2019 False or Misleading Economic Information

The following two emails to the Council and the City manager point out the false figures touted by NU, the Chamber of Commerce and Mayor Hagerty.

November 8, 2019

To the Council:

Esteemed Alderwomen, Aldermen, Mayor and City Manager,

Please see how the economic figures that Northwestern University, the Chamber of Commerce and Mayor Hagerty have broadcasted over the last several months compare to the latest NU projection, presented to the public for the first time on October 28^th. Also see how even these latest, and far reduced figures, are also incorrect and should be reduced to reflect NU’s and the Chamber’s statements regarding new temporary events and visitors to Evanston.

Summer 2019 – NU flyer for community meetings at Welsh Ryan Arena

How would the City of Evanston benefit from this proposal?

· Northwestern pays an athletics event tax of 12%. It is the highest athletic ticket tax in the country. Last year, the University’s athletics event tax payment to the City of Evanston was $1,468,758.69.

· Additional events at Welsh-Ryan Arena could generate $300,000 - $600,000 in new revenues. These new revenues would help the City pay for public services and invest in critical infrastructure.

Aug 8^th Plan Commission meeting (transcription of the video)

Poliski: ... And then one last comment, you talked about ticket tax and amusement tax. There is a difference, and I think I misspoke at the last time I was with the neighbors, just simply because we’ve never really had an amusement tax before. We pay a ticket tax for all our athletic events of 12% and that is the largest ticket tax in the country. Our amusement tax as it sits today is structured at 4%.

Poliski: I have some really rough numbers, and it’s been kind of a little bit of a running joke, that they don’t understand, the neighbors are confused why I can’t give them specifics. There’s a big difference between Paul McCartney coming and Eddie Vedder coming or if we have an up-and-coming country act as far as the amount of seats we would sell and the tickets we can charge. But just as an example: if we were to, unless we want to go out and we were able to secure, which I have no idea if we’re going to be able to secure substantial types of acts, initially, it might be a little bit of a process but we obviously have only, having two years to prove ourselves. But let’s say Paul McCartney comes and we have 6000 people that come in, because that’s the capacity with the stage and such, and the average ticket price is $100, so that’s $600,000 that’s coming in, and let’s say that we agree on an amendment on the amusement tax. For simplicity we’ll say that’s 10%, so there’s $60,000 that comes in just for in that. Multiply that by 6 events, hopefully in a similar way, you’re coming in close to $400,000. That’s not including any ancillary taxes that we hope also as part of this such as the liquor ability to sell within those events, and then, finally, it’s impossible to quantify the benefit to the City when you have some really good acts coming, and hopefully we’re bringing in thousands of people during the course of these shows that haven’t been to Evanston before, and they enjoy some restaurants and they maybe be staying at the hotel and they do a variety of other things. So, some of that is very hard to determine.

Poliski: We ask for this six additional events annually plus one multi event which has been causing a little bit of confusion. Actually, the impetus was, is, that the national tennis league had approached us a while back, maybe it was in December of last year, asking if they can have a Chicago area team that would play seven events during a league, so those would be seven individual days where we maybe have 1,500 people that would come to Welsh Ryan Arena you know to watch a tennis tournament and we’re talking about pretty prominent names. That’s what we were envisioning on a multi-event basis.

August 23, 2019 E-mail from the Chamber of Commerce [emphasis added]

On Fri, Aug 23, 2019 at 12:36 PM Roger Sosa <Roger@evchamber.com> wrote:

Thanks for your message. The survey is meant to illustrate the facts around the proposal. We did consult with staff at Northwestern to confirm the facts. The responses so far are running over 80% in favor of the proposal. Also, based on the responses, it seems that many people didn???t know the facts about the redesign of Welsh-Ryan Arena or the tax contributions of Northwestern. The Chamber does feel that Northwestern is a tremendous asset to Evanston and brings significant economic benefits to the community. We hope to help bridge the gap and create a better ???town-gown??? relationship.

August 2019 Chamber of Commerce Survey Questions #6, #7, #9

6. Were you aware that NU pays a 12% athletic tax to the City on sales of sporting event tickets and that this tax totaled $1.4 Million in 2018?

7. Did you know that visitors to Evanston attending events spend an average of $30 per person at local businesses and restaurants?

9. According to NU officials, these events could potentially generate up to $5000,000 in new tax revenue to Evanston. Does this influence your view on the proposal?

2018 City Budget

City budget site lists for 2018: Athletic contest tax: $1 million (does the City budget athletic tax figure include other athletic contest revenues, i.e. does ETHS bring in any athletic tax revenue, for example?) At any rate it is NEITHER $1,468,758.69 nor $1,4000,000.

P&D October 28 , 2019 NUPower Point

$122, 400 for 6 concerts; 73,500 for 7 day tennis event

1500 attendance projection at the Plan Commission swells up to 2500 in NU’s October power point

NU claims repeatedly at City meetings and in emails to Mayor Hagerty that it wants to keep its 2 temporary events. Thus the figure needs to be cut by one third to $81,600. This lower figure also needs to be taken into account for the calculation as to the estimated and inflated revenue to businesses.

