Town Wants Gown to Cover More Expenses

EVANSTON, Ill. —  A basketball net clings to the hoop by worn threads, the court’s blacktop shattered and cracked by the changing seasons. Nearby, a graffiti-covered handball court stands forsaken.

For Northwestern University, these are the forgotten corners of its sprawling campus. But to the city of Evanston, this haggard playground is at the center of an economic battle that dates back more than a century.

Underscoring the increasingly fierce battles between cities and the tax-exempt schools that drive them, Northwestern has filed a civil suit against Evanston, accusing the upscale Chicago suburb of extortion “and acting with vindictiveness.”

After years of trying -- and failing -- to get Northwestern to pay more for city services, the lawsuit alleges, Evanston retaliated by passing an ordinance in May 2000 that created a new historic district. The district -- which includes dozens of university buildings -- requires city approval for even the most minute changes to the exterior of the properties.

Among structures labeled historic are a dormitory built in 1973, a concrete gymnasium built in 1974, a university transportation center built in 1999, as well as the sports courts.

“If we want to replace a light fixture, we need to get the city’s permission,” said Alan Cubbage, vice president of university relations. “It’s ridiculous. These are not historic buildings.”

The city denied it was targeting the university. Officials said that the district was created to protect some historic homes and that the school property just happened to be within the boundaries.

Northwestern filed its lawsuit in November 2000, seeking to dissolve the historic district. The case goes to trial March 1.

Private and public universities provide jobs and generate business revenue in their communities. They offer cultural and recreational activities that might otherwise not be available. As nonprofit institutions, they also remove significant chunks of land from the tax rolls. In flusher times, that was a trade-off many college towns could live with.

Today, that’s not the case. Cities face a financial squeeze from a slower economy: State revenue to cities has been cut by nearly $2.3 billion for fiscal year 2004, a 9.2% drop from 2003, according to the National League of Cities.

“The demand for city services never goes down. It always goes up,” said Michael Reinemer, spokesman for the organization. “Ultimately, someone needs to pay the bill.”

Evanston officials say Northwestern annually uses tens of millions of dollars’ worth of public services, but pays no property taxes and refuses to voluntarily pay for the upkeep of parks, roads, sewers and the like. They wonder why a university that has raised $1.55 billion over the last seven years -- and now has a total endowment of $3.5 billion -- won’t pay up.

Northwestern officials counter that the $4.3 million a year the university pays to Evanston for utilities, taxes for parking and sporting events, and other fees is more than enough.

“Yes, the university has the capability to do more. But it’s not going to,” said Eugene S. Sunshine, senior vice president of business and finance for Northwestern. “The university has needs as well.”

Northwestern, the city’s biggest employer, isn’t the only school to feel such pressure.

Cornell University in Ithaca, N.Y., agreed to make yearly payments in lieu of taxes only after the city stopped giving it building permits. In Rhode Island, the governor floated a proposal that would have allowed towns to force private colleges and universities to pay property taxes or fees in lieu of taxes. As a result, Brown University and three other major colleges agreed last year to pay their hometown of Providence $50 million over the next two decades.

Unlike other schools, which often pay taxes on lands used for commercial endeavors, the Illinois Legislature’s land charter exempts Northwestern from paying taxes on its property -- about 242 acres, or 4.5% of city land, much of it expensive lakefront. “There’s no question that Northwestern gives back to the community in ways we can’t calculate,” said City Manager Roger Crum. “But we routinely have a $3-million gap in our $70-million general fund budget that we have to fill. The fact that Northwestern doesn’t pay property tax is always a sore point.”

Compared with other schools of its stature, Northwestern’s contributions are notably smaller. USC, the largest private employer in Los Angeles, owns 337 acres, or nearly 40% more land than Northwestern. However, USC paid $25.4 million to the city and to Los Angeles County in taxes, permits, utilities and other fees last fiscal year -- nearly six times more than Northwestern.

Stanford University controls more than 8,000 acres, which cross into four cities and two counties in Northern California. In Palo Alto alone, the university owns more than 1,000 acres that have been parceled off for commercial use, including a shopping mall.

The school paid Palo Alto nearly $6 million for fire and police services for fiscal 2001-02, city officials said. In addition, Stanford and its commercial tenants forked out $47.7 million in utilities and $7.2 million in property taxes.

“We have deals in place with each city and county, and we’ve had most of them in place for more than 20 years,” said Larry Horton, associate vice president and director of government and community relations at Stanford. “If we didn’t, it’d be a legal and public relations nightmare. I can’t imagine why Northwestern doesn’t just pay and make Evanston happy.”

The current legal battle has just widened the long-standing social rift between the school and the city.

All along Gaffield Place, just two blocks from the campus along the shore of Lake Michigan, snow drapes the stately homes like soft fur stoles. Because of limited on-campus housing, students cram into nearby neighborhoods, transforming some of these single-family homes into housing for more than a dozen people.

Where there are students, there are loud parties, say residents. They grimace when partygoers litter their flower gardens with beer cups and swath the streets’ maple trees with toilet paper.

“I typically roll over, put a pillow over my head and try to ignore it,” said movie producer Timothy Evans. “We call the police, they break up the party, and 10 minutes later, the party’s back.”

The Evanston Police Department says that it answers as many complaints as it can, but that its two-person Northwestern “party patrol” is often overwhelmed.

Such town-gown conflicts have become as much a part of college life as homecoming and Greek Week, said resident Julie Zimring. Zimring, who lives about three blocks west of the university, said she and her husband thought they were prepared for the inevitable noise problems when they moved here.

Several years later, the students’ rude behavior has worn down her family, Zimring said.

“We’ll sell, but we won’t do it until summertime,” she said. “That way, the students aren’t around.”

Northwestern said it has tried to address such resident complaints more aggressively. In October, the university altered its disciplinary policies. The school now punishes students who break the law off-campus.

School officials insist that part of the problem lies with the city for not rigorously enforcing housing and building codes.

That rift between students and residents grew even more tense last fall when four men, including two Northwestern football players, were charged with disorderly conduct after allegedly attempting to force their way into an Evanston woman’s home.

University officials and the Evanston City Council tried last year to resolve the standoff over the historic district.

The city agreed to remove 15 university buildings, such as the dorm and the transportation office, from the historic district, said Northwestern’s Sunshine. Certain parcels of relatively undeveloped land -- such as a parking lot --would have remained in the district to block the university from building in the predominantly residential area.

In return, the city would be able to control growth in the residential area, and end the legal battle that has cost Evanston about $600,000 so far.

When the council voted on the matter, however, two of its members who negotiated the settlement changed their minds and rejected the proposal. Council officials would not say why they had made the switch.