Chicago Landlord Group Proposes Taxing Itself To Boost Sagging Loop

Just days after Mayor Brandon Johnson folded on a $300M property tax increase, a downtown landlord group is floating a self-imposed tax that would see commercial property owners chip in to fund improvements in the Loop.

The Building Owners and Managers Association of Chicago is exploring creation of a business improvement district to kick-start the vitality of the central business district, where office vacancy has risen to almost 24% and retail vacancy sits at 30%. 

The BID could fund beautification and promotional efforts, upgraded security, homeless and youth services, and light capital improvements, according to a BOMA release.

“BOMA/Chicago building members comprise most of the Loop’s commercial property, and many in our community have expressed interest in the potential of a BID to help revitalize downtown,” BOMA Chicago Executive Director Farzin Parang said in a release, adding the organization plans to tread carefully in formulating the tax plan.

“At the same time, our local industry is struggling under the weight of rising energy costs and the country’s highest commercial property taxes — and we know that any additional assessments for a BID must be considered extremely cautiously,” Parang said.

Gov. J.B. Pritzker signed legislation this summer enabling BIDs in Chicago commercial corridors. The mechanism would be similar to the city’s Special Service Areas, which already allow landlords to raise funds and control how they are allocated and spent.

BOMA did not offer specific details on exactly how the tax would work or how much it would levy on owners.

It said it had filed paperwork with the city’s Department of Planning and Development giving notice that it would propose the BID and commence conversations with owners of properties bounded by Desplaines Street on the west, Harrison Street on the south and Columbus Drive on the east. The northern boundary of the district would follow Kinzie Street east from Desplaines Street to State Street, then follow the Chicago River from State Street to Columbus Drive. 

“We are the natural organization to explore this new tool with our members and the public,” Parang said in the release.

BIDs have been around since the 1960s, according to a federal fact sheet. New York City has the largest BID program in the nation, with 75 such districts investing about $194.5M annually into city neighborhoods.