The following was released by the Northcenter Chamber of Commerce.
February 17, 2012
FOR IMMEDIATE RELEASE
Contact: Brad Ball
Office: (773) 525-3609
Northcenter, Chicago — The formation of a new economic development player on Chicago’s northwest side has recently come under attack. On Tuesday, Northcenter resident, business owner and former Northcenter Chamber of Commerce President Robert Engel emailed out a press release condemning the chamber’s participation in the creation of the Northwest Community Corporation. It is the Northcenter Chamber of Commerce’s unwavering position that Mr. Engel’s charges contain so much commentary and so many factual errors and omissions it is implausible to reasonably respond in whole or in part. The Northcenter Chamber of Commerce would like to take this opportunity to create an accurate statement of record.
The Northwest Community Corporation was formed in 2011 through a startup loan from the Northcenter Chamber of Commerce. At its monthly board meeting on August 9, the Northcenter Chamber board unanimously approved the Resolution to Loan Funds for the Formation of the North West Community Organization.* The asterisk was present on the resolution because at that time, a formal name had not yet been decided. Although not specifically noted in the resolution, $10,000 was the figure designated as the startup loan. Those dollars were intended and used to cover costs for incorporation and general business creation like retaining legal counsel from May Law, PC and the Certified Public Accounting firm of Upchurch and Associates. It was also intended to cover meeting expenses and marketing activities like logo design, business card production, corporate letterhead, a website and email addresses.
The mission of the Northwest Community Corporation is building communities and improving quality of life in Northwest Chicagoland. It seeks to engage business leaders, community leaders, elected officials and local governments to help consider and address strengths, weaknesses, opportunities and threats to business and commercial districts. The Northwest Community Corporation was created with the vision that a thriving local business sector increases the quality of life by attracting residents, visitors and businesses by raising property values and growing the local tax base.
The Northwest Community Corporation engages its constituents and determines their needs in three ways: 1) Personal relationships with stakeholders including elected officials, business and community leaders; 2) Strategic needs analysis based on those personal relationships and on objective neighborhood statistics and data; and 3) Targeted marketing campaigns that build awareness.
Additionally, when evaluating potential partner neighborhoods, the Northwest Community Corporation uses three main points of consideration: 1) Acute need; 2) No local, professionally-staffed organization exists, is willing or capable; and 3) Overlap of other levying districts.
The defined service area for the Northwest Community Corporation is as follows: Eastern Boundary: Lake Michigan; Southern Boundary: IL-64 (North Avenue); Western Boundary IL-53/I-290; Northern Boundary: Lake-Cook Road. This total service area includes the City of Chicago as well as neighboring municipalities in the north, northwest and west suburbs of Cook County.
The Northwest Community Corporation board of directors was carefully selected based on individual expertise including areas like finance, personal network, economic development and urban planning. In a Memorandum of Agreement dated January 5, 2012, the Northcenter Chamber of Commerce agreed to allow its staff members, Executive Director Garrett FitzGerald and Associate Director Bradley Ball, to take reasonable time as necessary to accomplish the goals of the Northwest Community Corporation in consideration of long-term mutual benefit. This benefit for the Northcenter Chamber would allow its community support activities like its hugely popular community events, holiday events and summer concert series.
The primary economic development tool the Northwest Community Corporation uses to promote and grow commercial districts is a Special Service Area (SSA). The City of Chicago Office of the Inspector General’s website provides the following description of the SSA program:
The Special Service Area (SSA) program is an economic development tool that establishes a taxing district with specific boundaries. Property owners in that district pay an incremental property tax to fund services such as sidewalk maintenance, landscaping, security and local business advertising. There are currently 43 active SSAs in Chicago with an aggregate budget of approximately $23 million.
SSAs are created through an application process. A sponsoring agency (usually the future Service Provider Agency of the SSA) interested in establishing an SSA completes an application which includes economic analyses and demonstrated public support amongst the owners and leasers of the affected properties. Once the SSA application is reviewed by the City’s Department of Housing and Economic Development (DHED) and approved by City Council, the local aldermen and sponsoring agency nominate SSA Commissioners. Once confirmed by City Council, the SSA Commissioners, in turn, select a Service Provider Agency which manages the daily operations of the SSA and works with vendors to procure the SSA services.
Each SSA is funded by its own incremental tax rate applied to the Equalized Assessed Value (EAV) of properties within the SSA. Although the tax rate in any given year may vary depending on the tax revenues needed to deliver the budgeted services, the rate may not exceed the particular SSA’s authorized tax rate cap which is set during the creation of each SSA. SSA budgets are reviewed annually by DHED and approved by the SSA Commissioners and City Council. (http://chicagoinspectorgeneral.org/uncategorized/special-services-areas-description/)
This SSA tool has proven highly successful throughout Chicago, including areas like Northcenter, Lincoln Square and Lakeview, where the chambers of commerce have served as managers. Since there are areas where no such organization exists, the Northcenter Chamber of Commerce realized an opportunity existed and took a long deliberated and calculated business risk of funding the startup of a new organization that could go into these areas and work with local stakeholders to establish, if appropriate, an SSA and then provide SSA management service. This business opportunity for the Northcenter Chamber exists in both staffing efficiencies and office management cost reduction. By investing in the creation of the Northwest Community Corporation, the Northcenter Chamber of Commerce was taking action to secure its financial well-being and future.
With the new company formed, the Northwest Community Corporation staff took to studying the feasibility of SSA establishments in both the 33rd and 36th Wards. The documents were submitted to the City of Chicago Department of Housing and Economic Development. Upon completing further interview by DHED staff and formal presentation, the Northwest Community Corporation was granted conditional approval to continue meetings and establishment activities. One hurdle loomed which is the cost of the market evaluation and tax study which must be completed as part of any SSA establishment. The market evaluation and tax studies routinely cost tens of thousands of dollars. Once the SSA is established, the first check written from the funds go to pay back the expenses incurred during its creation including the cost of the tax study.
As the Northwest Community Corporation has no assets of its own to pay for a study or secure financing for any such study, in the Resolution of December 13, 2011, the Northcenter Chamber of Commerce board of directors voted unanimously to loan its assets for the purpose of collateral.
Then, in Resolution 2 of January 5, 2012, the Northwest Community Corporation board of directors resolved to open a $50,000 line of credit at an FDIC insured bank with each dollar being guaranteed in a certificate of deposit held by the Northcenter Chamber per its asset partnership Resolution of December 13.
As of February 17, 2012, efforts to establish an SSA in the 36th Ward have ceased with little financial investment due specifically to the ward re-map process. Efforts are progressing in the 33rd Ward and the Northwest Community Corporation hopes to announce its first series of community meetings. Additionally, no money has been moved by the Northcenter Chamber of Commerce into any certificate of deposit account.
The investment of funds and staff time into the creation, execution and growth of the Northwest Community Corporation was made with full transparency to the Northcenter Chamber of Commerce board of directors, the City of Chicago and the local stakeholders where it partnered. The investment in no way endangers the Northcenter Chamber of Commerce philanthropy budget and it in no way endangers the Ribfest Volunteer Grant Program funds. Indeed, the Northwest Community Corporation investment was made to spread the Northcenter Chamber’s financial risk so that both of those amazing resources can live on and grow into perpetuity.