Preparing for the Unthinkable: Workplace Violence

Part One of a Two-Part Series

By Ron Tabaczynski, BOMA/Chicago Director of Government Affairs

Several high-profile, violent incidents across the world in recent months have put security and emergency preparedness on top of the minds for many in the commercial real estate industry. Many building owners and managers are grappling with this unfortunate, everyday reality that could impact our properties and tenants.

Recognizing the concern, BOMA/Chicago’s Security Committee recently hosted an Open Security Committee Meeting to address these important topics, with a special focus on workplace violence and its link to domestic violence.

Expert speakers included Pam Paziotopoulos, Senior Council at Dussias Skallas LLP, a nationally recognized expert on domestic violence and a former Assistant State’s Attorney; John Busch, Illinois Protective Security Advisor for the U.S. Department of Homeland Security; and Keith Martin, Vice President and Physical Security Manager at JPMorgan Chase.

In the first of a two-part Elevator Speech series, we’ll explore some of the underlying causes, as well as predictors, of workplace violence.

Domestic Violence

Domestic violence is unquestionably a serious issue in its own right, but according to Pam Paziotopoulos, the impact of abuse at home often carries over to the workplace as well. It is estimated businesses lose between $3 and $5 billion each year in reduced productivity, increased health care costs, absenteeism, etc. as a result of domestic violence.

When we look at employed domestic violence victims, the statistics are staggering:

  • 98 percent have difficulty concentrating
  • 78 percent report being late
  • 53 percent report losing their job
  • 47 percent report being victimized before work

Unfortunately, domestic abuse also plays a direct role in many workplace violence incidents, with 67 percent of victims reporting that violent offenders have come to their workplace. As soon this occurs, the immediate threat to coworkers and others in the building escalates. According to a national survey conducted by the National Safe Workplace Institute, 71 percent of HR and security personnel surveyed have had an incident of domestic violence occur on company property. Further, 94 percent of corporate security directors rank domestic violence as a high security problem at their companies.

The troubling reality is that domestic violence often infiltrates the workplace. Think of it this way: a victim can change his/her email address, phone number and even address to avoid an abuser. However, it’s much more difficult for victims to change jobs, making them vulnerable to stalking and, in some cases, violent attacks.

Domestic violence cannot be ignored.   Training both employers and their employees on the correlation between domestic and workplace violence is critical to maintaining a safe and secure working environment. There are many resources available. You can find a model workplace policy on the American Bar Association (ABA) website.

Warning Signs

Ask John Busch and he’ll tell you perpetrators of violence in the workplace, from ex-spouses or significant others to disgruntled employees, usually display certain types of behavior prior to the incident.

As part of a recent study, the FBI’s Joint Intelligence Bulletin analyzed more than 150 active shooter events over a period of ten years. Workplace retaliation, domestic disputes and academic retaliation were among the top motivations for an attack. Shooters were often social isolates, and some struggled with mental health. What may come as a surprise, however, is very few had previous arrests for violent crimes. Interestingly, one common indicator of an attack was a major, negative, recent development in the shooter’s life, such as a breakup, financial trouble, job loss or a death in the family.

In 80 percent of shooter events, friends and colleagues saw major behavioral changes in the shooter before the attack. Examples include:

  • Talk of previous violent incidents
  • Unsolicited focus on dangerous weapons
  • Paranoia or depression
  • Overreaction to workplace changes
  • Depression or withdrawal
  • Unstable, emotional responses to everyday conflict
  • Intense anger or hostility
  • Increase alcohol or drug use
  • Violations of company policies
  • Increased absenteeism
  • Blaming others

Upon noticing these characteristics in a colleague, many people’s gut reaction is to withdraw and minimize further interaction. However, this only further isolates the individual and compounds existing issues. Whenever possible, employers and  employees should be trained to recognize unusual behavior in their coworkers. Counseling services should be offered or made available by the employer. A proper referral may not only help the troubled employee, but also ultimately prevent violent workplace attacks.

