What Exelon and ComEd Don’t Want You to Know

With electricity costs making up the first or second largest expense for BOMA/Chicago buildings, it’s crucial that we continue shedding light on Exelon and ComEd’s proposed legislation which, with its latest proposal introduced on November 15, would raise electricity rates $24 billion statewide over the next 23 years. BOMA/Chicago buildings alone – making up 5% of ComEd’s energy load – can expect to pay an increase of an estimated $417 million during that time.

More than likely you don’t have time to pour through the tedious and complex legislation (the most recent amendment was 446 pages in fact) so here are some basic facts that we suspect Exelon and ComEd don’t want you to know:

  1. Exelon is a publicly-traded, profitable company demanding a bailout. Buildings certainly don’t get a bailout, so why should a massive corporation that profited $2 billion last year and increased shareholder profits get one?
  2. Exelon’s plants have secured billions of dollars in contracts and subsidies. Despite claiming poor-performing nuclear plants, Exelon has secured over $4 billion in long-term contracts and subsidies for its nuclear plants.
  3. The numbers aren’t there now and won’t ever be if the rate increases are passed. Not only has Exelon failed to be forthcoming with all revenues at its nuclear plants, the rate increase proposal erodes public disclosure mandates and allows Exelon to keep ratepayer bailout money even if their nuclear plants are profitable. No true-up based on actual profitability would be required.
  4. ComEd will now profit from customer-funded sustainability incentives. Today ratepayers pay a 2% assessment on all electricity bills which is set aside in its entirety to fund or rebate various customer energy efficiency initiatives. This legislation would allow ComEd to profit through a “rate of return” when using dollars designated for energy efficiency – ultimately increasing costs to all customers.
  5. ComEd only makes money when electricity meters are spinning. Current law mandates that ComEd meet statutory goals for energy efficiency reductions – goals that ComEd has yet to actually achieve. The current statutory goal would be decimated, as this new legislation provides the utility with waivers to avoid meeting those requirements.
  6. Bottom Line: Chicago’s businesses will have to foot the bill. BOMA/Chicago buildings house more than 10,000 tenants who will ultimately pay the bill on top of a series of hefty property tax increase and fee increases the city has recently implemented . We have to wonder – how much more piling on will they tolerate?

BOMA/Chicago was just in Springfield to testify against the legislation and continues to work closely with a coalition of opposing organizations to educate legislative leaders and the Governor’s Office about the negative impact this legislation will have on our buildings and tenants. As always, it is the goal of BOMA/Chicago to mitigate any potential threat to our members and ensure that any impacts are as minimal as possible.

>>TAKE ACTION: Click here to contact your legislators today to ask them to oppose this legislation.

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Six Surprising Facts about the Exelon/ComEd Rate Increase Proposal

Exelon and ComEd have introduced a new legislation (House Amendent #2 to SB 2814) to drastically raise commercial and residential electricity rates and add new charges that will total $24 billion over twenty-three years. While Exelon and ComEd have claimed the rate increases and new charges are necessary to bailout its financially stressed nuclear plants and develop and enhance its “grid reliability,” it’s important that you understand the facts and adverse effects these changes would have on the commercial real estate industry and our tenants.

Below are six key reasons BOMA/Chicago has serious concerns regarding this new energy proposal by ComEd/Exelon:

