bend Evanston, Illinois

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1572 Maple Avenue Evanston, Illinois (mixed use building)

1640 Maple Avenue –Church Street Station Evanston, Illinois (mixed use building)

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1720 Maple Avenue – Optima Views Evanston, Illinois (mixed use building)

1717 Ridge Avenue Evanston, Illinois

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1930 Ridge – Reserve at Evanston, Illinois

1580 Sherman Avenue – Optima Tower Evanston, Illinois (mixed use building)

11759zon012814REV

Market Assessment for the Evanston Main

Street Transit-Oriented Development Plan

Prepared for

Parsons Brinckerhoff, City of

Evanston and RTA

October 2013

Prepared by Valerie S. Kretchmer Associates, Inc. 2707 Walnut Avenue

Evanston, IL 60201-1442

I. Summary and Conclusions ...... 1

II. South Evanston and Evanston Demographics ...... 3

III. Residential Market ...... 8

IV. Office Market ...... 15

V. Retail Market ...... 22

I. SUMMARY AND CONCLUSIONS

A. Introduction

Valerie S. Kretchmer Associates, Inc. (VSKA) was retained to prepare a market assessment for the Main Street TOD Study Area as part of a TOD plan for the area. Additional information on the Study Area is included in the Existing Conditions report and in other documents on land use, physical conditions, transit, vehicular, bicycle and pedestrian issues. The reader is referred to these documents for background material on the Study Area.

B. Conclusions

The Study Area is well located with regard to public transportation (CTA el, bus and Metra rail), a mix of housing types, proximity to good schools and parks, and a variety of quality stores and services. The retail district along Main Street and Chicago Avenue has an eclectic group of businesses including many independently owned stores and restaurants that serve both a local, and in some cases, regional clientele. Many have operated in the Study Area for decades.

The primary development parcel in the Study Area is at the southeast corner of Main Street and Chicago Avenue. Originally planned as a condominium building with ground floor retail space, the site has been empty since the recession made it impossible to pre-sell condominiums, a condition for financing.

The rental market has seen a considerable amount of activity in Evanston as in other locations in the Chicago metro area. Amli Evanston’s luxury rental building opened in April 2013 with 214 units at the south end of the Study Area on Chicago Avenue between Kedzie and Keeney Streets, and the apartments have been leasing well. One other new rental building in Downtown Evanston at 1717 Ridge Avenue has also leased a large number of its 175 units since it opened earlier this year. Prices at the two buildings are comparable and are higher than at any of the other Class A rental buildings in the city.

The southeast corner of Main and Chicago is most suitable for a mixed-use residential building with ground floor retail space that could include convenience-oriented stores, services, bank and restaurants catering to the large residential population and transit riders using the Main Street CTA and Metra stations. The most recent plan under review includes ground floor retail space, second floor office space and building amenities, and approximately 100 rental apartments, most of which will have two bedrooms. This will be easier to finance than a condominium building in the current lending environment. Assuming the building is attractive with reasonably sized units, it should be readily marketable.

This site had been targeted for office and ground floor retail space to serve technology companies. However, an experienced developer had been marketing the site for several years, but was unable to attract an anchor tenant.

Office brokers consider Evanston a niche market that is attractive to tenants who want to be close to Northwestern University, the city’s two hospitals, and whose executives live along the North Shore and don’t want long commutes. Firms that want easy highway access and visibility, or a corporate campus environment do not consider Evanston. The Northwestern University – Evanston Research Park has been unable to attract major new tenants for its buildings despite its desirable location at the north edge of Downtown and its proximity to the university. Given Evanston’s 15% office vacancy rate, without an anchor tenant, a building with only office and ground floor retail space will be difficult to finance.

However, the accessibility by public transit is a positive factor for the Study Area and the city overall. This will become more significant as companies need to attract highly educated, younger employees living in Chicago who don’t want to commute by car to more distant suburbs. A limited amount of office space as a secondary use as currently proposed should be marketable at the vacant site at Main Street and Chicago Avenue.

The market for condominiums has improved considerably in the past year. While condominium prices are still depressed compared to pre-recession prices, sales activity has increased in the past year. The number of foreclosed units is down and prices are increasing, though they still have not reached pre-recession levels. Realtors report that the market should be able to support new condominiums in the next year or two and that the Study Area would be a desirable location for a new condominium building.

Over time, there is likely to be an opportunity to redevelop blocks at the north end of the Study Area for higher intensity mixed-use projects, most likely retail/service on the ground floor with residential use above. Autobarn which occupies the block north of Lee Street on Chicago Avenue has plans to move some its operations further west in Evanston to a site off of Howard Street and Hartrey Avenue. This block is currently a dead zone for pedestrians. However, with the recent opening of Trader Joe’s on Chicago Avenue (three blocks north of Main Street near Whole Foods and Jewel), there is likely to be increased pedestrian traffic north of Main Street. This could open up development opportunities for the blocks between Main Street and Dempster Street in the future.

II. SOUTH EVANSTON AND EVANSTON DEMOGRAPHICS

The Existing Conditions Report has information on the Study Area’s demographics including population, employment, and commuting patterns. This chapter provides some additional demographic information for the City of Evanston in comparison to zip code 60202, which is considered to be the market area for retailers in the Main Street/Chicago Avenue business district. This zip code includes the Study Area and extends from the southern city limits at Howard Street as far north as Dempster Street, from Lake Michigan to the city’s western border at the North Branch Channel. The boundaries of this market area and the Study Area are shown on the map on the following page. For purposes of this assessment, the market area, South Evanston and zip code 60202 are used interchangeably.

The Study Area is much smaller geographically and only covers the area closest to the Main Street transit stations. The market area is that from which 60-70% of retail customers will come. Those using the Main Street el and Metra stations live primarily in South Evanston. Those who live north of Dempster Street are more likely to use the Davis Street Metra station than the Main Street station.

A. Population and Household Trends

The table below shows the demographic characteristics of the market area (South Evanston zip code) compared to the City of Evanston overall. South Evanston has an estimated population of 31,600 in 13,700 households. The population and household counts are estimated to have grown slightly (0.9% and 1.3% respectively) since 2010. The growth is similar to that of the city over the past few years. The city has an estimated 75,200 people in 30,500 households as of 2013.

South Evanston has smaller households on average than the city (2.30 vs. 2.47 persons). Its population is slightly older with a median age of 37.7 years compared to 34.4 years in the city. The zip code has a lower share of its population in the 15-24 year old cohort than the city (10.4% vs. 19.7%), due to the fact that most Northwestern University students live in North Evanston. The student population at and near the university brings down the city’s median age. However, South Evanston has a larger share of households ages 25-44 (32.6% vs. 27.7%), including younger singles and couples out of college. Seniors represent a smaller share in South Evanston than in the city (10.9% vs. 12.5%), due to the presence of several senior living facilities Downtown and in North Evanston.

B. Household Income

The median household income in South Evanston and the city overall is quite similar at $68,000, though the income distribution is somewhat different. Zip code 60202 has a higher share in the $35,000-99,999 range (44% vs. 39%), and lower shares of those under $35,000 (24% vs. 27%) and over $100,000 (33% vs. 35%).

3 DeLorme Street Atlas USA® 2013 Main Street Station Study Area and Market Area 4

Data use subject to license. TN Scale 1 : 20,800 0 600 1200 1800 2400 3000 ft © DeLorme. DeLorme Street Atlas USA® 2013. MN (3.7°W) m 0 180 360 540 720 900 www.delorme.com 1" = 1,733.3 ft Data Zoom 13-3

ZIP CODE 60202 AND CITY OF EVANSTON POPULATION CHARACTERISTICS

Zip Code 6 0 2 0 2 Evans ton Number Percent Number Percent

Population 2000 Census 32,208 74,242 2010 Census 31,361 74,486 Change, 2000-2010 -847 -2.6% 244 0.3% 2013 Estimated 31,642 75,210 Change, 2010-2013 281 0.9% 724 1.0% 2018 Projected 31,655 75,849 Change, 2013-2018 13 0.0% 639 0.8%

Households 2000 Census 13,703 29,652 2010 Census 13,558 30,047 Change, 2000-2010 -145 -1.1% 395 1.3% 2013 Estimated 13,730 30,475 Change, 2010-2013 172 1.3% 428 1.4% 2018 Projected 13,872 31,138 Change, 2013-2018 142 1.0% 663 2.2%

Average Household Size, 2013 2.30 2.47

Population by Age, 2013 Under 5 2,078 6.6% 4,127 5.5% 5-14 3,763 11.9% 7,976 10.6% 15-24 3,279 10.4% 14,811 19.7% 25-44 10,301 32.6% 20,829 27.7% 45-54 4,758 15.0% 9,492 12.6% 55-64 4,010 12.7% 8,579 11.4% 65+ 3,453 10.9% 9,396 12.5%

Median Age, 2013 (years) 37.7 34.4

Note: Numbers may not sum to given totals due to rounding.

Source: Demographics Now

2013 INCOME CHARACTERISTICS ZIP CODE 60202 AND CITY OF EVANSTON

Zip Code 60202 Evanston Number Percent Number Percent

2013 Households 13,730 30,475

Under $15,000 1,006 7.3% 3,516 11.5% $15,000-24,999 972 7.1% 2,156 7.1% $25,000-34,999 1,248 9.1% 2,425 8.0% $35,000-49,999 1,603 11.7% 3,372 11.1% $50,000-74,999 2,595 18.9% 4,805 15.8% $75,000-99,999 1,803 13.1% 3,552 11.7% $100,000+ 4,503 32.8% 10,649 34.9%

Median Household Income $67,952 $68,305

Source: Demographics Now

C. Housing Tenure

As of the 2010 Census, South Evanston had a slightly higher share of owner-occupied housing than the city overall (56% vs. 55%). The overall vacancy rate at the time of the Census was slightly lower in South Evanston at 9.1% compared to 9.4% citywide as shown in the table below.

