Commercial property tax increase OK’d to fund Mag Mile security improvements
Nearly a year ago, Mayor Lori Lightfoot condemned it as “aldermanic prerogative at its worst” when two downtown Council members blocked plans to approve the taxing district known as a “special service area.”
After an unrelenting string of high-end robberies along Chicago’s premier shopping strip, a City Council committee agreed Wednesday to raise commercial property taxes along North Michigan Avenue to bankroll security improvements.
It was nearly a year ago to the day that Mayor Lori Lightfoot condemned as “aldermanic prerogative at its worst” the decision by downtown Council members to block plans for the taxing district, known as a “special service area.”
The mayor argued then that commercial properties fronting the Magnificent Mile were “hurting” after a dramatic drop-off in sales and foot traffic and that Ald. Brian Hopkins (2nd) and Brendan Reilly (42nd) were wrong to stop them from taxing themselves to shore up their defenses.
On Wednesday, the Council’s Committee on Capital and Economic Development approved the commercial tax hike after opposition from Hopkins and Reilly melted away.
No longer was Reilly slamming the “truncated, hurry-up-and-approve-it” creation of the taxing district, or saying a “significant portion” of the money generated by the tax hike would go toward “salary, contracts, personnel and other operating expenses.”
He said he and Hopkins had opposed the taxing district due to “concerns about process, about engagement with stakeholders ... the way the budget was put together and the priorities that it itemized,” Reilly said.
“The Mag Mile Association and the Department of Planning did a very good job after that point properly socializing the plan, getting more buy-in from impacted property owners. And they also completely re-worked their budget proposal, which now prioritizes public safety investments over marketing events and programming.”
Reilly said that’s why he now supports this taxing district, calling it “short term” and a “stop-gap effort to provide some immediate assistance” and “important investments in safety” along the city’s premier commercial corridor.
“After this, the hope is the city can persuade the General Assembly to adopt business improvement district legislation because, frankly, I think that is a far stronger economic tool with better governance,” he said.
The special service district will be in place for three years, and the service tax is applied only to commercial buildings within the district boundaries. That tax will not exceed 0.05% a year on the equalized assessed value of the taxable property.
It’s expected to bring in about $742,000 a year, with about $472,000 if that going toward public safety initiatives.
Hopkins agreed the now-revised “initial presentation did fail to prioritize the budget in a manner that” local residents and businesses “insist upon.”
“What started out as an objection to the process actually wound up vastly improving the final product in terms of its prioritization for public safety measures and other improvements in the community,” he said.
Hopkins pointed to the ideas trotted out by the Urban Land Institute for re-imagining North Michigan at a time when vacancy rates top 20%.
As Sun-Times columnist David Roeder reported this week, those ideas include: introducing Parisian-style cafes and independent, one-of-a-kind shops; building a pedestrian bridge to Oak Street Beach and creating better connections to Navy Pier.
Other possibilities include breaking up the mile-long shopping district into branded sections, including one mixing show business with retail sales.
“Clearly there’s a price tag to all of the great ideas that are coming out of that process. Many of them are exciting. Many of them are compelling. Many of them, at least initially, I’m ready to support,” Hopkins said.
“But it always raises the question: ‘How are you gonna pay for these great ideas?’ And something like this SSA can be at least a part of that answer. And that wasn’t something we contemplated a year ago when this idea first came to us.”
Without mentioning Lightfoot and her mince-no-words criticism, Hopkins said: “Even though there was some frustration” with the delay, it “was for the sake of vastly improving this proposal, which has been accomplished. I’m very pleased with the outcome. It was a year worth waiting for.”
A year ago, Hopkins was not so diplomatic.
He responded to Lightfoot’s “aldermanic prerogative at its worst” remark by accusing the mayor of trying to “achieve dictatorial rule of Chicago” that has been stymied “not because of aldermanic prerogative, but because the legislative branch is a co-equal branch of government.”
“That’s a lesson she needs to learn and needs to learn quickly,” Hopkins said on that day.