EVANSTON, IL — The local nonprofit Connections for the Homeless will need a new special use permit to pursue its plans of making its shelter operations at the Margarita Inn permanent, city staff determined.
Zoning Administrator Melissa Klotz said current operations by Connections at the 1566 Oak St. hotel do comply with the zoning code's definition of "rooming house," but the special use permit under which the hotel has operated since 1974 is no longer valid.
In a letter to Connections' land use attorney, Klotz said that the nearly 40-year-old permit was expired and invalid for at least three reasons: the Margarita Inn had previously stopped operating for more than two consecutive years, structural changes were made without approval from the City Council's Planning and Development Committee and fewer than the required number of parking spaces have been provided.
Betty Bogg, executive director of Connections for the Homeless, pledged to work with city staff and elected officials to work through the special use permit application process.
In a statement after the determination, she said the Evanston-based organization has, since 1984, partnered with municipal representatives to help the most vulnerable members of the community.
“Zoning is complicated and often takes a long time," Bogg said, "but we are not deterred."
Connections currently shelters 61 people, including seven children, at the Margarita Inn, where it has a contract with owner Michael Pure to lease out all 46 rooms in the hotel, five of which are used by the nonprofit for offices and consultation rooms.
That arrangement began during Gov. J.B. Pritzker's March 2020 stay-at-home order after city staff contacted both Connections and the hotelier to see if it would be possible to shelter the unhoused in his vacant hotel.
At the time, Pure's hotel owed the city about $478,000 in unpaid hotel and parking taxes, and the city had placed a lien on the property.
By the end of the governor's stay-at-home order on May 29, the city had spent enough money at the hotel — money later reimbursed by the Federal Emergency Management Agency — to cover the back taxes, and the lien was later lifted.
Pure, a Deerfield resident, has not responded to multiple requests for comment and questions about whether he or his hotel still owe other forms of back taxes.
During the first year of the COVID-19 pandemic, Connections also housed people at the Hilton Garden Inn and the (now-foreclosed) Hotel Orrington for a time, but since October 2020, it has only operated out of the Margarita. In 2021, it served 187 people at the hotel, and it generally has a waiting list of between 50 and 80 people.
"Once we were able to place people at the Margarita Inn, we saw for ourselves the difference that made in their lives, in their wellbeing, in our ability to get them into a permanent housing situation," Bogg said at a community meeting this week. "So it's been really gratifying from our perspective to see the impact that we're able to have in that space. Over the last two years, we've sheltered 200 of our neighbors across three hotels."
In addition to providing shelter, Connections provides three meals a day at the hotel. Bogg said the group has put $500,000 into the local economy through buying food from local restaurants, and some restaurant owners have said they would have gone out of business had it not been for the demand from the shelter.
The nonprofit has spent $2.6 million at the Margarita Inn since the start of the pandemic, including $165,000 in hotel taxes. According to Bogg, bulk of that money comes from federal coronavirus relief funding distributed through Cook County and from its 3,000 donors, most of whom are Evanston residents.
People being housed in the hotel generally stay for about 10 months, with the majority of them moving into permanent housing, according to Connections' staff. Sixty percent of those who have been sheltered at the Margarita are Black people aged 60 or over, with twice as many men than women. One in 10 are single mothers and the other 30 present are children, married people or men under age 60.
Two out of three people served at the hotel are members of the Evanston community — either through past residency, employment or family members, according to Development Director Nia Tavoularis.
Under Evanston City Code, places zoned as homeless shelters are only permitted to operate 12 hours a day. That generally means people are forced to leave during the day, which makes it significantly more difficult for residents to secure and maintain a job.
"It's just a much more effective and efficient model to be able to serve people, and to be able to have them stay during the day at the shelter, and to not have to kick them out in the daytime," Tavoularis said.
Connections, which is in the early stages of discussing a possible bid for the property, received a letter from city staff earlier requesting information about its use of the site. It responded last month, and Klotz issued the city's zoning use determination Thursday.
“Since our inception 37 years ago, we have always responded to community concerns about the impact our operations have," Bogg added, referencing a packed community meeting hosted by 4th Ward Ald. Jonathan Nieuwsma Sunday at St. Mark's Church. "Valuing community input is not just a talking point for us — it is what the agency is built on."
One of the attendees who spoke during the meeting was Wilmette property developer Camil Halim, who owns the Halim Time and Glass museum next to the hotel and an assisted living facility across the street. The real estate investor called for the terms of any future purchase contract to be made public, and he was jeered by some in the audience when he told Connections to find another place to operate.
"Is that economical for you to pay this owner all this money and have a facility? Really, it is not designed for shelter. It is better for you to build a new structure — less money, and maybe you can stay there for a year, two years until your structure comes," Halim told Bogg. "And then you move to a neighborhood where people welcome you."
Residents who attended the meeting also raised concerns about litter, panhandling and harassment in downtown Evanston, although some acknowledged they may not be related to operations at the hotel.
"I'm often afraid to walk my dog in the middle of the night,"" said one attendee who identified herself as a resident of a nearby condominium building, "because I live very close to the Margarita, and there are times where it doesn't feel safe."
Connections for the Homeless representatives said the group currently spends $2.4 million a year to run its operations at the hotel, and it could save $1.4 million of that by buying it from Pure outright.
Property records show Pure bought the property in 2008 for $3.2 million through one corporate entity he controls before leasing it to another one.
The hotel is not listed for sale publicly, but its estimated 2021 market value was $3.3 million, according to the Cook County Assessor's Office.
According to the use determination from Klotz, the city's zoning administrator, a hotel at the site "not an eligible permitted or special use." It could not be immediately determined how that may affect the property's potential sale price.
"For Connections to proceed with a Rooming House use at 1566 Oak Ave., a new special use [permit] is required that includes a public hearing with the Land Use Commission and a final determination by the City Council," Klotz told representative of the nonprofit.
"If the Applicant so chooses, an accompanying parking variation request may be made to reduce or eliminate the off-site parking requirement," she added. "The City of Evanston appreciates your ongoing willingness to work together to resolve this issue."
There will be a cost to the community if the shelter at the hotel is forced to shutter, Bogg said, noting that homeless locally has been on the rise since the pandemic, with an 18 percent increase in the number of homeless children in Evanston schools.
"It doesn't cost nothing if someone isn't staying in a shelter. People still need to call the police, they still call the ambulances. People go to emergency rooms for treatment much more often if they're on the street," Bogg said. "People don't disapparate if a shelter goes away, they are still there, they are homeless and they are not getting their needs met — even more extremely than now."