2010 HOUSING CHARACTERISTICS

Zip Code 6 0 2 0 2 Evans ton Number Percent Number Percent

Housing Occupancy/Vacancy Total housing units 14,913 33,181 Vacant units 1,355 9.1% 3,134 9.4%

Housing Tenure Occupied housing units 13,558 30,047 Owner-occupied units 7,605 56.1% 16,616 55.3% Renter-occupied units 5,953 43.9% 13,431 44.7%

Source: U.S. Census, 2010

III. RESIDENTIAL MARKET

A. For-Sale Market

According to knowledgeable Evanston Realtors, the condominium market has bottomed out. In 2013 as of July, the number of condominium sales increased to 284 from 269 last year during the same period. The average marketing time decreased from 194 to 145 days and the average sales price increased by 14.3% to $247,900. In addition, the unsold inventory of condos has dropped from over 500 several years ago to only 162 as of September 2013.

The market for single-family homes has also improved with the average sales price up 3.1% this year to $532,500. The average number of days on the market is now only 59 days, half of what it had been a year earlier. The number of foreclosed properties is down, interest rates remain at historically low levels, and property owners are deciding to put their condos and homes on the market after holding back when prices were so depressed.

The table below shows the sales in the larger and newer condominium buildings in South Evanston in and near the Study Area, as well as in Downtown Evanston in 2013. The Downtown buildings are the primary competition for newer buildings in the Study Area, though they tend to be much larger and have more amenities than those in the Main Street area. South Evanston is in zip code 60202, while the Downtown buildings are in 60201. The median price for all 147 condos that sold this year in zip code 60202 was $149,900 and ranged from a low of only $30,000 up to $530,000. The lowest sales are south of the Study Area in the area just north of Howard Street near Clyde and Callan Avenues, an area that had a high rate of foreclosures. The relatively new buildings in the Study Area at 900 Chicago Avenue and 515 Main Street, as well as 1210 Chicago Avenue, a few blocks north of the Study Area at Dempster Street, had sales ranging from $120,000-530,000.

In comparison, the major Class A Downtown condo buildings had sales prices ranging from $165,000-$975,000 in 2013. Many of the sales were in the 1570 Elmwood building which opened at the beginning of the recession and for years had many unsold units. Prices were lowered considerably, resulting in sales of 21 units this year to date.

There are no new condominium buildings under construction or planned at this time. However, land prices are now more affordable than they were five years ago. As the Class A inventory of condos on the market continues to decrease, it is expected that developers will be interested in building again. Some buildings could start as rentals, but be of condominium quality so that they could be converted when the time is right.

Several Realtors contacted for this assessment indicated that by 2015 there will be demand for new condominiums. The southeast corner of Main Street and Chicago Avenue is a desirable location for a building with under 100 units. The price points should be slightly lower than in Downtown Evanston and units need to be of a high quality. Prices would probably start in the

low to mid-$300,000 range for large one and two bedroom units, some of which could have dens, offices or family rooms.

SOUTH EVANSTON AND SELECTED NEWER DOWNTOWN CONDOMINIUM SALES - 2013

Building # of Sales Median Price Price Range

South Evanston 900 Chicago Ave 2 $421,000 $312,000-530,000 515 Main Street 3 269,000 207,000-307,000 1210-36 Chicago Ave 6 167,500 120,000-240,000

Downtown Evans ton 807 Davis Street 13 460,000 168,500-584,000 1570 Elmwood Ave 21 384,000 230,000-975,000 1720 Maple Ave 13 290,000 205,000-545,000 1640 Maple Ave 6 287,500 200,000-800,000 800 Elgin Road 6 291,500 210,000-375,000 1415-21 Sherman Ave 5 243,000 165,000-490,000

60602 All Condo Sales 147 $149,900 $30,000-530,000

Source: Realtor.com and Valerie S. Kretchmer Associates, Inc.

A map showing the locations of these buildings and the Class A rental buildings is on the following page.

B. Rental Market

The rental market in Evanston has been robust over the past year. The Study Area has a large number of older rental buildings at varying price points. Buildings range from “vintage” walk- up courtyard buildings, to 1960s and 1970s elevator buildings, as well as smaller and older 3- and 6-flats. As such, there is a wide range in rents depending on the level of renovation and amenities in the building and individual apartments. There are few studios and three bedroom apartments for rent at this time. Current listings for available apartments in and near the Study Area in Southeast Evanston are shown below.

9 DeLorme Street Atlas USA® 2013 Class A Condominium and Rental Buildings

Data use subject to license. TN Scale 1 : 12,800 0 200 400 600 800 1000 ft © DeLorme. DeLorme Street Atlas USA® 2013. MN (3.7°W) m 0 100 200 300 400 500 www.delorme.com 10 1" = 1,066.7 ft Data Zoom 14-0

ASKING RENTS IN OLDER BUILDINGS IN SOUTHEAST EVANSTON

Unit Size Asking Rent Range

Studio $760-1,300 1 Bedroom $825-1,600 2 Bedroom $950-1,750 3 Bedroom $1,725-1,895

Source: Craigslist, Forrent.com, Apartments.com, Chicagoapartmentfinders.com

Several new rental buildings have opened in 2013, including Amli Evanston in the Study Area and 1717 Ridge on the western edge of Downtown Evanston. VSKA also looked at rents and occupancy at the other Class A apartment buildings in Downtown Evanston for comparison purposes. The Premier 415 building located across the street from the Howard Street CTA Red Line station is considered to be in a less desirable location than the other buildings included in the table below. It is more competitive with buildings in Rogers Park than with those in the Study Area or Downtown Evanston. The table on the following pages shows information on the most competitive apartment buildings.

Owners of older rental buildings in South Evanston noted that Amli’s wide ranging advertising has attracted more potential renters to the area, thereby increasing traffic at their buildings as well. Renters unable to afford new construction prices but who like the neighborhood are checking out older, but more affordable apartments.

The three Downtown apartment buildings open for some time (Evanston Place, The Park Evanston and The Reserve at Evanston) have high occupancy rates (95%+). The two new buildings, Amli Evanston and 1717 Ridge, are leasing well since opening earlier this year. They are the newest properties built as rentals since 2004 and are tapping into the pent-up demand and general interest in rentals by higher income households.

Another rental building started construction recently at the north edge of Downtown. Carroll Properties and Fifield Development are building a 356-unit apartment building and 14 townhouses at Oak and Emerson Streets. Slated to be completed in 2015, the building is designed with a majority of studio and one bedroom units. It will have extensive building amenities and will be more competitive with 1717 Ridge than with the Main Street area given its location.

EVANS TON CLAS S A APARTMENT BUILDINGS Aug.-Sept. 2013

Name and Address # of Net Rental Range Square Comments Units Unit Type $ Footage (Bed/Bath)

Amli Evanston 214 New construction near Main Street CTA & Metra stations. High 737 Chicago Avenue 5 Studio $1,580+ 500 level of amenities inc. fitness center, exercise studio, business center, 124 1/1 1,559-2,180+ 632-1,053 lounge, rooftop terrace with grills and fire pit, bike storage, dog run, 44 2/2 2,330-3,415+ 1,064-1,460 electric car charging stations, LEED-certified, garage. Units have 12 3/2 3,475-3,710+ 1,462-1,557 stove, refrigerator, dishwasher, washer/dryer, granite counters, wood 19 Live/Work 1,700-2,500 924-1,850 cabinets, wood-style flooring and carpet. Some floor plans have terraces, balconies, built-in tech space. 7,900 SF of ground floor retail space in north half of bldg. Live/work units include ground floor and 2nd floor loft. These are the south half of the ground floor space. Opened April 2013.

The Park Evanston 283 Studio $1,356-1,639 527-540 Downtown Evanston. Units have wood floors, stove, refrigerator,

12 1630 Chicago Avenue 1/1 1,413-2,151 600-800 microwave, dishwasher. Some units have stackable washer/dryer. 1/1 + den 2,032-2,723 1,017-1,094 Bldg. has doorman, garage, party room, laundry room, bike storage, 2/2 2,240-3,277 1,090-1,315 rooftop pool and deck, fitness center, business center with conference 3/2 3,604-3,880 1,434-1,574 room. Whole Foods and other retailers adjacent to or in ground floor of bldg. Opened in 1997.

Evanston Place 189 Studio $1,629-2,074 567 Downtown Evanston. Units have wood floors, stove, refrigerator, 1715 Chicago Avenue 1/1-1.5 1,719-2,739 657-958 microwave, dishwasher, double sink vanity in bathroom, and extra 2/2 3,109-4,149 966-1,221 storage. Bldg. has garage, fitness center, laundry rooms on each floor, 3/2 4,569 1,968 pool, clubhouse, BBQ area, free wi-fi, free coffee, free use of bldg. office for printing, photocopying and faxing. Oldest of Class A Downtown bldgs. Built in 1990.

