Landlords in the Chicago Loop could choose to impose a tax on themselves for the greater good.
The Building Owners & Managers Association of Chicago is pushing for a business improvement district, or BID, allowing commercial property owners to collectively fund security, infrastructure upgrades and attracting tenants, Crain’s reported.
Facing record-high office and retail vacancies, Loop landlords have shown increasing interest in BID proposals, despite landlords’ financial burdens from high energy costs and property taxes.
“We already have the highest commercial property tax in the country, so the purpose of this process is to find out, ‘does this make sense?’” BOMA Executive Director Farzin Parang told the outlet.
Landlords would vote on the formation of the BID, and only they would pay the associated tax. Residential properties would be exempt.
Gov. J.B. Pritzker signed legislation in July to page the way for BIDs in Chicago. Unlike special service areas, which have a smaller geographic reach, BIDs offer the flexibility to encompass larger zones, potentially reducing costs through economies of scale.
BOMA is in talks to create boundaries for the district, which could stretch from Desplaines Street to Columbus Drive and Kinzie Street to Harrison Street.
Improving safety has emerged as a priority for the proposed district. The perception that crime is high in the Loop hinders office and retail leasing, Parang said.
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The Magnificent Mile Association, which worked with the Chicago Loop Alliance to support the state legislation, is also exploring a BID for the North Michigan Avenue corridor.
However, the earliest a Loop BID might take effect is 2026. The lengthy timeline is due to the complexity of implementing these districts, which require extensive community engagement, City Council approval and mechanisms for tax collection.
— Andrew Terrell