City policy does not allow residential properties to be left out of proposed Jeff Park taxing body


While residents at a May 14 community meeting did not dispute the merits of a proposed taxing body to help revitalize the Jefferson Park business district, several questioned why residential property owners were being required to pay the tax.

State law requires the boundaries of a special service area, a local taxing body that is typically used to beautify commercial districts, to be contiguous, but not all municipalities interpret that requirement the same. In Evanston, condominiums which are located above storefronts can be left out of a service area, but in Chicago, all residential and commercial properties in the affected area are subject to the property tax.

City Department of Planning and Development assistant commissioner Mark Roschen said that the city’s policy of not excluding any parcel has been reviewed by city’s legal staff and is “based on case law.” In Evanston, the exemption does not apply to all residential properties.

The Jefferson Park Chamber of Commerce is proposing to create a service area that would raise at least $200,000 annually for area improvements, including the recruitment of new businesses. Mayor Rahm Emanuel would appoint a commission of local property owners who would set a budget and tax rate each year for the service area, and the chamber would be the administer for the service area.

Most of the funds would come from commercial properties even through 501 of the 747 properties located within the boundaries of the service area are residential. The area primarily covers Milwaukee Avenue between Montrose Avenue and the Kennedy, and Lawrence Avenue between Austin Avenue and the expressway.

The average condominium owner would pay about $162 a year in SSA taxes, and the average single-family home owner would pay about $300, while commercial property owners would pay an average of about $1,100, said Noah Gordon of PLACE Consulting, which the chamber hired to assist with the SSA application to the city. Most of the residential properties in the proposed area would be condominiums and apartment buildings, along with five single-family homes, Gordon said.

The Jefferson Park Neighborhood Association has approved a resolution calling any residential property owner to have the option of being exempted from the service area.

Association board member Ron Ernst said that the tax places an unfair burden on home owners on a fixed income and that the SSA proposal should be halted unless an accommodation can be made for residential owners. Ernst said that the chamber should lobby the city to change its SSA policy.

When the city formed the Jefferson Park Tax Increment Financing District in 1998, residential properties were removed from the TIF area after residents objected, and there is no reason why the city cannot make the accommodation for service areas, Ernst said. TIF districts are primarily designed to fund large infrastructure improvements, while service areas provide an array of beautification and marketing services to an area.

A condominium owner said that she would like to know what services the chamber would be providing for her building so that her home owners association could stop charging members for those services as part of their monthly dues. Service areas are sometimes used to clean and shovel sidewalks.

Chamber president Lionel Rabb said that the chamber wishes that there was an option to exclude residential properties and that some of the residential units are included in the service area because the chamber wanted to include in the Lawrence-Austin business district in the SSA in order to provide better services to those merchants. There are many apartment and condominium buildings on Lawrence separating the Jefferson Park’s core commercial area at Milwaukee and Lawrence avenues from the Lawrence-Austin area.

Rabb said that the SSA would help give the chamber the tools it needs to improve the business area and that the values of both commercial and residential properties would increase as the improvements are put in place. He said that some of the larger chain stores in the area do a poor job of maintaining their properties and that the funds which their landlords would contribute to the SSA could be used to spruce up those areas.

Chamber member Larry Fisher of Heatmasters, 5540 W. Lawrence Ave., said that the SSA would help return the business district to the vibrant area it one was and that he would challenge anyone to walk certain parts of the district and not agree that something needs to be done to pick the litter piling up.

Chamber executive director Amie Zander said that residents contact her about the need for better landscaping in the business district but that without the SSA, the chamber could
not properly maintain planter boxes and other decorative elements.

Alderman John Arena (45th) said that the 10-year-old service area in the Six Corners commercial district has played an integral part of the area’s recent revitalization and that Jefferson Park has the potential for greater success because of the CTA bus and el station in the heart of its business district. He said that public transportation users must walk by area businesses and that SSA will help make the area more attractive to commuters.

Arena said that services areas can be successful in large part because spending decisions are made by a local commission instead of by the bureaucracy of City Hall.

SSA taxes are collected as part of the property tax bill which property owners receive from the county twice a year. The first Jefferson Park SSA tax would be collected in the fall of 2016, said Kimberly Bares, president of PLACE Consulting.

No commercial property owners spoke out against the SSA proposal at the May 14 meeting. The chamber will hold a second community meeting on its SSA proposal at 6:30 p.m. Thursday, May 21, at the Copernicus Center, 5216 W. Lawrence Ave.