The Reserve at Evanston 193 Studio $1,319-1,344 550-640 Just north of Downtown Evanston. Units have stove, refrigerator, 1930 Ridge Avenue 1/1 1,274-1,564 575-780 full size washer/dryer, dishwasher, microwave, disposal, 9' ceilings, 2/1 1,794 870-890 breakfast bar, lighting, wood cabinetry, free high speed Internet. 2/2 1,894-2,155 1,015-1,110 Some units have balcony or patio. Bldg. has garage, bike storage, 3/2 3,443-3,939 1,205-1,445 fitness center, outdoor pool with sundeck and grills, storage lockers. Some discounts to employers inc. Northwestern, local schools and hospitals. Opened in 2004.

EVANSTON CLASS A APARTMENT BUILDINGS Aug.-Sept. 2013

Name and Address # of Net Rental Range Square Comments Units Unit Type $ Footage (Bed/Bath)

The Grand Bend 49 1/1 and 1/1 + den $1,500+ 830-1,451 Condominium development north of Downtown that is now renting 1228 Emerson Street(includes 2/2 2,350+ 1,410-1,620 units not sold. Units have balconies or terrace, 9' ceilings, stove, condos that 3/2 or 2/2 + den 2,950+ 1,792-2,055 refrigerator, microwave, dishwasher, wood cabinets, washer/dryer, were sold) granite counters, carpet. Bldg. has indoor parking and storage. Rent includes heat and gas. Opened in 2007.

1717 Ridge 175 Studio $1,745-1,845 514-575 New construction at edge of Downtown Evanston. Units have stove, 1717 Ridge Avenue 1/1 1,815-2,230 714-917 refrigerator, dishwasher, disposal, microwave, granite counters, 1/1 + den 2,085-2,350 771-997 washer/dryer, hardwood floors, carpet, patio or balcony, walk-in 2/2 2,395-3,090 1,050-1,261 closets, wireless internet, fireplace, extra storage. Bldg. has club room 3/2 3,390-3,795 1,283-1,411 with billiards and theater, garage, cyber cafe, fitness center, pool and

13 spa.

Source: Valerie S. Kretchmer Associates, Inc.

There is some concern that the upper end of the Evanston rental market will be saturated with the above described rental buildings and another 80-unit building close to completion in North Evanston on Central Street. However, the proposed building at Main and Chicago with approximately 100 apartments won’t be ready for occupancy until 2015 at the earliest. It will have a much higher proportion of two bedroom units than the Oak and Emerson building and is expected to attract more couples and families. As such, VSKA concludes that there is likely to be demand for a new, quality rental building in the Study Area within the next two years.

IV. OFFICE MARKET

A. Office Market Trends in the Chicago Suburbs and North Suburbs

Evanston is part of the North Suburban sub-market as defined by commercial real estate brokerage firms. The Chicago metro area suburban office market is still considered to be soft by CB Richard Ellis, though the market “continued to make strides towards stabilization” according to a recent report. Vacancy rates are still high throughout the region, though some sub-markets have experienced several quarters of positive absorption of office space. Rents are still well below the pre-recession rates and do not support new construction, except in a few select locations where tenants have already committed to anchor new buildings. The table on the following page shows the overall suburban office market trends.

As of the second quarter of 2013, 20.4% of all suburban office space was vacant. Class A space is faring better (15.9% vacant) than Class B and C space, and rates have declined since 2010’s peak of 23.3%. Average asking rents are still below those of 2009, though they have increased slightly in the past two years. When the market is soft and rents are dropping, it becomes advantageous for firms to move up to better space since they can lock in very affordable rents at Class A buildings.

According to CB Richard Ellis, “The decreases in vacancy rates provided renewed hope for the market, but there is a long way to go as many sub-markets remain above 20% in direct vacancy.” Better job growth is needed before the office market can recover.

The Northwest and East-West Tollway sub-markets have seen the most leasing activity this year. The North Suburbs have almost 24 million square feet of office space with a second quarter 2013 vacancy rate of 19.4%, one point lower than the total for the suburbs overall. However, absorption has been negative in 2013 to date, though 2012 was a turnaround year for overall absorption. After more than three years of increasing vacancy rates, the market improved and absorbed over 200,000 square feet of space in 2012.

The North Suburbs are similar to the overall suburban market relative to vacancy rates by building class, as Class A space has a lower vacancy rate (15.7%) than Class B and C buildings (21.5% and 21.8% respectively). The graphs below show the North Suburban vacancy and absorption trends from 2009 through the second quarter of 2013.

SUBURBAN CHICAGO OFFICE MARKET TRENDS 2009-2013

Year- Rentable Building Area Vacancy Net Gross Asking End* (SF)Rate Absorption Lease Rates PSF

2009 106,814,492 22.8% -2,639,468 $21.72 Class A 42,894,167 20.8% -852,813 $25.94 Class B 41,026,901 23.1% -1,312,531 $20.80 Class C 22,893,424 26.1% -474,124 $17.14

2010 107,295,341 23.3% -904,124 $21.14 Class A 43,475,239 20.8% -57,377 $25.22 Class B 41,026,901 23.9% -571,221 $20.48 Class C 22,792,502 27.1% -275,526 $16.50

2011 109,265,239 22.9% -342,709 $20.91 Class A 44,459,173 19.4% 13,940 $25.05 Class B 39,680,479 24.1% -84,686 $20.42 Class C 25,125,587 27.0% -271,963 $16.35

2012 110,671,274 21.8% 965,278 $20.79 Class A 45,182,874 18.4% 556,801 $24.85 Class B 40,143,836 22.6% 363,395 $20.31 Class C 25,344,564 26.7% 45,082 $16.51

2013 110,226,089 20.4% 583,770 $20.99 2nd Qtr. Class A 42,043,901 15.9% 162,076 $25.14 Class B 43,462,090 22.1% 274,323 $20.59 Class C 24,720,098 25.1% 147,371 $16.29

* Data are from Fourth Quarter unless specified.

Source: CB Richard Ellis

North Suburban Office Space Absorption 2009‐ Q2 2013 300,000 211,826 200,000 100,000 0 Feet

‐100,000 ‐200,000 ‐131,427 Net Absorption

Square ‐300,000 ‐225,487 ‐400,000 ‐345,372 ‐500,000 ‐600,000 ‐522,736 2009 2010 2011 2012 2013 YTD

Source: CB Richard Ellis.

OFFICE MARKET TRENDS IN THE NORTH SUBURBS 2009-2013

Year- Rentable Building Area Vacancy Annual Net Gross Asking End* (SF)Rate Absorption Lease Rates PSF

2009 22,485,204 19.8% -522,736 $22.80 Class A 8,203,672 18.4% -142,104 $27.70 Class B 9,643,431 20.0% -208,419 $21.80 Class C 4,638,101 21.5% -172,213 $19.09

2010 22,645,204 20.4% -345,372 $22.38 Class A 8,363,672 17.8% -19,105 $27.21 Class B 9,643,431 20.6% -185,861 $22.28 Class C 4,638,101 24.7% -140,406 $18.74

2011 22,645,204 21.1% -225,487 $22.58 Class A 8,363,672 16.5% 55,712 $26.76 Class B 9,643,431 22.8% -229,612 $22.14 Class C 4,638,101 25.9% -51,597 $18.53

2012 23,753,024 19.3% 211,826 $22.65 Class A 9,059,083 15.0% 68,818 $26.24 Class B 10,055,840 20.9% 88,078 $22.41 Class C 4,638,101 24.1% 54,930 $18.63

2013 23,887,623 19.4% -131,427 $23.45 2nd Qtr. Class A 8,896,344 15.7% -86,646 $27.20 Class B 10,419,178 21.5% 101,394 $22.96 Class C 4,572,101 21.8% 56,613 $19.00

* Data are from Fourth Quarter unless specified.

Source: CB Richard Ellis

B. Evanston Office Market

VSKA analyzed data from FARA Commercial Brokerage, an Evanston-based real estate firm, on the Evanston market as summarized below. Evanston competes with buildings in Skokie, therefore we looked at both communities. Evanston has 2.6 million square feet of rentable space in multi-tenant buildings, of which 15.4% was vacant as of August 2013. The Class A vacancy rate was 13.2%, well below that of Class B and C space (22.6% and 17.3% respectively).

Skokie’s inventory is considerably larger at almost 4 million square feet, but with a higher 19.5% overall vacancy rate. Only 8.0% of Class A space is vacant, but almost one quarter of the Class B and C space is vacant.

Since 2010, Evanston’s total vacancy rate ranged from a low of 13.0% at the end of 2010 to the current high of 15.4%. Skokie’s vacancy rate has been consistently higher ranging from 23.6% in 2010 to the current low of 19.5% as shown in the graph below.

Source: FARA Commercial Brokerage

EVANSTON AND SKOKIE OFFICE MARKET August 2013

Building # of Rentable Direct Total Vacancy Class Buildings Area (SF) Vacant (SF) Vacant (SF) Rate

Evanston Total 57 2,601,939 39,598 401,258 15.4%

Class A 8 1,408,915 180,061 186,061 13.2% Class B 21 447,738 99,410 101,070 22.6% Class C 14 363,801 62,921 62,921 17.3% Unclassified 14 381,485 51,206 51,206 13.4%

Skokie Total 75 3,967,747 767,599 772,132 19.5%

Class A 6 1,375,967 109,689 109,689 8.0% Class B 29 1,939,729 477,988 481,905 24.8% Class C 22 364,041 87,297 28,297 24.0% Unclassified 18 288,010 92,625 93,241 32.4%

Source: FARA Commercial Brokerage.

As of August 2013, the five Evanston buildings with the largest amount of vacant space are all located Downtown. Of these, 1007 Church Street, 500 Davis Street, 1603 Orrington Avenue and 1560 Sherman Avenue are Class A buildings. 960-990 Grove is a Class B building. Prospective tenants are reportedly looking at space that would reduce the vacancy rates shown below.