  1. BOMA/Chicago buildings make up approximately 5% of ComEd’s energy load, and can expect to be billed an estimated $417 million of the projected increase. This increase will be passed through to businesses across the city, adding to the ever-increasing cost of doing business here.
  2. Exelon made more than $2 billion in profits last year. Despite massive revenues and increased shareholder profits, the company has repeatedly threatened to shut down its Quad Cities and Clinton nuclear power plants if their bailout proposal doesn’t pass.
  3. Despite claiming poor-performing nuclear plants,recent power auctions garnered Exelon an extra $1.7 billion for its nuclear plants. Though Exelon claims their nuclear assets aren’t economically viable, they were a big winner in last year’s annual capacity auction, where power producers bid for long-term contracts to supply electricity.
  4. Exelon’s total rate hike proposal statewide is estimated to be $24 billion over the next 23 years.The tax hike burden will fall on government, businesses and consumers.
  5. It’s estimated that ComEd and Exelon will secure $1 billion in profits over the next 10 years from the proposal.That doesn’t include the $2.6 billion subsidy Exelon’s struggling power plants would receive over that same time period.
  6. Customers have already paid twice for those nuclear plants.Not only did customers pay for construction of the same nuclear plants through regulated rates, we also paid over $10 billion in customer transition charges to the profitable publicly traded Exelon.

At this time, BOMA/Chicago is still not convinced that all income from Exelon’s Quad Cities and Clinton plants has been included in determining whether those plants are profitable, or of Exelon has considered all alternative options other than raising rates on Illinois energy consumers. On the cost side, ComEd and Exelon have only provided BOMA/Chicago with preliminary data to estimate the financial impacts to commercial customers.

BOMA/Chicago was just in Springfield to testify against the legislation and continues to work closely with a coalition of opposing organizations to educate legislative leaders and the Governor’s Office about the negative impact this legislation will have on our buildings and tenants. As always, it is the goal of BOMA/Chicago to mitigate any potential threat to our members and ensure that any impacts are as minimal as possible.

>>TAKE ACTION: Click here to contact your legislators today to ask them to oppose this legislation. 

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CRE Insights & Advice from Three Emerging Leaders

BOMA/Chicago’s Emerging Leaders Network provides career development, education and networking opportunities for BOMA/Chicago Building and Affiliate members with a recommended seven years or less of experience in the commercial real estate industry.

el-headshotsWe asked three emerging leaders to describe their professional backgrounds and to give us their insights on CRE. Read the responses below from Angela Oh, JLL; RJ Parrilli, Midway Building Services, and Ebony Andry, Sterling Bay.

As an emerging leader in commercial real estate, what are some of the top industry issues you believe your peers should be aware of/focus on?

Angela Oh: The need for permanent office space is diminishing due to flexible work environments. The modern workforce is doing business off-site, from a remote location and working hours are not the typical 9 to 5.

RJ Parrilli: We have an aging work force in the field and there could potentially be a labor shortage with the amount of people in our generation entering into the trades. There may be a shortage of skilled tradesmen as you look at the current demographics.

Ebony Andry: Tenants are now using space differently and looking for more amenities and common space in buildings. We should be aware of these increasing demands, and in some instances requirements for things such as tenant lounges, fitness centers, creative spaces and bike rooms.

What is your vision for the future of CRE? How do you expect the industry will change in 5/10/20 years?

Angela Oh: The CRE industry will likely evolve to cater to the demographics of the younger workforce.  Many of the traditional offices and spaces will be redesigned for more collaborative settings.

RJ Parrilli: With the baby boomers exiting the commercial real estate industry, there could be a pivotal change with gen x,y, and millennials leading the ever changing industry. With more of a focus on a work- life balance, it could change the landscape of the suburbs to become more of an urban center focused on a better quality lifestyle.

Ebony Andry:  Technological advances will improve the way we do business and make us more efficient. I envision programs that can merge the various needs of owners, leasing agents and property managers, thus improving overall communication and productivity.

What unique ideas/perspectives can younger CRE professionals bring to the table?

Angela Oh: As the large number of workforce are now the millennials, the younger CRE professionals can relate and contribute to what the tenants needs will be. Having a collaborative and relaxed tenant spaces/lounges equipped with Wi-Fi connectivity will become a necessity and we will need to build out spaces that cater to younger generation (ex. open spaces vs. offices).