Contingency Planning

Offering training on how to prevent workplace violence is only half the battle. It’s also important to have an emergency plan in place should an attack occur. In part two of this Elevator Speech series, we’ll share best practices on how to prepare for a worst case scenario – an active shooter event in your building.

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Open Letter regarding Property Tax Increases to BOMA/Chicago Members from Michael Cornicelli

Dear BOMA/Chicago Member:

I’m sure that you have seen and heard the press coverage of Mayor Emanuel’s proposed 2016 budget and real estate property tax increase totaling over $543 million for 2015-2018, including his push to shift much of that burden to commercial taxpayers by doubling the homeowner exemption.

I have never seen an issue with the potential for such dramatic impact on our industry in the nearly 15 years I’ve worked for BOMA/Chicago.

You know that commercial property in Cook County (and only in Cook County) is assessed at 2.5 times the rate at which single family homes and condos are assessed. Because of that, our buildings and tenants have borne far more than our fair share of the tax burden for many years. We cannot allow that to be perpetuated and made even worse. The health of our economy and the attractiveness of our city as a home for business and jobs are at stake.

I want all of you to know that we are employing every resource available to us to evaluate the Mayor’s proposals, to ensure that they are as fair to our industry as they can be. To that end, we will fight against further overburdening commercial taxpayers and tenants in whatever form the painful steps toward fiscal responsibility might take. We are utilizing our own talented staff, our lobbyists both here and in Springfield, tax counsel and researchers, and our public relations firm. Here is a summary of some of the steps we have taken so far:

Participating in Discussions with Key Policymakers

  • We were invited to a private briefing by Vice Mayor Steven Koch and the city’s CFO Carol Brown on the Mayor’s budget and tax proposals, which we attended along with the Civic Committee and the Chicagoland Chamber of Commerce.
  • We met with the Governor’s senior staff to further educate them about the impact of the proposed property tax increase and the dramatic and adverse effects of shifting that burden to commercial buildings and tenants by increasing the homeowner exemption.

Taking our Message to the Public

Making our Voice Heard in Springfield

Forming a Coalition with Like-Minded Business Groups

  • We took the lead in forming a coalition of like-minded business groups working together on these issues. The group includes: Chicagoland Chamber of Commerce, Illinois Chamber of Commerce, Illinois Retail Merchants Association, Illinois Manufacturers Association, Civic Committee of the Commercial Club, Chicagoland Apartment Association, Illinois Restaurant Association, and others. The list is growing.
  • We continue to research the economic impact of the proposed tax hikes and the proposed expansion of the homeowner exemption, including the effect of the shift in burden from residential to commercial taxpayers. It is difficult to accurately estimate the impact until we see specific proposed legislation, but we’re doing our best with assumptions.

We will soon ask all of you to reach out to the Mayor, the Aldermen, and members of the General Assembly and tell them why we think they must tread cautiously before taking dramatic steps that could jeopardize our economy. We will also ask you to request that your tenants do the same. In particular, we hope you will convey opposition to any proposal to shift this unprecedented tax increase from residential taxpayers to commercial taxpayers, whether that takes the form of an increased homeowner exemption or some other mechanism.

Look for further communications from us very soon that will provide you and your tenants with the tools to take proactive steps in shaping this outcome. As always, your voice is more important than mine in impacting these events.

Thank you for your help and support.

Sincerely,

Michael Cornicelli
Executive Vice President

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Setting the Record Straight on Rumored Property Tax Increases

No one should be surprised about the current fiscal crisis Chicago is facing, but the abundance of recent news articles claiming our taxes are about to explode can be unnerving. And while the increases seem to be coming at us from all levels, hitting us from every possible angle, one of the most alarming pieces I’ve read is from Crain’s Chicago Business suggesting property taxes will increase by 30 percent.