VACANT SPACE IN SELECTED EVANSTON OFFICE BUILDINGS August 2013

Building Square Feet Vacant Vacancy Rate

1007 Church Street 73,760 48.1% 500 Davis Street 44,361 35.0% 1603 Orrington Avenue 27,528 9.0% 960-990 Grove Street 26,119 56.7% 1560 Sherman Avenue 23,378 6.3%

Source: FARA Commercial Brokerage

South Evanston is not an established office location and there is very little office space other than storefronts and the upper levels of smaller retail buildings. Amli Evanston has 17 live/work spaces in its south building along Chicago Avenue. As of the date of this assessment, none of it has been leased.

Given the current vacancy rates in Evanston and the available space in Downtown Class A buildings, office brokers do not consider the market ready for a new office building in Downtown Evanston or on Main Street. The difficulty the owner of the southeast corner of Main and Chicago had in securing an anchor tenant is indicative of the lack of demand at this time for a new office building in the Study Area.

A small amount of office and service space on the ground and second floors of a primarily residential building will be more marketable. There is evidence of these uses along Chicago Avenue where insurance and other service businesses occupy ground floor space. The current plan for the southeast corner of Main and Chicago includes one floor with approximately 12,000 square feet of office space. This should be marketable to smaller companies, some of which may be tech firms.

V. RETAIL MARKET

A. Retail Inventory

The Existing Conditions Report identified over 120 businesses and organizations located within the Study Area. Of these, 8 are institutional including churches, government buildings and schools. Most of the others are retailers and restaurants, with some offices and service businesses primarily along Chicago Avenue. There is very little vacant space on Main Street with only two storefronts west of the railroad tracks currently vacant. Chicago Avenue has more vacancies including several ground floor spaces not yet leased in the Amli Evanston building. Some space north of Main Street on Chicago Avenue is vacant and has been for many years.

Most of the Study Area businesses are independently owned and have been on Main Street and Chicago Avenue for many years. They have a loyal local following, and some draw customers from a much larger geographic area than South Evanston. These businesses serve nearby residents, contribute to the vibrancy of the area and enhance the city’s tax base. While there is always going to be some turnover, spaces in good physical condition and priced fairly will lease. Newer businesses this year include a toy store, boutique and fitness companies.

Brokers report that it is not that difficult to rent stores in the Study Area, though not all space is in good condition. Some stores on Main Street are narrow and deep, not a desirable configuration for today’s retailers.

CB Richard Ellis reports that as of the second quarter of 2013, the retail vacancy rate in the north suburbs was only 6.8%, down from a high of 9.5% in 2010. This compares favorably to the total suburban Chicago area where the vacancy rate stood at 9.1%. However, net absorption was down in the suburbs overall as well as in the north suburbs. Asking rents in the north suburbs remain high averaging $19.37-21.82 on a triple net or NNN basis. The pro-rata charges to a tenant for common area maintenance, real estate taxes and insurance (known as pass-throughs) can add more than $10 per square foot to the base rent in Evanston. Other suburbs with lower property taxes have lower pass-through expenses, making them more affordable. The table that follows shows the retail real estate trends in the north suburbs and the Chicago suburbs overall.

NORTH SUBURBS & TOTAL SUBURBAN CHICAGO RETAIL MARKET 2009-2013

Location Year- Gross Building Area Vacancy Net Avg. Asking End (SF) Rate Absorption Lease Range/SF

North Suburbs 2009 9,908,367 8.7% 39,633 $14.85-$18.40 2010* 9,658,367 9.5% -305,517 $16.07-$20.41 2011 9,658,367 7.3% 212,484 $14.70-$20.68 2012 9,830,624 6.8% 208,835 $19.34-$25.61 2013** 9,438,018 6.8% -365,909 $19.37-$21.82

Total Suburbs 2009 114,288,873 13.3% -826,858 $16.41-$20.36 2010* 113,334,841 11.8% -215,932 $12.78-$20.41 2011 113,792,157 9.7% 2,778,877 $11.44-$21.62 2012 113,479,510 9.0% 577,726 $11.96-$25.61 2013** 111,410,159 9.1% -1,996,680 $12.22-$21.82

Note: Data from Fourth Quarter unless otherwise noted * 2010 data from Third Quarter, Fourth Quarter not available ** 2013 data from Second Quarter, most recent available

Source: CB Richard Ellis; Valerie S. Kretchmer Associates, Inc.

B. Retail Sales

The table below shows the retail sales by store category for the City of Evanston based on data from the Illinois Department of Revenue over the past three years. Since 2010, total consumer retail sales (excluding agriculture and manufacturers) increased by 5.8% for a total of $861.3 million in 2012. The highest sales volumes by far are in food and general merchandise stores, followed by drugs and miscellaneous retail, and eating and drinking places. All retail categories with the exception of apparel and furniture, household and radio registered sales increases during this period. The recession took a toll on sales in the furniture, household and radio category everywhere. The demand for furniture and home furnishings declines when households are less likely to move, as happened during the recession. Total consumer retail sales averaged $28,264 per Evanston household in 2012, up 1.4% since 2010.

Sales are not broken out for the market area or the Study Area. There are no large stores in the Study Area. The largest big box retailers in the city are on the southwest side on Howard, Oakton and Main Streets. These include Target, Home Depot, Sam’s Club, Food 4 Less, Jewel and Best Buy. Jewel and Whole Foods have stores a few blocks north of Main Street on Chicago Avenue and are the largest retailers proximate to the Study Area. Autobarn, a large car dealer on Chicago Avenue north of Lee Street, generates significant sales and sales taxes for the city. Evanston boasts that it is the dining capital of the North Shore and the sales figures confirm this, as eating and drinking establishments generated $129.5 million in sales in 2012, up 4.7% since 2010.

EVANSTON RETAIL SALES TRENDS 2010-2012

Retail Category 2010 2011 2012 2010‐2012 Change #%

General Merchandise $132,421,835 $124,445,274 $146,123,955 $13,702,120 10.3% Food 203,435,550 208,327,580 216,619,229 $13,183,679 6.5% Drinking and Eating Places 123,724,281 123,959,207 129,522,660 $5,798,379 4.7% Apparel 25,991,843 42,088,279 23,564,099 ($2,427,744) ‐9.3% Furniture. Household & Radio 39,439,167 33,491,486 31,349,071 ($8,090,096) ‐20.5% Lumber, Building, Hardware 53,673,397 54,976,619 57,485,923 $3,812,526 7.1% Automotive & Filling Stations 105,872,916 110,439,031 112,156,508 $6,283,592 5.9% Drugs & Miscellaneous Retail 129,620,208 140,323,435 144,517,848 $14,897,640 11.5% Agriculture & All Others 57,724,420 44,329,314 29,710,292 ($28,014,128) ‐48.5% Manufacturers 9,829,465 11,354,966 11,592,897 $1,763,432 17.9%

Total Retail Sales $881,733,082 $893,735,191 $902,642,482 $20,909,400 2.4% Total Consumer Retail Sales* $814,179,197 $838,050,911 $861,339,293 $47,160,096 5.8%

Total Evanston Households** 30,047 30,475 30,475 428 1.4%

Total Consumer Retail $27,097 $27,500 $28,264 $1,167 4.3% Sales/Household

* Excludes Agriculture and Manufacturers ** Based on Census 2010 and estimate for 2013 from Demographics Now.

Source: Illinois Department of Revenue; Valerie S. Kretchmer Associates, Inc.

C. Sales Potential

It is also useful to look at the retail sales potential of residents of the market area (zip code 60202) compared to the sales potential of the city overall. The table below provides a summary of the store potential by retail category on a per household and aggregate basis. Alteryx, a demographic data vendor, provides estimates of spending power based on an area’s population and income characteristics. The average household spending potential or demand from residents in the market area is very similar to that of the city overall, and for some categories it is slightly higher.

The average South Evanston household has spending power of $26,893, while the average for all Evanston households is $26,625. These figures are slightly lower than the total consumer retail sales per household shown above, meaning that Evanston is attracting more people to shop and dine here than are leaving the city to shop. Alteryx estimates that the aggregate spending power of city residents is $811.4 million, slightly lower than the 2012 consumer sales of $861.3 million.

The only retail category for which Evanston captures a lower share of resident spending power is apparel and accessory stores. These stores are typically based in regional malls and are well represented at Westfield Old Orchard in nearby Skokie. While the city has a number of chain and independently-owned clothing stores, this category tends to be underrepresented in downtown and neighborhood business districts throughout the metro area (not just in Evanston) and are difficult to attract.

C. Retail Opportunities in the Study Area

Retail is likely to be an accessory use in the Study Area occupying all or portions of the ground floor in mixed-use buildings. Asking rents for new retail space are typically more than $25 per square foot on a NNN (triple net) basis where the tenant pays its pro-rata share of real estate taxes, common area maintenance and insurance, which can add another $10+ to the rent. These rents are well above what most independent retailers can afford to pay.

The proposed building at Main and Chicago will have approximately 14,000 square feet of ground floor space as well as dedicated retail parking. Assuming competitive rents, the retail space should be marketable. Brokers indicate that there is demand in the Study Area for service and convenience-oriented retail businesses including a bank, as well as more casual sit-down and fast casual restaurants, and specialty stores. Amli Evanston has leased two of its retail spaces to a coffee and pie shop and a dry cleaner, which is consistent with the type of tenants that are expected to be attracted to the Study Area.