RJ Parrilli: We can provide what the younger generation looks for when occupying and using CRE space.  Younger professionals are replacing the baby boomers and will be one of the largest consumers in history. For example, businesses today consider location even more important than compensation. Baby boomers want to live to work, Gen X wants to work to live and the millennials are looking for a work to play lifestyle.

Ebony Andry: Younger professionals bring a unique perspective to the industry, including more efficient ways of accomplishing objectives with the use of technology and innovative ideas regarding tenant amenities.

What do you consider to be your greatest career accomplishment thus far? What are your goals moving forward?

Angela Oh: My greatest achievement was earning the 2014 Reginald L. Ollie Inclusion and Outreach Scholarship and then the RPA designation in 2016. Through this scholarship, I was able to complete my requirements in two years and studied all aspects of property management.  I also had the opportunity to network and expand relationships with my fellow industry professionals.

RJ Parrilli: My biggest career accomplishment is heading up the start of Midway Staffing and expanding Midway into the market of temporary labor services. My goal is to continue the success with this expansion and new ways to add revenue and solutions to the real estate community.

Ebony Andry: In April of 2016, I was awarded the Reginald L. Ollie Inclusion and Outreach Scholarship and this was my greatest accomplishment to date. My goals include completing my RPA, becoming the General Manager of  a 500,000+ square foot building, earning LEED certification and becoming  a great resource and mentor for other professionals in the industry.

What first made you want to get involved in CRE?

Angela Oh: Working as a CRE professional involves a variety of skills and almost forces you to be well-rounded and a good multitasker.  I enjoy the spontaneous events that arise and the impromptu actions you have to take in order for your building to run smoothly.  The unpredictable side of working in this industry may be scary at times, but I welcome the challenges and hope to enhance my skills through these events.

RJ Parrilli: As I found myself working in the insurance field, I was presented an opportunity to help Midway expand their vertical market by putting a focus on multi-tiered relationships. BOMA/Chicago, City of Hope and many other organizations greatly helped me develop relationships which have turned into clients and personal friends which will last a lifetime.

Ebony Andry: What first attracted me to the CRE industry was the great variety in tasks that each day brings. There is nothing mundane about property management. Tasks vary from working on tenant space improvements and building capital projects to creating budgets and conducting fire drills.

Do you have a mentor (within or outside of your company)? How has he/she helped guide you?

Angela Oh:  My General Manager at 71 South Wacker, David Hopwood, has been an integral part of my professional experience.  He has supported me throughout all my endeavors and enriched my knowledge how to make my building the best of the best.  Second, as part of receiving the Ollie Scholarship, I was able to choose Rebecca Miles, Piedmont Office Realty Trust, as my mentor. Becky has been an amazing partner; she made herself available to discuss my progress, assisted me in decision making and provided a different perspective on managing commercial real estate.

RJ Parrilli: Joe Sergi with Clear Height (formerly REX Electric). When I first was thinking of joining Midway, I sat with Joe multiple times and he discussed all the pros and cons of this industry and the potential opportunities of what can lie ahead. He has assisted me in developing my customer base and guiding me in to the right organizations.

Ebony Andry: My General Manager, Bonnie Boden, has been a great guide and advisor. She motivated me to earn my Broker’s License and RPA. She inspired me to set high goals and achieve them. My second mentor, Max Andrews, Matting by Design, is one I gained as part of the Ollie Scholarship. Max has encouraged me to be a resource to others around me and to have courage to ask for help when I need it.

What would be the one piece of advice/guidance you’d pass along to someone considering a career in the CRE industry?

Angela Oh: Be open-minded!  CRE is not just about managing buildings. It incorporates so many aspects of business practices and you are sure to find an area of passion. The network of professionals in Chicago’s CRE market is extensive and a beneficial resource. Also, being part of a great organization like BOMA/Chicago, you are able to network and build great relationships to help you do your job well.

