Demystifying the State Street SSA and its Impact on BOMA/Chicago Buildings
By Amy Masters, BOMA/Chicago Director of Marketing and Communications
If you received email promotions over the summer for ACTivate networking events hosted by the Chicago Loop Alliance (CLA), you may have wondered … what is the CLA? What does this group do? Does the organization represent the State Street corridor, the entire central business district, or both?
Guess what: you’re not the only one who’s confused. So we thought it would help to provide some background about the CLA, especially in regard to its management of the State Street Special Service Area (SSA) and its impact on BOMA/Chicago buildings, and also explain how BOMA/Chicago and the CLA work together.
The CLA was founded in 2005 following a merger of the Central Michigan Avenue Association and the Greater State Street Council. While the CLA has traditionally focused much of its programming in the East Loop, the group occasionally hosts networking and educational events in other parts of the Loop as well. The CLA has over 250 members including businesses, organizations and individuals located within downtown Chicago.
Perhaps most important to BOMA/Chicago building members, the CLA manages the State Street SSA #1. An SSA is a local tax district that funds expanded services and programs (such as security, landscaping and cleaning) through an additional localized property tax levy within a specific area. Services paid for by SSA funds should be in addition to standard services already being provided by the City. The State Street SSA is the only SSA in the Loop and one of 54 SSAs in the City of Chicago.
An SSA is similar to a Business Improvement District (BID) used in other cities, with one major difference – a BID places control with the building owners and managers paying the levy to ensure the services provided add value to the buildings and are consistent with the owners’ needs and interests. Instead, an SSA allows the Mayor to appoint commissioners to oversee and recommend the annual services, budget and service provider agency to the City. This means that building owners and managers in the State Street SSA have little say over the prioritization of services and selection of vendors, including rates and quality of work.
The State Street SSA was originally created in 1977. A renewal enacted in 2015 continues the SSA until 2030. Boundaries for the area include property on both sides of State Street between Wacker Drive and Congress Parkway. Government buildings do not pay into the SSA, but do reap the benefits from the extra taxes paid by privately owned buildings.
The 2018 SSA agreement indicates the State Street SSA levy collected more than $2.6 million in 2017, with 2018 funds allocated for public way aesthetics, customer attraction, economic/business development, and safety programs, in addition to SSA management and personnel. The 2017 SSA tax rate was .309 percent of the equalized assessed value, which equates to an annual assessment of nearly $30,900 for a building valued at $10 million. That tax levy appears as a distinct line item on the property tax bill of any taxable real estate within the SSA boundaries.
Property management teams have commended the CLA for their work to beautify the State Street corridor, such as planters, landscaping, and the CLA street teams. Yet many buildings still rely on their own services, including snow removal and power washing, because they are faster and more reliable. Some property managers would like to see greater transparency and communication related to services, costs and outcomes. Many feel the SSA places a disproportionate tax burden on office buildings, while mainly benefiting retail stores on the ground floor. Views from our building members also can differ based on building type: class A buildings take pride in the first-rate amenities and services they offer tenants, while class B and C buildings may appreciate the extra help the State Street SSA provides.
In 2014, BOMA/Chicago successfully opposed the CLA’s efforts to expand the SSA’s boundaries which would tax more buildings located outside of State Street, including buildings as far away as the Aon Center. Most buildings in the proposed expansion area resisted paying for services that wouldn’t directly benefit their building and tenants. Building members also remain confident they can provide many of the same services as the SSA that are better, faster and cheaper. While BOMA/Chicago values CLA’s efforts through its management of the SSA to beautify and promote the State Street corridor – a very unique retail area in the Loop – BOMA/Chicago will continue to oppose future expansion proposals and drive the debate about what is the best and fairest approach.
Despite a difference in opinion over the SSA expansion, our two groups share information, attend each other’s events, and meet regularly. The CLA and BOMA/Chicago have a mutual interest in serving building members, enhancing security and promoting economic development within the Loop, and we look forward to working together in the years ahead.