Chicago voters rejected Mayor Brandon Johnson’s plan to raise the real estate transfer tax to combat homelessness, but the failed binding referendum got a surprise boost Wednesday.
Developer Quintin Primo III sounded almost like a cheerleader for the $100 million-a-year tax increase during a news conference called to announce a combined, $151.2 million in tax increment financing subsidies to help adapt four Loop office buildings for residential and commercial use.
It happened after Johnson was asked what impact the binding referendum, known as “Bring Chicago Home,” would have had on projects like the four older office building conversions on or near LaSalle Street.
Primo III and developer Michael Reschke are joining forces on the $202.8 million project at 111 W. Monroe. It would convert 14 floors within a pair of adjacent buildings, including a 113-year-old high-rise, into 345 units of new housing, 105 of them affordable. The project would be made possible by $40 million in TIF assistance.
“In every major urban market in the country, a transfer tax already exists. The beautiful thing about Chicago is that we’re at … 0.75%. L.A. is at 5.9%. San Francisco is at 5.5%. Philadelphia and New York are nearly 6%,” said Primo III, CEO of Capri Capital Partners LLC.
The referendum would have increased no higher than 3% — “still significantly under our major competitive markets across the country. And I believe that, if we want to solve a problem like homelessness, which is something that my wife and I have dedicated ourselves to, you’ve got to pay for it,” Primo III added. “If we want to have a homeless situation in Chicago that’s better than San Francisco or better that we see in L.A., we’ve got to invest in it. We’ve got to solve it. And that takes money.”
Johnson said the “whole point” of all of his housing initiatives — including Bring Chicago Home, LaSalle Street Reimagined and the proposed $1.25 billion bond issue — is to confront the fact that in Chicago and throughout the country, “we have not just a homeless crisis … we have an affordability crisis.”
“Many of these individuals are stretching their ends to make them meet. So this is just part of a larger strategy … to ensure that the people of Chicago who work here, live here, can afford to stay here,” the mayor said.
Johnson once again did not say how or when he would continue the fight for a dedicated revenue source to combat homelessness — such as searching elsewhere for new revenue or trying again to place the referendum on the ballot in November or later, possibly simplified to make it easier for voters to understand.
But, he said, “I’m very confident because we have key developers, like Quintin and others, who recognize that there is an imbalance in this country. There is. The gap between those who have and those who do not continues to widen. I believe we’re a better city than that.”