So it’s important to understand that what we’re reading and hearing right now about property taxes is highly speculative. Press accounts are based on assumptions of what will or will not be proposed, what our legislators will or will not approve, and what our governor will or will not sign. There’s really no way to calculate the city’s total liabilities until Springfield passes a budget and resolves the many issues log-jammed with it.

Some of those issues that will impact our taxes include pension reform, workers’ compensation and tort reform. In fact, the Chicago Sun-Times today reported that reforms recently proposed by Governor Rauner would lift the state-mandated $550 million police and fire pension fund payment and provide Chicago with 15 more years to reach 90 percent funding levels – saving the city $843 million over the next five years. Additional proposals include a city-owned Chicago casino with revenues dedicated to the police and fire pensions and the state assisting with teacher pension payments and health insurance contributions. All of these measures would provide significant and much needed relief to the city and taxpayers.

There’s no question that there must be shared sacrifice across the board to resolve these major fiscal challenges. But let’s not forget the burden our commercial real estate industry already shoulders. Commercial real estate property taxes in Chicago account for over 75% of a large building’s total operating expenses, the highest percentage compared with similar cities across the country. Our commercial buildings are assessed at 2.5 times the rate applied to residential buildings and BOMA/Chicago buildings alone paid nearly $750 million in property taxes this past year. And every time another high-rise sells, the city is behind the scenes collecting its transfer tax. The Willis Tower sale alone generated about $10 million for the city.

And the value our industry brings to the city is substantial. BOMA/Chicago’s Economic Impact Study revealed that BOMA/Chicago buildings house over 353,000 employees throughout the Loop, River North, Gold Coast and O’Hare submarkets, and are responsible for nearly 80% of total consumer spending in the Loop alone. These same employees contribute $3.5 billion to Illinois and add over $1 billion in new taxable personal earnings annually.

Solving this dilemma by over-burdening commercial real estate with excessive taxes is in nobody’s best interest. It will cause the economic engine to sputter, and in another year or so, there will be a new financial crisis confronting the City.

In the weeks to come, BOMA/Chicago will be analyzing specific proposals and our legislative team will be working diligently in Chicago and Springfield to protect the interests of commercial real estate. We promise you we’ll be critical and thorough and continue to keep you updated along the way.

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Lawmakers must make tough decisions to address pending fiscal crises

Despite a recent report ranking Illinois number two in the nation in business creation, it’s no secret there are looming fiscal issues on the city, county and state levels that will have a long-term impact our buildings, tenants and the entire business community.

And while the solutions won’t be easy, these fiscal challenges must be faced head-on and our political leaders will have to make some tough decisions.

Though CBS Chicago recently reported the City of Chicago is facing a $1 billion shortfall in its operating budget and a combined $20 billion pension budget deficit, we’re happy to see that Mayor Rahm Emanuel will present the 2016 City of Chicago budget to the City Council one month early in an effort to address the pension crisis and encourage more debate and cost-cutting ideas.

We were also disheartened to read in the Chicago Sun-Times that Chicago Public Schools (CPS) has hit its breaking point and can’t make an obligated pension payment this month without significant classroom cuts. The nation’s third largest school system has never missed a pension payment, and Ernst & Young recently recommended the City Council enact two different property tax increases for the schools totaling $450 million, even if CPS makes drastic budget cuts, and receives pension relief and additional requested state funding. In an effort manage the fiscal crunch, the Chicago Board of Education approved more than $1 billion in new borrowing on Wednesday.

And on the Cook County level, due to a lack of action by Springfield on the County’s proposed pension legislation among other challenges, the Chicago Tribune reports that Cook County Board President Toni Preckwinkle is proposing a sales tax increase. If there is enough support for the tax hike, it would likely go into effect in 2016.