RETAIL DEMAND SUMMARY COMPARISON FOR ZIP CODE 60202 AND CITY OF EVANSTON

Zip Code 60202 City of Evanston 60202 as % of Evans ton

Average Annual Household Dollars 2013 Building Material & Garden Equipment & Supply Dealers $764 $765 99.8% Clothing & Clothing Accessories Stores $1,016 $1,008 100.8% Electronics & Appliance Stores $379 $373 101.7% Food & Beverage Stores $3,558 $3,506 101.5% Foodservice & Drinking Places $2,823 $2,809 100.5% Furniture & Home Furnishings Stores $501 $498 100.6% Gasoline stations $3,399 $3,269 104.0% General Merchandise Stores $2,894 $2,844 101.8% Health & Personal Care Stores $671 $669 100.3% Miscellaneous Store Retailers $476 $474 100.4% Nonstore retailers $1,049 $1,052 99.6% Sporting Goods, Hobby, Book, & Music Stores $318 $321 99.0% Total Average Annual Retail Demand $26,893 $26,625 101.0%

Aggregate Household Dollars 2013 Building Material & Garden Equipment & Supply Dealers $10,483,144 $23,305,259 45.0% Clothing & Clothing Accessories Stores $13,948,631 $30,723,399 45.4% Electronics & Appliance Stores $5,207,082 $11,361,276 45.8% Food & Beverage Stores $48,846,301 $106,844,724 45.7% Foodservice & Drinking Places $38,764,675 $85,593,587 45.3% Furniture & Home Furnishings Stores $6,876,741 $15,166,998 45.3% Gasoline stations $46,661,466 $99,622,775 46.8% General Merchandise Stores $39,728,877 $86,655,694 45.8% Health & Personal Care Stores $9,215,887 $20,397,411 45.2% Miscellaneous Store Retailers $6,536,528 $14,450,934 45.2% Nonstore retailers $14,399,367 $32,073,446 44.9% Sporting Goods, Hobby, Book, & Music Stores $4,363,989 $9,788,137 44.6% Total Aggregate Annual Retail Demand $369,244,568 $811,392,302 45.5%

9575 West Higgins Road, Suite 400 | Rosemont, Illinois 60018 MEMORANDUM TO: Jeffrey Clark p: 847-518-9990 | f: O’Donnell Investments Co.

FROM: Javier Millan Senior Consultant

Luay R. Aboona, PE Principal

DATE: January 16, 2014

SUBJECT: Traffic Impact Study Proposed Mixed-Use Development Evanston, Illinois

This memorandum summarizes the results of a traffic impact study conducted by Kenig, Lindgren, O’Hara, Aboona, Inc. (KLOA, Inc.) in connection with a proposed mixed-use development to be located in Evanston, Illinois. The site, which is currently vacant, is located in the southeast quadrant of the intersection of Chicago Avenue with Main Street. As proposed, the development will contain the following uses:

 112 Apartment units  13,427 square feet of office space  12,064 square feet of retail

In addition, the building will provide underground parking with approximately 74 spaces designated for the resident’s use to be accessed off the public alley and approximately 30 surface parking spaces for the retail/office portion of the development to be also accessed via the public alley. An additional egress only access drive serving the 30 parking spaces will be provided on Chicago Avenue and limited to right turns only.

The purpose of this study was to examine background traffic conditions, assess the impact that the proposed development will have on traffic conditions in the area, and determine if any road or access improvements are necessary to accommodate the traffic generated by the development.

The sections of this report present the following.

 Existing conditions  A description of the proposed development  Directional distribution of the development generated traffic  Vehicle trip generation for the proposed development  Future traffic conditions including access to the site  Traffic analyses for the weekday morning, weekday evening and Saturday midday peak hours  Recommendations with respect to adequacy of the site access system and adjacent roadway network

KLOA, Inc. Transportation and Parking Planning Consultants

Existing Conditions

Existing transportation conditions in the vicinity of the site were documented based on a field visit conducted by KLOA, Inc. in order to obtain a database for projecting future conditions. The following provides a description of the geographical location of the site, physical characteristics of the area roadway system including lane usage and traffic control devices, an inventory of the alternative modes of transportation serving the area and existing peak hour vehicle, pedestrian and bicycle volumes.

Site Location

The site, which is currently vacant, is located in the southeast quadrant of the signalized intersection of Chicago Avenue with Main Street. Land-uses in the area consist of commercial and residential uses located north and south of the site along Chicago Avenue and residential neighborhoods located east of the site. The Chicago Transit Authority (CTA) Purple Line station and the Metra Union Pacific North station are located west of the site. Figure 1 shows an aerial photo of the site.

Area Roadways

The principal roads in the study area are described in the following paragraphs and shown in Figure 2.

Chicago Avenue is generally a north-south, arterial roadway. In the study area, Chicago Avenue has one lane in each direction with metered parking on both sides of the road. There are five on-street parking spaces on the west side of Chicago Avenue immediately south of Main Street. These parking spaces are metered and signed for 20 minute limit and are mostly used by motorists and taxi cabs picking up and dropping off commuters. Separate left-turn lanes are provided on Chicago Avenue at its signalized intersection with Main Street. A separate right-turn lane is provided on the north approach of Chicago Avenue at its signalized intersection with Main Street. Chicago Avenue is under the jurisdiction of the City of Evanston and has a posted speed limit of 30 mph.

Main Street is an east-west, collector road in the vicinity of the site. In the study area, Main Street has one-lane in each direction with metered parking on both sides of the road. At its signalized intersection with Chicago Avenue, Main Street is wide enough on the west approach to provide a combined through/left-turn lane and an exclusive right-turn lane. Main Street is under the jurisdiction of the City of Evanston and has a posted speed limit of 25 mph.

Kedzie Street is an east-west local road that generally provides one lane in each direction with on-street parking provided on both sides of the road. Kedzie Street is under traffic signal control at its intersection with Chicago Avenue and is under the jurisdiction of the City of Evanston.

Site Location Figure 1

SITE

Area Roadway System Figure 2

Hinman Avenue is a north-south local road that generally provides one lane in each direction with on-street parking provided on both sides of the street. The intersection of Hinman Avenue with Main Street is under traffic signal control. Hinman Avenue is under the jurisdiction of the City of Evanston.

Washington Street is an east-west local road that allows two-way traffic between Chicago Avenue and Custer Avenue. At its unsignalized intersection with Chicago Avenue, Washington Street is under stop sign control. Washington Street is under the jurisdiction of the City of Evanston.

Public Transportation

The area is served by several modes of public transportation including Metra commuter rail, CTA rapid transit service and two bus lines. The following summarizes the rail lines providing service to the area:

 The Metra Union Pacific/North Line (UP-N) has a local stop at Chicago Avenue and Main Street which is located on the west side of Chicago Avenue. This line provides daily service between Ogilvie Transportation Center in Chicago and Kenosha, Wisconsin.

 The CTA Purple Transit Line has a local stop on Chicago Avenue between Main Street and Washington Street. This line provides daily service between the Linden Station in Wilmette and the Howard Station on the border of Chicago and Evanston. In addition, weekday peak period peak express service is provided between the Howard Station and the downtown Chicago Loop.

In addition, the following bus routes serve the immediate area and all have stops adjacent to the site:

 Route Number 205 Chicago/Golf generally runs along Chicago Avenue and Gold Road between the Howard Street rapid transit station and the Cook County Courthouse in Skokie. Service is provided Monday through Friday.

 Route N201 Central/Sherman (Night Bus) generally runs along Chicago Avenue and Sherman Avenue between the Howard Street rapid transit station and Central Street. Service is provided during overnight hours only.

Non-Motorized Modes of Transportation

The site is served by the following non-motorized modes of transportation.

Bicycle Routes. According to the City of Evanston, Chicago Avenue is a designated bike route within the vicinity of the site.

Pedestrian Facilities. All of the roads within the immediate area generally have sidewalks on both sides of the street. Crosswalks and pedestrian traffic signals are provided at the Chicago Avenue/Main Street and Chicago Avenue/Kedzie Street intersection as well as at the Main Street/Hinman Avenue intersection. Crosswalks are provided on the west leg of the Washington Street unsignalized intersection with Chicago Avenue.

Existing Traffic Volumes

In order to determine current traffic conditions in the vicinity of the site, KLOA, Inc. conducted peak period vehicle, pedestrian and bicycle counts at the following intersections.

 Chicago Avenue with Main Street  Chicago Avenue with Washington Street  Chicago Avenue with Kedzie Street  Main Street with Hinman Avenue  Main Street with the public alley  Kedzie Street with the public alley

The traffic counts were conducted on Thursday December 13, 2012 during the morning (7:00 A.M. to 9:00 A.M.) and evening (4:00 P.M. to 6:00 P.M.) peak periods and on Saturday, December 15, 2012 during the midday (12:00 to 2:00 P.M.) peak period. It should be noted that the intersections of Main Street with the public alley was recounted at the same time the intersection of Kedzie Street and the public alley on Saturday November 2 and Wednesday November 6, 2013 during the same time periods. Based on the results of the traffic counts, the weekday morning peak hour of traffic occurs from 7:45 to 8:45 A.M., the weekday evening peak hour of traffic occurs from 5:00 to 6:00 P.M. and Saturday midday peak hour occurs from 12:45 to 1:45 P.M. Figure 3 illustrates the existing peak hour traffic volumes and Figure 4 illustrates the existing pedestrian and bicycle volumes.

