Evanston Licenses Margarita Inn As First Permanent Homeless Shelter

EVANSTON, IL — The Margarita Inn has become Evanston's first licensed year-round homeless shelter, as the City Council approved a special use permit and operating agreement with the local nonprofit that turned the former hotel into transitional housing during the early months of the coronavirus pandemic.

Councilmembers voted 6-2 on Monday to grant final approval to the permit and authorize the city manager to execute the agreement with Connections for the Homeless, which has operated the shelter at 1566 Oak Ave. for more than three years.

By working with the city to provide emergency housing in his vacant 46-room hotel, the Margarita Inn's owner, Michael Pure, was able to work off the nearly $478,000 the enterprise owed the city, which had placed a lien on the property in January 2020.

After Connections arranged to purchase the property last year, city staff determined it would need a new permit because it its operations at the hotel did not fit the zoning code's definition of "rooming house."

Ald. Jonathan Nieuwsma, 4th Ward, has spent the past year working with community members, the nonprofit, city staff and others to develop the permit and agreement.

Speaking ahead of the May 8 vote to grant preliminary approval to the permit, Nieuwsma acknowledged that the city of Evanston, on its own, is unable to solve national problems that contribute to homelessness — such as income disparities, housing affordability and a lack of health care.

"Vagrancy, panhandling, we have a problem here and we have to do something about it. That problem is here not because we invited it here — not because downtown Evanston said, 'Hey, come and hang out,' we have a problem here because of who we are and where we are, and we need to do more to address this problem," Nieuwsma said.

"Part of the solution is putting people in a building, and giving people a roof over their head and a bed to stay in, three meals a day. This is exactly what Connections is doing at Margarita Inn," he said. "If we don't do it here, where are we going to do it? If we don't do Margarita Inn, we're going to have more people on the street, we're going to have a tent city coming to a park near you."

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Nieuwsma, whose ward includes the shelter, described the binding special use permit and operating agreement, as well as a non-binding good neighbor agreement, as three legs of a stool that would hold provide guardrails and hold Connections for the Homeless to the highest possible standard.

Zoning and housing attorney Daniel Lauber, who was asked to consult for the city as the deal was negotiated, said he was concerned about how "loosey-goosey" the operating agreement is.

"It lacks specificity," Lauber said. "That leaves everybody at a disadvantage, namely the city, Connections, which doesn't really know what it has to comply with, and the residents of the home."

Nieuwsma said many of Lauber's suggestions had been incorporated into the final agreement, and Connections would have to get City Council approval if they made significant revisions to its policies and handbooks that have been incorporated into the nonprofit's agreement with the city.

Two councilmembers faced calls for their recusal from the vote, with one having received assistance from Connections and the other having made significant contributions to it. Neither opted to do so. Both are facing pending ethics complaints from residents.

Ald. Devon Reid, 8th Ward, said he did not believe it was a conflict of interest to have received rental assistance from Connections, which reportedly provided him more than $7,000 in emergency housing assistance.

"I firmly believe in my ability to vote on this item, I received general assistance that was available to anyone in the public," Reid said. "To the best of my knowledge, I did not ask nor receive any special treatment."

Ald. Eleanor Revelle, 7th Ward, and her husband, Bill, have made tens of thousands of dollars in donations to Connections in recent years, according to the nonprofit's reports.

Ahead of the council's vote to grant preliminary approval to the special use permit, Revelle asked Deputy City Attorney Alexandra Ruggie about the question of whether she should recuse herself.

"Based on your donations to Connections for the Homeless and based on the financial disclosure requirements by the city and the county," Ruggie said, "at this time a donation is not part of that financial disclosure and does not create a conflict of interest."

This week's vote on the permit follows a 3-3 vote from the city's Land Use Commission, which passed it to the City Council without a recommendation.

The commission originally considered the case in November 2022 and approved it 5-3, but Cameel Halim, who owns the Halim Time and Glass Museum next to the shelter at 1560 Oak Ave., got a Cook County judge to order the commission to reopen the case and hear testimony on his behalf.

Separately, the landlord of the 1566 Oak Ave., the Oak Ridge Apartment Building, filed suit against the Margarita Inn's owner, alleging that use of the inn as a "unlicensed homeless shelter" had "made it an undesirable, unsafe, and unstable residence and caused potential tenants to refuse to enter into rental agreements."

According to Lawrence Starkman's complaint, Connections offered Pure $8 million to buy the property — about three times what the Cook County Assessor's Office considers the hotel's estimated market value. It also recounts various public safety incidents reported at the Margarita Inn, attaching some police reports as exhibits.

"The Margarita Inn is now a powder keg that threatens the safety of the citizens of Evanston," the complaint said.

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The overflow crowd on hand for this month's votes appeared overwhelmingly in favor of approval of the inn's permit.

Dozens of residents spoke in favor of the permit and license agreement during the public comment period of both meetings, with many supporters of Connections donning matching blue shirts with the message, "We are all inn."

John Harris identified himself as of the Coalition to End Homelessness in Evanston, a group of about 25 local organizations.

"Over the past three years, we've seen that the 'housing first' model works. When you get people into stable situations where they have a place to live, then work with them to provide wraparound services tailored to their individual needs, you set them on a path to productive lives," Harris said. "The Margarita Inn, like other interim housing programs in other communities across this country, has proven to work and is a critical piece to ending homelessness in Evanston."

According to Connections representatives, 70 percent of Margarita residents have "exited to a housing solution" in the past three years, with hotel-based sheltering transitioning 1,200 shelter residents into permanent housing.

"The pandemic crisis might be over, but our homelessness crisis persists," Connections CEO Betty Bogg said in a statement ahead of the final City Council vote. "What hotel-based shelters like the Margarita represent is the future. We have a once-in-a-generation opportunity to turn that initial COVID response into something transformational and change the way we address homelessness across suburban Cook County and Illinois.”

Nieuwsma, Revelle, Reid, 2nd Ward Ald. Krissie Harris, 3rd Ward Ald. Melissa Wynne and 9th Ward Ald. Juan Geracaris voted in favor of the permit and operating agreement. Alds. Clare Kelly, 1st Ward, and Tom Suffredin, 6th Ward, voted against. Ald. Bobby Burns, 5th Ward, was absent.

Following the approval of the final amendments to the operating agreement on Monday, Nieuwsma said councilmembers trust that the nonprofit will be able to continue to do the work at the same level after its current managers and staff have retired.

"What we have in front of us now, as amended, is appropriately strict, yet flexible enough to allow Connections to react to changes in their operating environment, changes in the homeless population that they serve, which occur on a probably even a daily basis," Nieuwsma said.

"And what we've put together here is extremely effective and regards Connections as a trusted partner because they have the expertise in this area," he said. "This is not the city's homeless shelter. This is Connections for the Homeless, who have decades of experience doing this work."