While these proposals are all preliminary and subject to change, it’s important to note that BOMA/Chicago will be advocating on behalf of the office building industry on the city, county and state levels. There’s no doubt our local and state governments are facing fiscal crises that will require some shared sacrifice, but the commercial building industry should not be expected to shoulder all the burden. Our legislative team will monitor these proposals and voice our support for proposals that will ultimately enhance our local economy and continue to sustain a thriving business environment.

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BOMA/Chicago Charged Up about Exelon’s $1.6B Ratepayer Increase Legislation

Exelon, ComEd and Clean Jobs Coalition all proposing Increased Rates

Recently BOMA/Chicago Government Affairs Director Ron Tabaczynski and I were in Springfield where I testified before the Illinois Senate’s Energy and Utilities Committee on behalf of BOMA/Chicago in opposition to three energy bills. If passed, the legislation would result in massive energy cost increases for Illinois’s commercial real estate industry.

Exelon was behind the first of the three bills earlier this year asking ratepayers to subsidize their nuclear plants via a new low carbon energy tax. Subsequently, both ComEd and the “Clean Jobs Coalition” sponsored bills of their own in order to claim their pieces of the ratepayer-subsidized pie.

Before delving into the legislation, it’s important to point out that Exelon Corporation is a publicly traded utility services company (EXC) with a current market cap of about $28.5 billion. Effectively, Exelon controls both sides of the coin through its ownership and control of northern Illinois’ wholesale energy supply as well as the delivery or demand side through its ownership of ComEd. And don’t forget that virtually everything Exelon and ComEd do – including their massive public relations campaigns and lobbying efforts to drastically increase our energy utility costs – are essentially funded by ratepayers through their energy bills. That’s right, not only are we subject to major rate increases, we’re actually funding Exelon and ComEd’s campaigns to make those increases happen.

So first, let’s review the Exelon bill (HB 3293/SB 1585). This legislation hits residential, business, and governmental consumers with a whopping $1.6 billion cost to subsidize some or all of Exelon’s nuclear plants through low carbon energy credits. Due to a cap in place on the residential but not commercial ratepayers, commercial customers will once again be hit the hardest. In fact, it’s estimated that BOMA/Chicago members and tenants alone will be stuck with a combined bill of at least $55 million in extra costs.

The second piece of legislation is known as the “Clean Jobs” bill (HB 2607/SB 1485), but don’t be duped by the name. It’s essentially a counter-grab by the renewable energy consortium that adds a ratepayer subsidy for publicly traded wind and solar companies. The bill also constrains market development and innovation by dictating solutions to achieve cleaner energy without addressing consumer roles or behavior in the marketplace, which is especially troublesome given BOMA/Chicago’s strong record on energy efficiency and sustainability measures.

The last but certainly not least detrimental is the ComEd legislation (HB 3328/SB 1879). While the first two bills attack ratepayers from the supply side of the equation by increasing rate-payer subsidies to publicly traded companies and mandating energy policies, this legislation attacks from the demand side by effectively providing ComEd with more monopolistic ownership and control over the electric system. Not only will this legislation introduce new costs and annual electric rate increases, it will also generate untold costs for re-regulating the market while stymying innovation in Chicago. Like the other two bills, this legislation does not allow consumers to access their own information so that they may play a role in market innovation and job creation, let alone contribute to a more sustainable environment.

Frustratingly, all three bills completely miss the point. To truly achieve a clean energy policy that actually reduces carbon emissions, consumers, the customers that would pay for all this, must have the ability to affect their own destiny. All three bills fail because they lack sophisticated consumer input and programs and suppress the development of any real market-based innovation.

All energy consumers, particularly sophisticated customers like BOMA/Chicago members, should have the right to access their own energy data, as well as measure, verify, and address their own reductions in carbon and energy efficiency programming, instead of being viewed by the legislature and the environmental groups as simply a source of funding for their own projects. Accordingly, BOMA/Chicago opposes these bills, and we will update you as events progress.