Area Traffic and On-Street Parking Utilization Observations

Traffic on area roadways including the alley as well as on-street parking utilization in the area was observed during the peak periods. Below is a summary of our observations.

 Northbound traffic on Chicago Avenue consistently backed-up at Main Street for approximately 175 feet during all three peak periods. However, it was also observed that these queues cleared with every cycle.

 Southbound traffic on Chicago Avenue during the P.M. peak period consistently backed up from Kedzie Street to Main Street and on few occasions the queue did not clear. This is due to the long green time Kedzie Street is allocated.

 Twice during the P.M. peak period, bus dropping off passengers blocked southbound traffic for approximately 35 seconds.

6 PROJECT: WASHINGTON STREET 169 (145) [138] Proposed Mixed-Use 70 (156) [112] 81 (87) [106] Evanston, Illinois 23 (33) [35] 21 (13) [21] Development

56 (70) [92] 346 (772) [564] 287 (608) [454] 19 (25) [25] 26 (33) [28] 10 (61) [81] 349 (772) [557] CHICAGO AVENUE 14 (7) [15] 674 (449) [593] 111 (91) [121] 34 (50) [51] 76 (49) [53]

736 (491) [631] 11 (33) [16] 165 (149) [141] 69 (50) [64] 21 (34) [47] 611 (390) [496] 35 (23) [35] MAIN STREET SITE TITLE: STREET KEDZIE 192 (205) [225] 37 (47) [63] 15 (10) [24] 7 (14) [5] 4 (3) [3] Existing Traffic Volumes 8 (1) [9] 7

16 (14) [11] 15 (10) [13] 1 (1) [0] 0 (0) [0] 2 (3) [2] 5 (3) [3]

[00] ALLEY (00) 10 (6) [8]

00 15 (6) [8] 3 (1) [0] 0 (4) [5] 220 (216) [200] 3 (0) [0] 6 (10) [12] 4 (2) [0] 81 (80) [85] 2 (7) [4] 3 (1) [1] 4 (3) [1] - AM PEAK HOUR (7:45-8:45 AM) - PM PEAK HOUR (5:00-6:00 PM) - SATURDAY PEAK HOUR (12:45-1:45 PM) 118 (149) [152] 58 (50) [47] 25 (12) [30] LEGEND

24 (35) [39] 21 (162) [48] Job No: 12-193 8 (13) [10]

HINMAN AVENUE

52 (27) [33] NOT TO SCALE 95 (35) [32] 6 (14) [14] 150 (168) [145] 16 (14) [10] 12 (8) [11] N Figure: 3 N

NOT TO SCALE

7 (10 [3] 1 (4) [11] 3 (12) [2]

86 (123) [92] 93 (103) [150] 66 (95) [53] MAIN STREET 6 (2) [0] 4 (0) [0] 7 (8) [21] 7 (21) [40] 2 (3) [0] 23 (44) [24] 47 (54 [54] 89 (98) [86] 80 (77) [79] 2 (3) [0] 167 (113) [76] 124 (104) [174] 111 (117) [76]

8 (4) [2] 1 (6) [8] 12 (3) [1] SITE ALLEY

6 (9) [3] HINMAN AVENUE

16 (9) [23]

WASHINGTON

1 (0) [0] STREET 56 (41) [29] 10 (9) [7]

10 (4) [2]

5 (10) [2] 0 (2) [11] 42 (71) [21] 49 (45) [38]

KEDZIE STREET 4 (7) [5] 13 (2) [5] 2 (0) [1] 9 (16) [33] 16 (17) [13] 28 (33) [13]

7 (5) [2] 2 (1) [6] LEGEND 00 - AM PEAK HOUR (7:45-8:45 AM) (00) - PM PEAK HOUR (5:00-6:00 PM) [00] - SATURDAY PEAK HOUR (12:45-1:45 PM) 00 (00) - PEDESTRIAN VOLUME AVENUE CHICAGO 00 (00) - BICYCLE VOLUME PROJECT: TITLE: Proposed Mixed-Use Development Existing Pedestrian and Bicycle Job No: 12-193 Evanston, Illinois Figure: 4

 The five on-street parking spaces on the west side of Chicago Avenue south of Main Street were underutilized with extended periods of time where they were not occupied.

 It was observed that the southernmost parking space (closest to the station) was occupied during the peak periods by taxi cabs.

 Westbound traffic on Main Street, on average, backed up for approximately 175 feet and in some instances (four times during the A.M. peak period, three times during the P.M. peak period and twice during the Saturday midday peak period) the queue did not clear in one cycle.

 No backups of traffic on Kedzie Street were observed in either direction that would block the alley.

 Traffic on the alley was observed to be low ranging from 19 to 35 two-way trips during the peak hour.

 North of Main Street, the alley traffic is slightly higher ranging between 34 and 55 two-way trips during the peak hour.

 Minimal amount of truck traffic was observed entering and exiting the alley during the peak periods.

 Four single unit trucks were observed entering and exiting the alley at Main Street during the morning and evening peak periods.

 Three single-unit trucks were observed entering and exiting the alley at Kedzie Street during the morning peak hour. No trucks were observed during the evening peak period.

 No multi-unit trucks were observed entering or exiting the alley during the peak periods

 The average queue of vehicles waiting to exit the alley onto Main Street or Kedzie Street was one vehicle. These observed vehicles waited for less than 15 seconds to exit the alley.

 The sight distance for vehicles exiting the alley onto Kedzie Street is limited due to the proximity of on-street parking to the alley.

 The alley appears to be wide enough to allow for two-way traffic as well as for a passenger vehicle to move around a parked truck.

 No trucks were observed parked in the alley during the traffic counts.

Traffic Characteristics of the Proposed Development

In order to properly evaluate future traffic conditions in the surrounding area, it was necessary to determine the traffic characteristics of the proposed development including the directional distribution and volumes of traffic that it will generate.

Proposed Development Plan

As proposed, the development will contain the following uses:

 112 Apartment units  13,427 square feet of office space  12,064 square feet of retail

Underground parking with approximately 74 spaces designated for the resident’s use with access off the alley will be provided. In addition approximately 30 surface parking spaces for the retail/office portion of the development will be provided that will also be accessed via the public alley. An additional egress only access drive serving the 30 parking spaces will be provided on Chicago Avenue and limited to right-turns only. The access drive off Chicago Avenue will be approximately 155 feet south of Chicago Avenue stop bar at its intersection with Main Street. A double berth loading dock accommodating single-unit trucks will be provided along the east side of the proposed building. All trucks will enter and exit the site via the north-south alley east of the site.

Site Traffic Generation

The peak hour traffic volumes that will be generated by proposed development were estimated based on trip generation rates provided in the Institute of Transportation Engineers (ITE) Trip Generation Manual, 9th Edition. However, the trip rates are based on suburban rates where the primary mode of transportation is the automobile. The dense, urban nature of the neighborhood together with the various alternative modes of transportation described previously results in heavy pedestrian activity in the area. It is expected that the proposed development will capture a large portion of its customers from this pedestrian activity, including the area residents. As such and based on statistical data from the 2010 Census Bureau, the number of vehicle trips that will be generated by the proposed development was reduced by 40 percent to account for the pedestrian activity and the alternative modes of transportation. Table 1 shows the estimated peak hour traffic to be generated by the proposed development.

Table 1 PROJECTED SITE-GENERATED TRAFFIC VOLUMES Weekday Weekday Saturday Morning Evening Midday Peak Hour Peak Hour Peak Hour ITE Land Use Code Land-Use/Size In Out In Out In Out 220 112 Apartments 11 44 49 26 30 25

40 percent reduction -4 -18 -20 -10 -12 -10

Sub Total 7 26 29 16 18 15 710 Office (13,427 s.f.) 18 2 3 16 3 2

826 Retail (12,064 s.f.) 5 5 16 23 30 28 40 percent reduction -9 -3 -8 -16 -13 -12

Sub Total 14 4 11 23 20 18

Total 21 30 40 39 38 33

Directional Distribution of Site Traffic

The directions from which the development-generated traffic will approach and depart the site were estimated based on the existing travel patterns as determined from the traffic counts. Figure 5 illustrates the directional distribution for the development.

Projected Traffic Volumes

The estimated peak hour traffic volumes that will be generated by the proposed development were assigned to the roadway system in accordance with the previously described directional distribution. Figure 6 illustrates the development generated traffic volumes. To account for other growth in the area, the existing traffic volumes were increased by five percent and the traffic to be generated by the Amli mixed-use development and the proposed Trader Joe’s grocery store was included. Figure 7 shows the total peak hour volumes which include the existing traffic volumes increased by five percent, the development-generated traffic volumes and the traffic to be generated by the Amli mixed-use development and the Trader Joe’s grocery store.

