Elected officials in Chicago are looking to place a tax on businesses within the city’s iconic Magnificent Mile that had been subject to looting just months earlier.
The levy is aimed at helping to lure in shoppers back to the famed district after a summer of destruction, although it comes at a time when already cash-strapped businesses around the nation are trying to weather the pandemic.
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The proposed emergency special tax, also known as the Special Service Area or SSA, would impose a less than 0.05% levy on commercial properties along North Michigan Avenue, according to city documents. The special taxing district would generate between $700,000-$800,000 a year which would be spent on an increase in private security and enhance a business’ attractiveness, according to FOX Business’ Grady Trimble.
The Magnificent Mile is an upscale section of Michigan Avenue, running from the Chicago River to Oak Street filled with retail, hotels and restaurants.
The “special services within the area, which may include, but not limited to: customer attraction, public way aesthetics, sustainability and public place enhancements, economic/business development, public health and safety programs, and other activities to promote commercial and economic development,” according to city documents.
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Kimberly Bares, CEO of the Magnificent Mile Association, told Block Book Chicago that the proposed tax is a necessary step in rebuilding the “economic engine of the city.”
Over the summer, “Hundreds” of businesses have been impacted by the recent looting following a police-involved shooting, causing a ripple effect that is being felt by workers, tourists, and the hospitality industry, according to the city’s Chamber of Commerce President Jack Lavin.
Although the application process to establish a new SSA that can take upward of two years, the city’s planning department waived certain requirements in an effort to expedite the process, according to Block Book Chicago. The expedited process included nixing required signatures from at least 20% of affected property owners, the outlet reported.
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However, some officials found fault with the proposed tax as well as with the process of expediting it.
Mitchell Feldman, general manager of Water Tower Place, told the outlet the expediting the proposal “added confusion to the process.”
Feldman argued that the SSA will “increase the financial strain under these trying circumstances.”
The businessman further said that the move risks forcing businesses to leave the area altogether and would deter “new retailers from entering the market.”
However, Mary O’Connor, a deputy commissioner in the Planning Department, told the outlet that the “short-term SSA is designed to provide more immediate funding to address unforeseen circumstances.”
She argued that it would also provide a “bridge of up to three years until a more permanent, long-term solution can be developed and implemented.”
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