By Michael Cornicelli, BOMA/Chicago Executive Vice President
The Chicago Loop Alliance thinks they know better than you how to operate a commercial office building, fill vacant space and increase asset value. And they want the City of Chicago to let them show you how by raising your real estate property taxes by 5% for the next 15 years. Sound like a good idea to you? Yeh, I know. It didn’t sound like such a good idea to me either.
But that’s exactly what the CLA wants to do.
Since 2005, the CLA has been managing the State Street Special Service Area (SSA #1), the boundaries of which include all properties with frontage on State Street between the Randolph Street and Congress Parkway. SSA #1 is due to expire at the end of 2015, so the CLA is now proposing an early extension of its term for another 15 years and an expansion of its boundaries to add in all the properties from State Street to the east side of Michigan Avenue. If adopted, the new boundaries would subject those newly added properties to an additional property tax levy to fund the SSA that would increase their annual property bills by 5% for 15 years.
The CLA has proposed that the renewed and expanded SSA would impose a first year tax levy of 0.3496% of the Equalized Assessed Value of property within the boundaries. That’s roughly $10,000 for each $1 million of EAV. Many of you have told us, and we agree, that a tax of that magnitude bears no relationship to the value of services your buildings might receive from SSA #1.
Many but not all of our impacted members have told us that you do not want or need what the CLA is offering at any price. But their proposal also comes at a very difficult time, as all of us are facing the likelihood of new tax burdens to fund pension reform in Chicago – a point we have made abundantly clear to CLA. Our leadership believes that those pension reforms are far more important to the economic health of our city and our assets than the lower priority items that a new SSA would provide.
Despite the fact that those of you who will pay for most of the proposal do not want it seems lost on the CLA. They continue to press their proposal and have become even more strident in their positioning than when our conversations first began. They want to substitute their judgment for yours, the owners and managers of those properties, on what’s best for your buildings.
Unless BOMA/Chicago and our impacted members take strong steps to stop this ill-advised and unwanted proposal, the CLA might just succeed. We simply cannot let that happen.
If you agree, please call Ron Tabaczynski or me in the BOMA/Chicago office and talk with us about what you can do. We have already begun BOMA/Chicago’s work on this, but we need your help. Also, please share your thoughts by posting a comment below. Time is of the essence.