CCAC would like to thank Gina Berndt, Managing Director, Perkins + Will for hosting the membership for the January meeting from the top of Wrigley Tower.   The membership heard from Richard Mattoon, Senior Economist and Economic Advisor for the Federal Reserve Bank of Chicago who explained the state of the economy at the national, state, and city level. 

Mattoon explained that 2019 was a growth year for the national economy for the 10th year in a row, which is a record for the United States.  This was due to strong consumer spending, but he noted that the rate of growth is slowing.  He also pointed out that while the unemployment rate is at a record low of 3.5%, wage inflation is also low.  This suggests that while people are working, “there is a large pool of people who are underemployed, and that is tamping down on the wage pressure.”

He also cautioned the unsustainability of federal government spending, and that the national debt level is the highest it has been since World War II.  “The tax cut did not create the additional revenue that was anticipated, and we didn't get the revenue bump for the tax cut to pay for itself,” he said.  He added, “At some point we’re going to have to cut spending significantly, or increase revenue significantly, and that is a concern we have going forward.”

State of Illinois Outlook

Mattoon explained that while the media has focused on high taxes as the reason for outmigration, the numbers showed that half of those who left Illinois moved to higher tax states, which suggests the problem is more complex, and, “It isn’t a true story that [outmigration] is driven by high taxes, or some other perceived problem, but rather people are taking advantage of economic opportunity and where the jobs are best.  It doesn’t mean Illinois can’t do better, but suggests it isn’t a clean story to just blame high taxes.”

Unfortunately for Illinois, the uncertainty of the future is holding back the State’s economy.  “If people don’t know what the plan is, they can’t plan against it.”  Mattoon explained that the State’s budget is unbalanced, and the State has a large pension liability.  In discussing pension solutions, he said that since the Illinois Supreme Court has ruled that cuts to benefits violate the Constitution’s contract clause, the only remaining solution is more revenue.  As an aside, he explained that some economists have argued that raising enough money to fully fund the pension system would actually harm the State’s economy more than help it, and that instead the State should aim to create a flat (and predictable) debt payment and wait for the current group of retirees to no longer collect their benefits due to natural declines in the population. 

For good news Mattoon highlighted the recently passed capital program for roads, bridges, rail, and state facilities which was well structured with appropriate revenues such as an increase in the gas tax.  He also mentioned that while Illinois legalized cannabis, the tax revenue generated from this sin tax is only about one-percent of the State’s general operating fund, so by no means a solution to all our spending problems.  

Mattoon explained that Chicago underperformed going into the recession and also out of the recession.  In other words, “We knew our lane and we knew how to stay in it,” he said.  While Chicago is currently underperforming compared to the rest of the nation, the direction is still positive.  He also highlighted that Chicago has higher personal income, good investment, is first in the nation for site selection among employers, and others.   Bad news for Chicago includes mostly demographics such as an aging population, and the poor fiscal condition of the State of Illinois.

He also boasted that Chicago’s is one of the most affordable Global Cities on the planet, and also has a highly educated workforce, a great transportation system, increased tourism, and the second largest financial sector in the nation.  He said, “You won’t get what we have here in Los Angeles or New York” at this affordable level.

“We’re not concerned about a recession in 2020,” he said.  However, he pointed out we are balancing the economy with consumer spending, which can easily change. 

He also gave some thoughts on Chicago’s real estate boon by explaining that the big developments talked about in the news seem tailored to growing industries, which is good.   

At its January 23rd meeting, the Chicago Plan Commission adopted new rules for the approval of planned developments (PDs) to increase transparency and accountability of the process.  Those changes include putting all PD applications on-line 15 days prior to the project's hearing, as well as putting the presentation on-line 3 days prior to the hearing.  Additionally, the developer will give the presentation instead of department staff, and there is an e-mail address for the public to submit comments.  To learn more about these changes please visit the Department's website here.  

The CHICAGO SUN TIMES is running a series of guest columns written by Ed Zotti, CCAC Consultant, that directly speaks to strengthenig the City's competitive edge. In his January 17th column, he writes about the transformative nature of large-scale developments in the downtown area that are coupled with transportation investments, with a particular focus on Landmark Development's One Central project, which the CCAC membership received a private briefing at its October 2020 meeting.  

Below are some highlights from the column:

"The ingenious part is the civic build concept. Transit alone can’t generate the money to cover its construction costs. But transit combined with other revenue-producing development could be a different story. If all goes as planned, the civic build would pay for itself."

"But South Siders still need a way to get the last mile to their jobs, increasingly found in outlying parts of downtown poorly served by transit...A transit line connecting One Central to the L and Metra would be hugely advantageous for Landmark. It also would let commuters reach the fringes of downtown where big projects have been proposed."

To read the column in full, click here.

CCAC organized teams that consulted on revitalization efforts for retail corridors in five underserved neighborhoods in Chicago's south and west sides that were identified by community organizations, in partnerships with World Business Chicago.  For the February meeting, CCAC will have an evening "Reveal and Reception" to showcase the team's important work, accomplishments and recommendations to spark a community led neighborhood revitalization.  

Please click this link for a listing of all 2020 CCAC meeting dates and venues, which include two evening meetings.  As a friendly reminder, note that locations are subject to change and will be reported to the membership in the monthly newsletter as well as direct e-mails.   A special “Thank You” to our hosts for their generosity.  

CCAC is organizing a delegation to the World Expo held in Dubai in early 2021.  CCAC member Adrian Smith + Gordon Gill Architecture was selected to design the Al Wasl Plaza for the World Expo in Dubai, and is organizing this special opportunity for our members and their guests.  

A preliminary agenda and expected costs can be found by clicking this link. 

There are still a few spots available, to add your name to the confirmed list e-mail kobrien@ccac.org. 

The Burnham Council Leadership Team is planning for an engaging, informing, and fun 2020 with membership events and opportunities for members to get involved in CCAC initiatives.

On March 31st, the membership will receive a presentation on the Tribune Tower redevelopment.  (Details and an RSVP link will be sent in an email soon.)  

In April, the Burnham Council will celebrate Earth Day by supporting the CCAC Corridor Revitalization Initiative Austin Team’s community garden project. 

Next, CCAC and the Council will celebrate the one-year anniversary of the launch of The Central City Strategy for All of Chicago policy paper by supporting a  high-level discussion on Transportation, Jobs and Workforce Development, and Strategies to Promote Chicago.  This symposium will provide a forum to exchange ideas and carry forward conversations on important ideas for the future of our city. 

In the fall, the Council aims to conduct a roundtable on the role of Big Data in city planning, and discussing the benefits and pitfalls of “Smart Cities.”   

The Burnham Council’s leadership will also be announcing opportunities for its members get involved in Phase II of the CCAC Corridor Revitalization Initiative.  CCAC members are encouraged to identify emerging leaders in their firms who want to be involved with the Burnham Council as this group is the next generation of leaders in our city.

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