11 20% N

NOT TO SCALE

15% MAIN STREET 20%

SITE ALLEY HINMAN AVENUE

WASHINGTON STREET 1%

4% KEDZIE STREET 40%

LEGEND AVENUE CHICAGO 00% - DIRECTIONAL DISTRIBUTION PROJECT: TITLE: Proposed Mixed-Use Development Estimated Directional Distribution Job No: 12-193 Evanston, Illinois Figure: 5

12 N

NOT TO SCALE

1 (6) [3] 5 (3) [3] 6 (4) [3] 3 (6) [6] 3 (6) [6] MAIN STREET 5 (8) [7] 5 (8) [8] 1 (3) [2] 9 (16) [15] 1 (3) [2] 1 (2) [2] 11 (7) [6] 4 (5) [5] 2 (5) [4] SITE

4 (10) [8] 4 (16) [10] 8 (6) [11]

- (3) [3] - (10) [7] ALLEY 6 (5) [9] 15 (9) [8] HINMAN AVENUE - (10) [7] 4 (16) [10]

WASHINGTON 15 (9) [8] STREET 11 (7) [7] 6 (5) [9] 3 (13) [8] 1 (2) [2] 10 (15) [12] 10 (15) [12] KEDZIE - (2) [2] STREET 9 (16) [15] 9 (16) [15]

LEGEND 00 - AM PEAK HOUR (7:45-8:45 AM) (00) - PM PEAK HOUR (5:00-6:00 PM) AVENUE CHICAGO [00] - SATURDAY PEAK HOUR (12:45-1:45 PM) PROJECT: TITLE: Proposed Mixed-Use Development Site Traffic Assignment Job No: 12-193 Evanston, Illinois Figure: 6

13 N

NOT TO SCALE

77 (56) [70] 6 (10) 12] 17 (15) [11] 8 (14) [11] 22 (170) [50] 25 (37) [41] 15 (72) [92] 317 (667) [496] 59 (74) [97] 5 (3) [3] 0 (0) [0] 179 (160) [151] 15 (10) [13] 231 (228) [211] 155 (183) [158] 11 (35) [17] 3 (10) [11] 6 (15) [15] MAIN STREET

85 (91) [111] 15 (10) [24] 26 (13) [31] 182 (160) [153] 212 (230) [250] 138 (176) [179] 83 (181) [130] 16 (30) [20] 61 (52) [49] 3 (1) [0] 8 (8) [6] 13 (8) [12] 21 (13) [14] 130 (113) [141] 60 (28) [35] 46 (38) [49] 100 (37) [34]

656 (430) [536] SITE 411 (883) [643] 4 (10) [8] ALLEY 828 (571) [718] HINMAN AVENUE 391 (857) [617] 20 (26) [26]

WASHINGTON STREET 22 (14) [22] 24 (36) [38] 16 (8) [17] 806 (557) [696] 30 (43) [33] 385 (850) [622] 2 (9) [6] 3 (5) [4] 1 (1) [0] 88 (56) [61] 26 (29) [23] 89 (85) [91] 50 (62) [64] 4 (2) [0] KEDZIE STREET 17 (17) [24] 33 (59) [67] 4 (23) [10] 3 (1) [1] 3 (0) [0] 23 (13) [17] 24 (56) [68] LEGEND 734 (509) [652] 00 - AM PEAK HOUR (7:45-8:45 AM) (00) - PM PEAK HOUR (5:00-6:00 PM) AVENUE CHICAGO [00] - SATURDAY PEAK HOUR (12:45-1:45 PM) PROJECT: TITLE: Proposed Mixed-Use Development Total Traffic Volumes Job No: 12-193 Evanston, Illinois Figure: 7

Traffic Analysis

Traffic analyses were performed for the intersections within the study area to determine the operation of the existing street system, evaluate the impact of the proposed development, and determine the ability of the existing street system to accommodate projected traffic demands. Analyses were performed for the existing and the projected traffic volumes.

The traffic analyses were performed using Synchro 8 computer software, which is based on the methodologies outlined in the Transportation Research Board’s Highway Capacity Manual (HCM), 2010. The ability of an intersection to accommodate traffic flow is expressed in terms of level of service, which is assigned a letter grade from A to F based on the average control delay experienced by vehicles passing through the intersection. Control delay is that portion of the total delay attributed to the traffic signal or stop sign control operation and includes initial deceleration delay, queue move-up time, stopped delay, and final acceleration delay. Level of Service A is the highest grade (best traffic flow and least delay), Level of Service E represents saturated or at-capacity conditions, and Level of Service F is the lowest grade (oversaturated conditions, extensive delays). For two-way stop controlled (TWSC) intersections, levels of service are only calculated for the approaches controlled by a stop sign (not for the intersection as a whole).

The Highway Capacity Manual definitions for levels of service and the corresponding control delay for signalized intersections and unsignalized intersections are shown in the Appendix. The results of the capacity analysis are summarized in Table 2 and Table 3.

Table 2 CAPACITY ANALYSIS RESULTS—EXISTING TRAFFIC CONDITIONS Weekday A.M. Weekday P.M. Saturday Midday Peak Hour Peak Hour Peak Hour Intersection LOS Delay LOS Delay LOS Delay Chicago/Main1 C 24.2 C 24.6 C 21.9

Chicago/Kedzie1 B 12.0 B 15.5 B 12.6

Main/Hinman1 A 9.7 B 10.7 A 9.0

Chicago/Washington2 C 17.7 C 20.2 C 16.0

Main/Alley2 B 14.9 B 13.8 C 19.6

Kedzie/Alley2 A 9.5 A 9.4 A 9.3 LOS = Level of Service Delay = Seconds 1. Signalized Intersection 2. Unsignalized Intersection

Table 3 CAPACITY ANALYSIS RESULTS—FUTURE TRAFFIC CONDITIONS Weekday A.M. Weekday P.M. Saturday Midday Peak Hour Peak Hour Peak Hour Intersection LOS Delay LOS Delay LOS Delay Chicago/Main1 C 25.3 C 26.5 C 23.2 Chicago/Kedzie1 B 13.3 B 19.9 B 14.5 Main/Hinman1 B 10.0 B 10.4 A 9.3 Chicago/Washington2 C 20.4 C 23.8 C 18.3 Main/Alley2 C 15.6 B 14.1 C 19.1 Kedzie/Alley2 A 9.6 A 9.6 A 9.5 Chicago/Access Drive2 C 15.4 B 11.9 B 13.5 LOS = Level of Service Delay = Seconds 1. Signalized Intersection 2. Unsignalized Intersection

Traffic Evaluation

The results of the capacity analyses show that all of the studied intersections are currently operating at acceptable levels of service. Below is a discussion of each external intersection and the recommended improvements, if any, to accommodate future traffic volumes.

Chicago Avenue and Main Street

The intersection of Chicago Avenue and Main Street currently operates at an acceptable level of service and will continue to do so under future conditions. However, based on our observations, northbound and westbound traffic at the intersection of Chicago Avenue with Main Street experience long queues during the weekday A.M. and P.M. peak periods. In order to mitigate these conditions, the following improvements are recommended.

 Remove the existing four on-street parking spaces on the east side of Chicago Avenue south of Main Street to improve sight lines and to stripe a dedicated northbound to eastbound exclusive right-turn lane similar to the one provided on the north approach.

 Monitor traffic conditions in the future to determine if adjustments to the signal timings are needed to improve the traffic flow through the intersection.

Chicago Avenue and Kedzie Street

This intersection operates at an acceptable level of service under existing conditions and will continue to do so under future conditions. As such, no signal timing or geometric improvements are necessary.

Main Street and Hinman Avenue

This intersection operates and will continue operating at acceptable levels of service under future conditions. As such, no signal timing or geometric improvements are necessary.

Chicago Avenue and Washington Street

This intersection operates and will continue operating at acceptable levels of service under future conditions. As such, no geometric improvements are necessary.

Main Street and Public Alley

The intersection operates and will continue operating at acceptable levels of service under future conditions. Based on the results of the capacity analyses, the overall delay for northbound traffic on the alley will increase by one second or less, indicating that the proposed development will have a limited impact on the intersection. As such, no geometric improvements are necessary. In order to improve the sight distance for exiting vehicles from the alley, the northeast corner of the building has been set back.

Kedzie Street and Public Alley

The intersection currently operates at an acceptable level of service and will continue to do so under future conditions with the additional traffic. However, in order to improve the sight distance for exiting movements from the alley, it is recommended that one parking space on the north side of Kedzie Street immediately west of the alley be eliminated.

Site Access

As previously indicated, access to the development is proposed to be provided via one right-out only access drive on Chicago Avenue serving the retail/office portion of the development and via two access drives off the alley. One of the access drives off the alley will also serve the retail/office portion of the development while the other will only provide accessibility to the apartment units. Below is a discussion of each access drive.

Residential Access Drive

The access drive will be located approximately 155 feet south of Main Street and will allow full ingress/egress movements. The access drive will provide one inbound lane and one outbound lane with outbound movements under stop sign control.

Retail/Office Access Drive

The access drive on Chicago Avenue is proposed to only allow right-turn movements out of the site and will be located approximately 155 feet south of Chicago Avenue’s stop bar at its intersection with Main Street. In order to enforce this restriction, signs should be placed inside the garage indicating that left-turns are not allowed. Furthermore, “Do Not Enter” signs should be placed on the garage drive facing west. Visual warning devices should also be provided to alert pedestrians of traffic exiting the garage.

The access drive off the alley serving the retail/office portion of the development will be located north of the residential access drive and will allow full ingress/egress movements. The access drive will provide one inbound lane and one outbound lane with outbound movements under stop sign control.

Based on a review of the projected traffic volumes and the results of the capacity analyses, the limited amount of traffic to be generated by the proposed mixed-use development will have a minimal impact on the traffic operations of the alley based on the following:

 The alley will experience, at a maximum, one additional vehicle every two minutes.

 The amount and type of traffic anticipated to travel along the alley is similar and in line with the existing traffic entering and exiting the alley from either end.

The results of the capacity analyses indicate that the increase in average delays that will be experienced by traffic exiting the alley will be minimal.

Loading Area

A double berth loading dock accommodating single-unit trucks will be provided along the east side of the proposed building. All trucks will enter and exit the site via the public alley east of the site. A review of the site plan indicates that the loading dock will be recessed from the alley thus accommodating delivery vehicles without blocking the alley. Based on truck turning diagrams (enclosed in the Appendix), a single-unit truck will be able to maneuver in and out of the loading dock without blocking the alley. This design will ensure that the alley will be open to traffic at all times and will therefore minimize the impact on area traffic.