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Rauner’s Proposed Property Tax Freeze: The Devil’s in the Details

In last week’s State of the State address, Governor Bruce Rauner offered up a bold agenda to turn the state around while focusing on efforts to make Illinois competitive again. Some of his key points included increasing education funding, raising the minimum wage, reforming workers’ compensation and unemployment insurance, “modernizing” the sales tax, hiring more prison guards – and providing property tax relief.

Here at BOMA/Chicago, you can bet our ears perked up when Governor Rauner declared that the property tax burden is one of the biggest impediments to growth and proposed to freeze them for two years.

As our building owners and managers know only too well, property tax is one of the largest and least controllable expenses for commercial office buildings and continues to be an oppressive burden for commercial real estate in the City of Chicago. Our buildings pay some of the highest property taxes in the nation, with only marginal exceptions in New York City and Washington, D.C. According to our most recent Economic Impact Study, property taxes account for as much as 75% of a building’s operating expenses and consume as much as 25% of a building’s gross revenue.

More importantly, despite Chicago being a market where high commercial office rental rates are not the norm, property taxes consume a disproportionate share of gross operating expenses. Two leading sources of tax trends in U.S. markets maintain that Chicago has either the highest or second highest ratio of property taxes to operating expenses.

But let’s not celebrate a property tax freeze too soon. The harsh reality is that our state’s financial condition is deplorable with a Fiscal Year 2016 budget deficit around $9 billion, projected first year revenue loss from the temporary income tax hike rollback at $3.9 billion, and measures to shore up state employee pension plans reliant on a ruling by the Illinois Supreme Court. Not to mention the additional funds necessary to invest in education and hire more prison guards as called for by the Governor.

We also want to be careful that we’re not robbing Peter to pay Paul by exchanging a property tax freeze for a “modernized” sales tax – which more than likely means extending sales tax to services – or any other taxes or fees that could be just as burdensome on the commercial real estate industry as a property tax hike.

The Governor will deliver his Budget address on February 18, and we look forward to hearing more details about how he will implement a property tax freeze given the state’s current fiscal condition and we will continue to monitor this important issue for our members.

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Stay Safe During Bitterly Cold Temperatures and Dangerous Snow Conditions

By Mark Peterson, External Affairs Officer, FEMA Region V

CHICAGO – Dangerously low temperatures and accumulating snow are in the forecast for much of the Midwest and the U.S. Department of Homeland Security’s Federal Emergency Management Agency (FEMA) wants individuals and families to be safe when faced with the hazards of cold temperatures and winter weather.

“Subfreezing temperatures and wind chills can be dangerous and even life-threatening for people who don’t take the proper precautions,” said Andrew Velasquez III, FEMA Regional Administrator. “It is important for everyone to monitor their local weather reports and take steps now to stay safe, whether traveling or at home, during times of extreme cold temperatures.”

During cold weather, you should take the following precautions:

  • Stay indoors as much as possible and limit your exposure to the cold;
  • Dress in layers and keep dry;
  • Check on family, friends, and neighbors who are at risk and may need additional assistance;
  • Know the symptoms of cold-related health issues such as frostbite and hypothermia and seek medical attention if health conditions are severe.
  • Bring your pets indoors or ensure they have a warm shelter area with unfrozen water.
  • Make sure your vehicle has an emergency kit that includes an ice scraper, blanket and flashlight – and keep the fuel tank above half full.
  • If you are told to stay off the roads, stay home. If you must drive, don’t travel alone; keep others informed of your schedule and stay on main roads.

You can find more information and tips on being ready for winter weather and extreme cold temperatures at http://www.ready.gov/winter-weather.

FEMA’s mission is to support our citizens and first responders to ensure that as a nation we work together to build, sustain, and improve our capability to prepare for, protect against, respond to, recover from, and mitigate all hazards.

Follow FEMA online at twitter.com/femaregion5, www.facebook.com/fema, and www.youtube.com/fema.

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