RJ Parrilli: Younger professionals tend to look for a quick advancement. There is a lot of opportunity in CRE to be successful – but it takes time and patience. It is rewarding to see people who you started with working up the corporate ladder and capitalizing on their own opportunities.

Ebony Andry: The CRE industry is both challenging and compelling and the people in it are like a small community, kind and willing to help. Once someone has decided to be a part of the industry, I would further advise them to get involved, increase their knowledge and find someone who will be a helpful and enthusiastic mentor.

For additional information about BOMA/Chicago Emerging Leaders or to be added to the Emerging Leaders email list, contact Beth Halat, Director of Member Services at bhalat@bomachicago.org.

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BOMA/Chicago’s Chief Curmudgeon Enlightened by our Hometown Heroes, the Chicago Cubs

My job as chief staff officer for BOMA/Chicago often involves criticizing and opposing proposed actions that we view as damaging to our members, the commercial real estate industry, and our great city. Sometimes I’m a naysayer and sometimes I go on a rant. But not today.

Today it’s about celebrating our Cubbies in the World Series.

For all that’s wrong and troubling in Chicago these days, it’s incredibly refreshing to have something to be proud about, something that brings honor and celebration to our city, something that so embodies the can-do spirit of our city and our Cubs, something that recognizes this amazing accomplishment by the team, the owners and managers, and the fans.

As BOMA/Chicago’s professional curmudgeon, it’s not often that something as sweet as this brings a smile and a tear of joy to my face. But it did on Saturday night. I’ve never been a huge baseball fan, but I think that many Chicagoans like me became fans on Saturday – at least for a little while, but maybe for a lifetime. So thanks to our Cubs for that.

Please join me and the BOMA/Chicago family by lighting your buildings blue for our home town heroes as they begin the World Series of this amazing season.

 

 

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A Closer Look at the Property Tax Burden on BOMA/Chicago Buildings

At BOMA/Chicago, we’re always advocating on our members’ behalf by regularly engaging in open, productive dialogue with key stakeholders surrounding public policy and fiscal decisions aimed at fostering a thriving Chicago.

While our elected officials at the local, state and federal levels initially come to mind when thinking about policy issues, it’s also important to not overlook another mainstream player – the media. Whether behind the scenes or out front making headline news – as best exemplified in the extensive media coverage Michael Cornicelli outlined in his blog post last year surrounding Mayor Emanuel’s property tax increases – we’re always working closely with reporters, editors and producers throughout Chicago to further educate them on our position surrounding issues impacting our members and the City.

Part of this effort involves sharing information. BOMA/Chicago regularly tracks and aggregates data to help shape our conversations with the media and build solid, mutually-beneficial relationships with key reporters covering our industry.

Last Thursday, Crain’s published an article by Greg Hinz titled “Are property taxes on office towers rising less than on homes?” It centered around property taxes and assessments, in which BOMA/Chicago openly shared pertinent data. Unfortunately, the article incorrectly extended conclusions from the data provided which painted an overwhelmingly inaccurate picture of Chicago’s commercial real estate industry.

It should come as no surprise that the story raised major red flags for all of us at BOMA/Chicago. Bottom line: Crain’s got this one wrong. BOMA/Chicago has already replied publicly with a letter to the editor, and we also wanted to communicate with our members directly to shed some light on where the article missed the mark.

  • Taxes: It was implied that BOMA/Chicago buildings pay less, when in fact our data shows that as a percentage of assessed value, our member buildings paid 18.3% in taxes, compared to 17.4% by all Chicago property.  And most importantly – our member buildings are paying over $842 million in taxes –$94 million more than last year.
  • Tax Burden: The reality is commercial buildings are already assessed at a rate that is 250 percent higher than residential buildings. That means that for every $100 of property value, single-family homes are assessed $10 and commercial buildings are assessed $25.

