CHICAGO — Supporters of a proposed new taxing district along the Magnificent Mile say it would help rebuild the “tarnished” reputation of the famed shopping district, but without local aldermen on board, its status is in doubt.
Following summer looting, the Magnificent Mile Association worked with the city’s Department of Planning and Development to create plans for an “emergency” taxing district to lure wary shoppers back to the city’s most lucrative retail stretch.
The taxing district, known as a Special Service Area or SSA, would impose a less than 0.05 percent property tax on commercial properties along Michigan Avenue from the Chicago River to Oak Street. The tax revenue would be spent on increased private security, business attraction efforts and streetscaping. For 2021, the district would have a proposed budget of $764,714, and the district would remain in place for three years.
Officials shifted the SSA’s southern boundary from Randolph Street north to the river based on community feedback. The updated plan was presented during a virtual public hearing of the Committee on Economic Development Friday.
But, citing the “truncated” application process, Ald. Brendan Reilly (42nd) said he’s currently unwilling to support the district’s creation.
“I wasn’t aware that an expedited SSA process even existed until this proposal was brought to me,” he said. “It is always my effort to build consensus, especially when a group of property owners are considering imposing an even higher property tax on themselves.”
There are major stakeholders on Michigan Avenue who have concerns about the taxing district, Reilly said.
“I think it will be important for the applicant to spend some time with those stakeholders to try and see if they can build some consensus and support,” he said.
Ald. Brain Hopkins (2nd) echoed Reilly’s comments, saying the plan needs more work before he can support it . The district spans both wards.
Typically, the city requires a lengthy application process to establish a new SSA that can span two years. But the planning department waived certain requirements, including gathering support signatures from at least 20 percent of affected property owners, to accommodate the expedited timeline.
Former Ald. Mary O’Connor, now a deputy commissioner in the Planning Department, defended the expedited timeline, saying it was necessary to get the district in place to collect tax revenues in 2021 and provide a funding mechanism following coronavirus shutdowns and “a weekend of unanticipated unrest and looting.”
“This short-term SSA is designed to provide more immediate funding to address unforeseen circumstances, while also providing a bridge of up to three years until a more permanent, long-term solution can be developed and implemented,” she said.
Mitchell Feldman, general manager of Water Tower Place, also opposes the SSA plan on “the grounds of both process and substance.”
The expedited timeline “added confusion to the process,” he said.
“The (SSA) will only increase the financial strain under these trying circumstances…the SSA accordingly risks forcing private, cash-strapped businesses to leave Michigan Avenue while simultaneously deterring new retailers from entering the market.”
Other influential stakeholders and property owners in the district spoke in support of the measure during the meeting.
Kimberly Bares, CEO of the Magnificent Mile Association, said downtown businesses were not only harmed by looting and unrest, but by a “constant disruption from frequent protests and demonstrations,” too.
The SSA is necessary “if we are to remain magnificent and have any hope of rebuilding so that we can serve a vital role in long term recovery as the economic engine of the city,” she said.
Lee Golub, managing principal of real estate giant Golub & Company, said the shopping district’s reputation had been “tarnished” by the civil unrest over the summer.
“Our economic engine of the city, Michigan Avenue, is in the midst of a PR nightmare and a downward trend, that requires a coordinated and imaginative approach to its future direction,” he said. “We need this SSA and the corresponding funding programs that will be directed by property owner commissioners to help right the ship.”
No vote was taken Friday, but the hearing was a necessary step before an ordinance formally creating the district can be introduced. It’s uncertain if an ordinance will be introduced without the support of the local aldermen,
In order to begin collecting revenue in 2021, an ordinance must be introduced and approved by the City Council by Dec. 29, planning department spokesman Peter Strazzabosco recently told Block Club.
Also on Friday, the committee held hearings for a new SSA along Oak Street in the Gold Coast, from Michigan Avenue to Rush Street. Unlike the Magnificent Mile district, the application for the Oak Street SSA was submitted in November 2019.
During the meeting, Reilly praised the “robust” community engagement process undertaken by the applicants, Oak Street Council. If approved, the Oak Street SSA would have a 2021 budget of $272,000.
Hearings were also held to expand the scope of two existing SSAs in the Rogers Park neighborhood.
Currently, there are 53 SSAs across the city.
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