Not this SSA

What is an SSA?

A Special Service Area (SSA) is like what’s known as a Business Improvement District (BID) in other cities, if you’re familiar with that term.  It’s a specified district, the properties of which are assessed a special tax to fund services specifically for that area that other areas would not receive. 

SSAs are generally in commercial districts and can be useful economic development tools in the right circumstances, if they are well-conceived and well-received.  Chicago has 40 some SSA districts from State Street to Roseland to Lincoln Square and beyond. 

Proposed Milwaukee/Armitage SSA

Back in April I learned about a proposed SSA that would include Milwaukee Avenue.  The application was due and was submitted in mid-May.

Initially, the proposed district included properties in three different wards on wide swaths of Milwaukee, Fullerton and Armitage Avenues in Logan Square and a smaller strip of properties on California Avenue. 

Like many things in Chicago, SSAs do not go forward without aldermanic support.  First one alderman withdrew his support, then another, so that ultimately the proposed district included only properties marked in color on the map below (click on map for larger view and ability to zoom in).  Properties in an SSA district must be contiguous, so the district could not jump over the gerrymandered ward boundaries. 

Proposed Milwaukee/Armitage Special Service Area

Where it went wrong

This SSA proposal, though, was fraught with problems from the start.  First, it was (on its surface anyway) proposed by the Latin American Chamber of Commerce, which, while located in Logan Square, does not have a record of involvement in the community, does not have a mission that’s Logan Square specific, and does not have but a handful of Logan Square members.  Our local Logan Square Chamber of Commerce, on the other hand, opposed this SSA proposal. 

Representation

Also, this SSA was conceived by a small group of interconnected advisory committee members not particularly representative of the proposed district.  In the end, half of them no longer even had properties or businesses in the affected area, yet, as a group, they were advocating for assessing a special tax on others. 

Proposed uses

This advisory committee, limited in its representation of the district, did not tap into the needs or concerns of the business and property owners in the district in this economic climate.  The largest budget items proposed to be funded by the SSA tax were for sidewalk cleaning and snow plowing, even though property owners and businesses are required by law to, and do already, clear snow from the sidewalk.  A couple of the smaller budget items were for a shared valet and for a trolley, even though all of the properties are along existing train and bus routes.  Another smaller budget item was for graffiti removal, even though the city already provides that service. 

Just about every commercial property in the proposed district is also in the Tax Increment Financing (TIF) district, yet other budget items were for things like façade improvements that can be financed with TIF money, an already existing economic development tool. 

TIF implications

There were, however, some properties, mostly residential, that are not in the TIF district.  Those properties not subject to the tax “freeze” of the TIF (not really a freeze, but too complicated to expound on here now) would have been disproportionately taxed for the proposed district.  I know of one homeowner whose taxes would have risen 15% just from this SSA proposal.

Geography

Besides the difference between how properties in and out of the TIF district would be treated, the proposed district was geographically challenged in other ways. 

Because an SSA needs to be contiguous, the residential strip of California Avenue was included in order to join Milwaukee and Armitage Avenues.  Yet the residences would receive limited benefit from services designed to promote commercial development.  They certainly wouldn’t receive any more benefit than their neighbors across the street in a different ward who would not be taxed.

The character and needs of the Polish section of Milwaukee Avenue also are vastly different from the character and needs of Armitage Avenue, for example.  The character and needs of different parts of Milwaukee Avenue are even distinct.

I also learned earlier this year that, because we have far too many commercial properties in the city than called for by demand, the city is looking to de-emphasize commercial on some east-west arteries, including Armitage Avenue. So it would not make sense to create an economic development tool and add a tax burden to properties where a different future is contemplated.

Communication

The SSA proposal was also poorly communicated.

I started talking to business and property owners along the section of Milwaukee Avenue that is the focus of this blog, and only one had any familiarity with it.

Finally a postcard announcing two meetings to discuss the proposed SSA was mailed to affected properties less than four days in advance of the meeting date.  A number of people did not receive the mailing prior to the meetings, and the mailing also neglected to reveal that there was a tax consequence of the proposal.  For those who did receive the postcard in time, that was information that might have spurred them to make the necessary last-minute arrangements to attend the meeting. 

Enabling legislation

In the case of SSAs, communication is elevated in importance more than usual.  The legislation that enables the city to create an SSA is written such that affected property owners don’t get to choose it or vote on it, thus the importance of a representative advisory committee as well. 

Rather, an organization can apply to establish an SSA, and, if supported by the alderman, the proposal can go to a public hearing.  If a proposal gets that far — and you can imagine how it would be possible if most of the affected people don’t know anything about it — the only way to stop it is to gather the signatures of 51% of the property owners and 51% of the register voters in the proposed district on a petition objecting to the SSA, a high burden for those about to get taxed. 

Not this SSA

Fortunately, through the effort of neighbors concerned about this SSA proposal, enough businesses and property owners did learn about the proposed SSA, did attend the meetings to discuss the SSA, and did call and write the alderman and other city officials expressing their opposition to this SSA.

Earlier this month, the Latin American Chamber of Commerce withdrew its application for this SSA even more quietly than it introduced it.

 

Scene in Logan Square:

Bucktown Arts Fest,
Saturday and Sunday,
August 28-29, from
11:00 a.m. to 7:00 p.m.
at Oakley and Lyndale
Avenues.

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One Response to Not this SSA

  1. payton says:

    Turns out that I do, of course, live in this district — and no, didn’t get the postcard. Of course, an SSA would be the perfect mechanism for getting money to maintain a plaza at Logan & Milwaukee…

    payton: Your experience with the lack of communication is just one of the reasons that this SSA was not the one, but I want to be clear that I don’t think there is anything inherently wrong with SSAs, and, in fact, they can be beneficial for things like plaza maintenance, if well-conceived and well-received. ~ Lynn

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