22-Dec-20 – Concern over how fast it would be created and how much of its budget would be spent on operating expenses – instead of helping businesses devastated by riots and looting – discouraged 42nd Ward Alderman Brendan Reilly from supporting a special tax levy on the Magnificent Mile.

The plan would have increased property taxes on both sides of North Michigan Avenue, from the Chicago River north to Oak Street, to pay for increased security. The proposed ordinance, which did not have the support of 2nd Ward Alderman Brian Hopkins, either, stalled in the City Council’s Committee on Economic, Capital, and Technology Development on December 14.

In his newsletter to constituents on Friday, Reilly said the proposal was to create a Mag Mile Special Service Area in five months, much quicker than the usual 12-15 months needed to establish an SSA.

“This process waived a number of crucial checkpoints when creating a new taxing district, including the signature requirement to prove a base-level of support among those being taxed, and a 90-day public comment period,” said Reilly (left). Photo by Sarah Matheson

Another issue was how the SSA’s 2021 budget would be spent. Reilly says “a significant portion” of the $742,033 budget would pay operating expenses of the Magnificent Mile Association, which would manage the SSA, instead of helping with infrastructure improvements needed to increase security.

Another $100,000, he says, would be spent on pedestrian counters – employed in the State Street SSA, but, says Reilly, “not a good investment right now.”

Reilly says the SSA as proposed would not benefit businesses along the Mag Mile directly, and property owners would simply pass their higher property taxes on to their tenants. (Right) Boarded storefronts along Michigan Avenue.

“As we’ve seen before, commercial property owners can absorb the increase in taxes by raising rents on tenants, many of which are already struggling to pay the rent. An unintended consequence of a new tax may be that established retailers along [Michigan Avenue] could be forced out.”

The proposal, however, “merits further discussion” in 2021, Reilly says, between him, Mayor Lori Lightfoot, Alderman Hopkins, and the Magnificent Mile Association.

“I think there is a way for us to build greater consensus and, frankly, a more responsible budget if we take the time that is necessary when creating an SSA,” says Reilly. “Taxpayers deserve better than a rushed proposal.”