81,600 + 73,500 = 155,100 that’s a far cry from the Survey touted $500,000

Chamber Survey stated revenue from visitors to Evanston not Evanston residents....and Evanston residents get first dib at these new proposed events, according to NU, thus how many out-of-towners actually would attend these 4 events? The calculation needs to take that into consideration.

Food and beverage tax: assumes every single attendee will spend $20, which is absurd. Lots of people attend events without spending money beyond the ticket, especially if tickets are as expensive as those touted by NU.

NU lists 2% tax. I believe that tax might be incorrect. Isn’t the home rule tax is 1%?

Why am I quoting all these figures? Because the False HIGH figures are those that the Chamber of Commerce touted as facts in a survey to elicit positive responses for NU’s proposal; and because FALSE HIGH figures fed by NU are the same figures that Mayor Hagerty sent to residents inquiring into the projected income to Evanston from the proposed events.

Regarding lesser events than 6, this is an interesting angle that NU plays: If indeed there are only 4, they’ll claim lesser impact; if there are 6 they’ll claim more revenue. Either way, at the low end 11 new events is still a significant increase in size, intensity, frequency and type of events as compared to what has been hosted in the last decade or more in the U2 District. If the 2 small not for profit temporary events will be moved to the Lake Campus, the increase in revenue is still very modest and does not at all justify this proposed drastic zoning change.

Sincerely, Yvi Russell

Correction of above email: 1.25% Evanston Home rule tax, as of January, 1, 2020

Nov 11 at 10:56 AM

Evanston Box Office: False Figures

Three questions in the August 23, 2019 Chamber of Commerce survey addressed financial benefits to the City of Evanston and Evanston businesses. Council members have touted the Chamber survey results as valid, but the figures presented in the survey were False or unsubstantiated, thus invalidating any survey results, which by the way, were never fully disclosed to the public.

Below see what was touted by the Chamber and why those numbers are incorrect.

Chamber Question 6. Were you aware that NU pays a 12% athletic tax to the City on sales of sporting event tickets and that this tax totaled $1.4 Million in 2018?

Response re. #6 = False statement. The 2018 athletic competition tax revenue to Evanston was $1 million dollars, as it was in 2017 and in 2020. In 2019 it was 1,080,000.

Chamber Question 7. Did you know that visitors to Evanston attending events spend an average of $30 per person at local businesses and restaurants?

Response re. #7. First of all, the Chamber never provided any evidence to substantiate the $30 figure. Moreover, the Chamber survey question specifically states “visitors to Evanston attending events”. The question does NOT say Evanston residents; neither does it specify the type of events. Moreover, at the community meetings, the Plan Commission and the Planning and Development Commission (P&D), Northwestern stated they would give first dib to the proposed 13 days of events to Evanston residents. In view of such a repeated statement, visitors to Evanston cannot account as the 75% of $30 revenue generating population that NU lists in their P&D power point.

Chamber Question 9. According to NU officials, these events could potentially generate up to $500, 000 in new tax revenue to Evanston. Does this influence your view?

Response re. # 9. At the August 8 Plan Commission, Northwestern touted under oath for their proposed 6 concerts, $400,000 in tax revenue and projected 1,500 attendees for each of the 7 days of pro-tennis. At the October 28 P&D however, Northwestern power point showed an amount that was even less than $200,000 for all 13 days of events combined. Moreover Northwestern increased the proposed tennis event’s attendance daily numbers from 1,500 to 2,500 thus further inflating their athletic tax revenue. NU again quoted a wrong city tax, this time 2% for food and beverages. Currently, the Home Rules Sales Tax is 1%, and will increase to 1.25% in 2021. Finally, and not least, Northwestern has repeatedly stated that they want to keep two temporary events at the Stadium. However they still show 6 concerts on their latest power point chart. According to the submitted proposal NU would only be able to host a total of 6 temporary events. 2+6 = 8. The power point should have shown a further 1/3^rd reduction in amusement tax projection and also a parallel reduction in the projected revenue stream to the businesses.

I remind the Council members who are pushing for the text amendment proposal to become law:

The figures touted by the Chamber of Commerce and fed to the Chamber by Northwestern were FALSE. These figures have misled Evanstonians.

Now that Northwestern has literally captured the vivid imagination of some Evanstonians and many City officials in favor of the proposal, Northwestern has suddenly and significantly scaled down the tax revenue it claims it would generate. Thus, in 2021, Northwestern will not be liable to meet the expectations of a tax income touted to Evanston for 6 months and used to convince Evanston officials to approve the proposal, since Northwestern drastically reduced that false revenue figure on October 28^th, 2019, a date that likely will be too late to change City Council members' opinion two weeks later in 2019, on November 11.

Panem et Circenses

Yvi Russell