Understanding the true tax burden on BOMA/Chicago buildings is not only protecting the best interest of our members and the thousands of businesses they house – it’s also protecting the very economic engine that drives Chicago. Increasing property taxes threatens that engine and the economic fate of the city. BOMA/Chicago remains committed to working with  both elected officials and media to help steer the issue in a direction we can all get behind.

 

 

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Fundamentals of Emergency Preparedness in the CBD

Keeping buildings and tenants safe is a top priority – and it begins with proper preparation. A key part of any preparedness plan is fully understanding the resources available in the event of an emergency. To ensure these resources are front and center, we decided to get back to the basics last week and invited some of Chicago’s first responder agencies to attend our Preparedness Committee’s Open Meeting and discuss the fundamentals of emergency preparedness in the Central Business District. Our guests included:

  • Earl Mashaw – Office of Emergency Management and Communication
  • Commander Wally Schroeder – Chicago Fire Department
  • District Chief Brian Helmold – Chicago Fire Department
  • Sergeant Amanda Vanek – Chicago Police Department
  • Sergeant Joel Holler – Chicago Police Department
  • Officer Kevin Hacker – Chicago Police Department
  • Detective Baz Khoushaba – Chicago Police Department

The key takeaway for our building members from this meeting centered on the importance of cultivating relationships with first responders in the CBD that keep us safe and increasing awareness of the resources available through these agencies. Below is a high-level overview of the key points shared by our partner agencies.

Earl Mashaw – Office of Emergency Management and Communication (OEMC)

Above all else, the primary intent and goal of the OEMC is to keep Chicago safe through the coordination of various business units’ operations. This can be done through 911 operations, 311 city services, traffic management authorities and public safety information technology, including security cameras throughout the City. The OEMC accomplishes this through various information centers, including:

  • Coordination Centers – houses city-wide information to ensure all OEM information centers operate to the best of their abilities and with the most accurate, up-to-date information
  • Operations Centers – conducts public safety monitoring and coordination
  • City Incident Centers – conducts public works monitoring and coordination
  • Emergency Operations Centers – conducts information and resource coordination during large-scale events
  • Joint Information Centers – coordinates emergency public information to ensure clear and consistent communications during an incident
  • Chicago Public Schools Security Center – NEW – collects and aggregates data from CPS

Wally Schroeder, Chicago Fire Department – Fire Safety Director Program

In partnership with BOMA/Chicago, the Chicago Fire Department’s Fire Safety Director program has become an accelerated, comprehensive educational course addressing the key aspects of fire safety, including city codes, fire behavior, building components and overall fire emergency preparedness. Upon completing the program, each building’s fire safety director is certified for a two year period before being required to obtain recertification. But take note building members – your certification is only good for the building at which you worked during the time of completion. For more information or to register with the Fire Safety Director Program, visit: https://webapps1.cityofchicago.org/FireSafety/

Brian Helmold, Chicago Fire Department – High Rise Incident Command Procedures

A fire within any BOMA/Chicago building will be a complex situation involving the action of numerous individuals and groups to ensure the safety of everyone within the building. Most importantly, timing is everything. Upon arrival, first responders will rely on building management to relay critical information to help accelerate the process, including:

  • Location of the fire (floor/tenant)
  • Elevator that services all floor (preferably a freight elevator)
  • Evacuation announcements previously provided
  • Location of stairwells
  • Evacuation plans/floor plans
  • Special needs occupants
  • Details of building’s HVAC systems, fire pump location, alarm panel information, electric closets and sprinkler system shutdown

Sergeants Amanda Vanek & Joel Holler, Chicago Police Department – Business Liaisons

Just as every BOMA/Chicago building is different, so too are the concerns of each of our members. One of the primary purposes of the Chicago Police Department’s business liaisons is to build relationships with the constituents of the Central Business District – they do so by regularly attending BOMA/Chicago meetings and events – and address those individual concerns.  The Chicago Police Department strongly encourages our members to reach out with any issues (nothing is too big or too small), but some common concerns the liaisons address include:

  • Large-scale, private events at buildings
  • Special guest appearances (i.e., dignitaries)
  • Obtaining liquor licenses for events
  • Active shooter planning and preparation
  • Up-to-date information surrounding protests/demonstrations
  • Homelessness (in partnership with City Services and Department of Human Services)
  • Robberies/Crimes of opportunity in the Central Business District

Generally speaking, businesses located north of the river are in the 18th district and can contact the Business Liaison officers at 312-742-5880.  Businesses south of the river are in the 1st district and can call (312) 745-4295.

