CHICAGO—BOMA/Chicago has come out against the proposed expansion of a Central Loop neighborhood improvement district, which now covers buildings on both sides of State St., into the East Loop. Officials from the organization, which represents most downtown building owners, say it will create another tax for owners without providing needed services.
The City of Chicago contains dozens of such special service areas, and the one along State St., called SSA #1, is the oldest. The Chicago Loop Alliance, the nonprofit that administers SSA #1, has proposed a 15-year renewal, beginning in 2015, and an extension of the area boundaries to take in properties along Wabash Ave., the west side of Michigan Ave., and the east side of Michigan north of Randolph St. and south of the river. If approved by the city council, the owners would pay into a fund that CLA uses to shovel snow, pressure wash sidewalks, install landscape improvements like planters and medians, and install seasonal decorations, among other tasks.
Officials from CLA say the expansion will help improve the East Loop, a submarket that has struggled to attract tenants. According to data from US Equities, the vacancy rate, now at about 16%, has remained largely unchanged since 2006. The alliance will host a community meeting on Wednesday, May 21, from 8:00 AM to 10:00 AM, at University Center Chicago, 525 S. State St. and present their proposal.
Michael Cornicelli of BOMA/Chicago tells GlobeSt.com that SSA #1 currently collects about $3 million in annual revenue, and that CLA's new proposal would boost that to a total of more than $7 million, with some Michigan Ave. owners seeing a property tax increase of $250,000.
“We don't see the values of what the Chicago Loop Alliance is providing and we would like to see the entire SSA expire at the end of 2015. Nearly all of these services are things that our buildings provide for themselves. We can do it faster and more efficiently.”
He admits that there might be some truth to CLA's contention that an SSA can boost the value of certain neighborhoods by providing general upkeep and disciplining errant property owners. But only nine BOMA/Chicago members lie with the current boundaries, and the expansion will take in about 38 BOMA members, many of whom own valuable class A properties along Michigan Ave. “Our owners and members do this for a living.” After a snowstorm, for example, most will say, “'I want to have my guy out there and do it up to our standards.'”
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