Conclusion

Based on the preceding analyses and recommendations, the following conclusions have been made.

 Accessibility to and from the area is enhanced by the various alternative modes of transportation serving the area. The area is served by the CTA Purple rapid transit line, the Metra Union Pacific/North Line (UP-N) and two bus lines. Furthermore, Chicago Avenue is a designated bike routes within the vicinity of the site.

 The amount of new traffic generated by the proposed development will be reduced due to its proximity to the alternative modes of transportation serving the area.

 The development-generated traffic can be accommodated efficiently without significant impact to the external roadway system. All of the intersections within the study limits are projected to operate at acceptable levels of service with the addition of the development generated traffic and recommended improvements/modifications.

 The proposed site access system will adequately to serve the traffic that will be generated by the proposed development.

 The public alley east of the site will be able to accommodate the limited traffic that will be generated by the proposed mixed-use development traffic with minimal impact to traffic conditions along the alley.

 The ability to provide access on the alley will reduce the traffic impact on Chicago Avenue as well as minimize traffic conflicts with the pedestrians.

 The removal of a parking space on the north side of Kedzie Street west of the alley will improve the available sight lines for traffic exiting the alley.

 The outbound movements from the access drive on Chicago Avenue will be under stop sign control and will be limited via signage to right-out only.  Visual warning devices should be posted at the access drive off Chicago Avenue to alert pedestrians of traffic exiting the access drives.

12-193 Clark Mixed-Use Development in Evanston January 16 2014 jm lra

Appendix

LEVEL OF SERVICE CRITERIA Signalized Intersections Average Control Level of Delay Service Interpretation (seconds per vehicle) A Favorable progression. Most vehicles arrive during the green indication and travel through the intersection 10 without stopping.

B Good progression, with more vehicles stopping than for Level of Service A. >10 - 20

C Individual cycle failures (i.e., one or more queued vehicles are not able to depart as a result of insufficient capacity during the cycle) may begin to appear. >20 - 35 Number of vehicles stopping is significant, although many vehicles still pass through the intersection without stopping.

D The volume-to-capacity ratio is high and either progression is ineffective or the cycle length is too long. >35 - 55 Many vehicles stop and individual cycle failures are noticeable.

E Progression is unfavorable. The volume-to-capacity ratio is high and the cycle length is long. Individual cycle >55 - 80 failures are frequent.

F The volume-to-capacity ratio is very high, progression is very poor and the cycle length is long. Most cycles fail to >80.0 clear the queue. Unsignalized Intersections Level of Service Average Total Delay (SEC/VEH) A 0 - 10

B > 10 - 15

C > 15 - 25

D > 25 - 35

E > 35 - 50

F > 50 Source: Highway Capacity Manual, 2010.

3 STORY MIXED-USE BUILDING N

MA NOT TO SCALE IN STR EET

1-STORY RETAIL

BUILDING 186. 00' K

L "

A 0

- RETAIL '

W 4

E ENTRANCE 1

I RETAIL S

ENTRANCE " 6 - '

RETAIL 5 EGRESS ENTRANCE

PROPOSED 9-STORY MIXED-USE CONSTRUCTION TYPE 1B

30,500 SF 7 STORY

E RETAIL TOTAL SITE AREA MIXED-USE BUILDING ENTRANCE U C-1A N E V Y E A L

' 8

RETAIL A 6 . LOADING

9 ENTRANCE

7 DOCK O 1 LOADING (2) 10' X 25'

G LOBBY DOCK LOADING SPACES

ENTRANCEY A ' 5 OFFICE/RESIDENTIAL E C 1 . I L ENTRANCE EGRESS 3 5 1 L H A C

15 RESIDENTIAL PARKING SHORT-TERM VEHICLE SPACES RETAIL/RESIDENTIAL ENTRANCE/EXIT INCLUDES 1 ACC. SPACE FROM ALLEY PARKING ENTRANCE

SHORT-TERM RETAIL PARKING EXIT (RIGHT 15 RETAIL PARKING SPACES VEHICLE EXIT TO INCLUDES 1 ACC. SPACE CHICAGO AVE. TURN ONLY) 10'-0" RIGHT TURN ONLY

3 STORY RESIDENTIAL BUILDING 4'-0" R-6 SIDEWALK VEHICLE RESIDENTIAL RAMP DOWN ACCESS TO MECH. PARKING 15% MAX SLOPE BELOW-GRADE ENTRANCE RESIDENTIAL PARKING BICYCLE PARKING 12'-1" BIKE PARKING FOR 15% OF BLDG OCCUPANTS PER 'MAIN STREET' LEED REQ.S CTA STATION

182.94'

2 STORY COMMERCIAL BUILDING

1 16"=1'-0" TEXT STYLE ARIAL-TITLE 1'-6" LEADER @ 2'-0" CLOSED FILLED WITH PARAGRAPH TEXT ARIAL-TITLE

PROJECT: TITLE: Proposed Mixed-Use Development Single-Unit Turning Diagram Job No: 12-193

Evanston, Illinois Figure: A 3 STORY MIXED-USE BUILDING N

MA NOT TO SCALE IN STR EET

1-STORY RETAIL

BUILDING 186. 00' K

L "

A 0

- RETAIL '

W 4

E ENTRANCE 1

I RETAIL S

ENTRANCE " 6 - '

RETAIL 5 EGRESS ENTRANCE

PROPOSED 9-STORY MIXED-USE CONSTRUCTION TYPE 1B

30,500 SF 7 STORY

E RETAIL TOTAL SITE AREA MIXED-USE BUILDING ENTRANCE U C-1A N E V Y E A L

' 8

RETAIL A 6 . LOADING

9 ENTRANCE

7 DOCK O 1 LOADING (2) 10' X 25'

G LOBBY DOCK LOADING SPACES

ENTRANCEY A ' 5 OFFICE/RESIDENTIAL E C 1 . I L ENTRANCE EGRESS 3 5 1 L H A C

15 RESIDENTIAL PARKING SHORT-TERM VEHICLE SPACES RETAIL/RESIDENTIAL ENTRANCE/EXIT INCLUDES 1 ACC. SPACE FROM ALLEY PARKING ENTRANCE

SHORT-TERM RETAIL PARKING EXIT (RIGHT 15 RETAIL PARKING SPACES VEHICLE EXIT TO INCLUDES 1 ACC. SPACE CHICAGO AVE. TURN ONLY) 10'-0" RIGHT TURN ONLY

182.94'

2 STORY COMMERCIAL BUILDING

1 16"=1'-0" TEXT STYLE ARIAL-TITLE 1'-6" LEADER @ 2'-0" CLOSED FILLED WITH PARAGRAPH TEXT ARIAL-TITLE

PROJECT: TITLE: Proposed Mixed-Use Development Single-Unit Turning Diagram Job No: 12-193

Evanston, Illinois Figure: B

Sources of funds Equity % of total cost Developer equity $ 3,500,000.00 7.64% Other Equity $ 10,500,000.00 22.92% Total Equity $ 14,000,000.00 30.56% Loans Construction Financing $ 28,824,259.64 62.93% Permanent Financing N/A Gov’t Assistance $ 2,980,000.00 6.51% Other Funding ( ) N/A Total Sources of funds $ 45,804,259.64 100.00% Uses of Funds $ per S.F. of total building area Land Acquisition $ 3,525,000.00 $ 18.39 Demolition $ - $ - Site preparation $ - $ - Soft Costs/Fees (incl Finance) $ 6,120,919.90 $ 31.93 Soft Cost Contingency $ 249,400.54 $ 1.30 Hard Construction Costs (incl Site Prep) $ 35,908,939.19 $ 187.35 Revenue Projections Year 1 Year 2 Commercial Rent (S.F. & Rent / S.F.) 25,663 $ 11.93 25,663 $ 24.99 Commercial Rent ($) $ 306,276.67 $ 641,303.93 Expense Recovery $ - $ - Residential Rent $ 1,959,551.43 $ 3,203,587 Parking & Misc Revenue $ 262,147.45 $ 403,052 Other Revenue Incl Above Incl Above GROSS POTENTIAL INCOME $ 2,527,975.55 $ 4,247,942 Residential vacancy % 5.00% 5.00% Commercial vacancy % 0.00% 0.00% EFFECTIVE GROSS INCOME $ 2,411,647.66 $ 4,059,549.45 EXPENSES Year 1 Year 2 Maintenance & Repairs $ 22,945.65 $ 26,475.75 Real Estate Taxes $ 322,666.83 $ 372,307.88 Insurance $ 22,945.65 $ 26,475.75 Management fees $ 72,832.88 $ 84,037.94 Professional Fees (Marketing, Admin, Payroll) $ 219,240.22 $ 252,969.49 Other (Utilities & Contract) $ 178,597.87 $ 206,074.46 Other ( ) $ - TOTAL EXPENSES: $ 839,229.10 $ 968,341.27 NET OPERATING INCOME: $ 1,572,418.56 $ 3,091,208.19 CAPITAL EXPENSES Capital Expenses (Tenant Improvements, Incl in Development Budget, Reserve Incl in Development Budget, Reserve reserve, commissions) Begin Yr. 4 Begin Yr. 4 Debt Service $ 1,033,142.74 $ 1,418,062.18 NET CASH FLOW: $ 539,275.82 $ 1,673,146.00