After Tense Tax Battle, Experts Are Optimistic CRE Can Mend Fences With Brandon Johnson. But Is He?

Now that a contentious battle between the city of Chicago and the commercial real estate industry over a proposed real estate transfer tax that voters appeared to reject is over, a question remains: What will the relationship between the parties look like going forward?

The failed tax was voters' first rebuke of Mayor Brandon Johnson's progressive policies since he took office last May, and large CRE interests poured hundreds of thousands of dollars into mailers and ads to ensure the ballot measure wouldn't pass Tuesday.

While some in CRE hope a rift that opened up during the punishing lead-up to the vote can be repaired, Johnson was vowing to “punch back” at a fiery press appearance Wednesday.

As of 3 p.m. Thursday, the Associated Press and other news outlets hadn't called the race, but supporters and opponents of the tax have both proceeded as if voters' denial of the referendum was final.

CRE academics told Bisnow they are optimistic that the CRE community can mend fences with Johnson's administration after their sometimes acrimonious battle over the transfer tax and that they can work together to reinvigorate downtown, advancing both parties' interests.

If the city and CRE can join to protect and revive the central business district, the city will have additional revenue streams to execute on its priorities, said Collete English Dixon, executive director of the Marshall Bennett Institute of Real Estate at Roosevelt University.

She said she was hopeful the city administration is open to conversations about working with CRE.

“We all realize that we have a very symbiotic relationship, and yes, it did get a bit tight there in this process,” English Dixon said. “But I believe industry sincerely wants to help the city be successful. While this was not a good thing, this should not be the sort of disagreement that makes it impossible for us to look at what really needs to be focused on.”

The lead-up to the election definitely hurt the relationship between CRE and the city, said Christopher Berry, a professor at the University of Chicago’s Harris School of Public Policy and faculty director of the Mansueto Institute for Urban Innovation. But Berry still believes the business community and the administration can repair it. 

“There are, within some circles, pretty damaged relations,” he said. “There are some other, more positive signs as well. One hopes that those relations can be salvaged and they can focus on a positive agenda of growing and revitalizing downtown.”

The way opponents of the referendum have responded indicates they are open to working with the city to address homelessness in another form, Berry said.

BOMA Chicago Executive Director Farzin Parang in a statement late Tuesday expressed gratitude for voters who spoke out against “constant real estate tax increases,” while also asking to be a part of the discussion to help address homelessness in the city. 

“Homelessness is a critical problem, and all stakeholders must be at the table to solve it,” Parang said in the statement. “We hope that both sides of this issue will be invited together to develop a detailed plan that provides genuine support to the homeless while bolstering our city's competitiveness and protecting all the workers who depend on it.”

It is unclear if Johnson is on the same page. 

At a testy press conference Wednesday, Johnson called referendum opponents' attempts to paint the transfer tax vote as a referendum on his leadership “cowardly.” He said everyone was entitled to a position on the referendum but that he was frustrated he couldn't defend himself during the process.

Johnson also vowed that the fight wasn't over.

“I'm still here, I'm still standing,” Johnson said at the press conference, tapping his hands on the lectern. “I will be punching back.”

UPDATE FROM CITY HALL: Mayor Johnson hosts a media availability. #ChiCityCouncil https://t.co/z9sWwFdyWP

— Mayor Brandon Johnson (@ChicagosMayor) March 20, 2024

Johnson also expressed frustration that he wasn't able to campaign more for the issue, citing constraints on how much he was allowed to do because of rules on referendum campaigning. 

“I'm a gamer. Heck, yeah, I wanted to be out there,” Johnson said. “When you're a gamer and you knock down shots and you can't be out on the court? ... Absolutely, I wanted the ball. That sucked.”

Johnson said those who would have seen the greatest impact from the tax “understood the assignment” and recognized the importance of the referendum. 

“The neighborhoods who are most impacted by this issue, they knew exactly what they were voting for,” Johnson said. “I don't believe it's a coincidence that where there are more yeses, it's where there's a greater concentration of those who are unhoused.”