Shaped by their daily interaction with Illinois businesses as well as their own personal experiences, commercial real estate brokers cite pension reform and taxes among the most critically important issues facing the State of Illinois, according to a recent survey of the Northern Illinois Commercial Association of Realtors.
“The State of Illinois is in a very challenging position, a precarious time right now, with many issues and challenges significantly impacting the business community’s ability to grow and expand in Illinois,” said William Caton, President, Caton Commercial Group and the 2014 President of NICAR. “With an election looming and so much at stake, we felt it was important to take the pulse of commercial real estate professionals so that our concerns might somehow be addressed.”
Caton added that the survey is part of a bigger, broader initiative that will culminate on September 11 in a forum bringing together members of the Illinois legislature and the commercial real estate community.
In the survey, commercial real estate professionals were asked questions about the importance of issues now facing Illinois. The issues were: state taxes, pension fund reform, aging transportation and infrastructure, job creation, general perception of Illinois business climate, business competitiveness with adjacent states, procurement of Federal tax dollars, foreign trade/business development, support for small business development and the “state” of education.
In total, five of the ten issues were identified by at least 49 percent of the respondents as being of “critical importance” to the State. This topics were State income taxes, Pension fund reform, Job creation, General perception of Illinois Business Climate, and The “state” of education.
Almost seven in 10 respondents, 67.3 percent ranked pension fund reform as critically important. More than six in 10, 63.6 percent ranked job creation as critically important.
The critically important ranking of pension fund reform was explained by two commercial real estate professionals as the uncertain nature of the solution and doing the right thing.
“Certainly, taxes in Illinois are an issue, but right now it is a transparent issue,” said Daniel Cawley, SIOR, the founder of Cawley Chicago and a past president of NICAR. “But the pension issue evokes greater concern because of the uncertainty of a solution. What will it be? What is its impact and how will it trickle down? Those are big questions to answer.”
Alan Goldberg, Senior Commercial Advisor, Fara Commercial Brokerage had a different perspective and said, “We need to honor commitments to workers, however, the system needs to be in sync with current economic realities. We need to find the balance between ‘what is’ and ‘what ought’ to be.”
Fewer than one quarter of respondents viewed the procurement of tax dollars and foreign trade/business development matters as being critically important to the State of Illinois, perhaps signaling that commercial real estate professionals believe the State needs to focus on its own issues before reaching out nationally and internationally.
“Federal tax dollars are important, and so is being able to attract foreign interest and development in our State,” Caton said. “At the same time, there is much work to be done to clean up other matters, matters whose solutions will be more impactful to the State that foreign business development.”
After ranking the importance of those various issues, in a separate question, commercial real estate professionals were also asked to rank the three most important. By a narrow margin, 33.3 percent to 31.5 percent, corporate and personal tax matters were identified as the most important issues; more important than the pension fund deficit. The next closest “top rated issue”, but cited by only 9.3 percent as the most important, was job creation.
In commenting on job creation in Illinois, John K. Rutledge, Rutledge & Company, voiced his sentiment that the issue of jobs “will take care of itself if we fix the other problems: budget, taxes, etc.”
When comparing the issues based on a cumulative score for first, second and third most important responses, taxes remained the most important. Almost eight in 10 ranked taxes as the first, second or third most important issue facing Illinois. Approximately seven in 10, 70.4 percent, rated the pension fund deficit first. The next closest was job creation with half ranking it the first, second or third most important.
Though education was rated critically important, but not cited as one of the top three most important issues facing the state of Illinois, Gerard DuMelle, Century 21 Affiliated, said, “The smarter we are the better we can create problem solvers of the future.”
NICAR will provide a closer look at the issues and challenges facing the State of Illinois when it hosts the Commercial Forum for a Better Illinois. The event will be held from 4:00 to 7:00 pm on Thursday, September 11th at the Rosewood Restaurant in Rosemont, IL.
The event, which is open to all commercial real estate professionals, will feature a panel discussion including four members of the Illinois General Assembly.
Among the political officials scheduled to appear at the event include, Senator Pamela J. Althoff (R), 32nd District (McHenry); Senator Toi W. Hutchinson (D), 40th District (Chicago Heights); Representative David Harris (R), 53rd District (Mt. Prospect); and Representative Sam Yingling (D), 62nd District (Hainsville).
On-site registration for the event will begin at 3:30 pm. The program, which will also feature a question and answer period, will begin promptly at 4 pm. Following the Forum, there will be a cocktail and networking reception, which will allow members of the commercial real estate community to interact more personally with the State Senator and Representatives.