Officer Kevin Hacker, Chicago Police Department – CP3 and FIMS

The Chicago Public/Private Partnership (CP3) aims to leverage enhanced information sharing and more timely communication to create a safe and more secure Chicago. The focus is to:

  • Create a secure, single site for collecting facility data
  • Create a means to expand and facilitate information sharing between private and public sectors
  • Create a collaborative environment
  • Create the ability to develop a consistent first responder data report

In order for this process to be as effective as possible, both building management and tenants need to provide data and information pertaining to contact information, floor plans, hazardous materials on site, CCTV details and tenant information, among others. The goal is to then share this information with the public sector, where it can be accessed through first responder networks to support efforts in the event of an emergency. Learn more or sign up at www.preparedchicago.com.

Detective Baz Khoushaba, Chicago Police Department – Suspicious Activity Reporting

“If you see something, say something” is truly the mantra when it comes to reporting suspicious activity. The Chicago Police Department relies on the eyes and ears of everyday citizens to identify suspicious behavior, and this is something each and every one of our building members can stress to the tenants in their properties. By leveraging various law protection agencies such as the FBI and Department of Homeland Security, the Chicago Police Department incorporates the information shared by the public to aid new or ongoing investigations involving everything from minor incidents to potential acts of terrorism. At the end of the day, it’s everyone’s job to report suspicious behavior and work as a collective unit to ensure everyone stays safe.  Suspicious activity or behavior can be reported to the “See Something Say Something” hotline at 855-RPRT-2-S$ (855-777-8274).  However, if you are witnessing suspicious activity as it is occurring, Detective Khoushaba advised people not to be hesitant to contact 911 so that there is the possibility of immediate investigation into the event.

For more information on emergency preparedness, or if you’d like to connect with any of our first responder partners, please contact Ron Tabaczynski, BOMA/Chicago’s Director of Government Affairs, at rtabaczynski@bomachicago.org.

 

 

 

 

 

 

 

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Premier Security’s 5K for Missing Children

jim-taff

By: Jim Taff, CEO, Premier Security

Child abduction and exploitation is a very real and serious issue that occurs in many of America’s major cities, just like right here in Chicago. According to the FBI, there were over 460,000 reports of missing children in the United States during the year of 2015 entered into the National Crime Information Database.

Plain and simple, these numbers are staggering. Which is why Premier Security has decided to take a stand and support the efforts of the National Center for Missing & Exploited Children (NCMEC) by providing specialized security officer training to each of our over 1,000 employees in what to know for these types of crimes. But, we are also taking our support one step further. To help raise awareness of this very serious issue and to educate families on how to keep kids safe, we are hosting Chicago’s first 5K Run/Walk benefiting NCMEC.

On October 15, 2016, hundreds of families will gather together and run/walk to raise awareness and support NCMEC’s mission. Starting and finishing in DuSable Harbor, runners and walkers from throughout Illinois will block out the lakefront trail. The event will include a 5k Run and Walk, a Kid’s Dash, Face Painting, Bounce House, Kids IDing, Post Race Party and many other great activities for the entire family. Registration for this event is now open. We welcome anyone to join us who is willing to help raise awareness or learn ways that they can keep their children safe. We are extremely excited to be able to host such a worthwhile event and are looking forward to a very successful day!

Premier Security is a BOMA/Chicago Annual Premier Sponsor.

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