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Rahm Emanuel warns non-profits not immune from financial sacrifice

Updated: September 24, 2012 6:25AM

The arts are the heartbeat of Chicago, but they cannot be immune from financial sacrifice, Mayor-elect Rahm Emanuel said Wednesday, signaling tough times are in store for nonprofits to help solve the city’s financial crisis.

Emanuel campaigned on a promise to turn off the free water spigot to hospitals, churches, universities and other nonprofits, a practice that one alderman estimated is costing the city $300 million a year. But the call for shared sacrifice may not stop there.

During a discussion at the Goodman Theatre on Wednesday about the importance of the arts, Emanuel was asked whether he would follow the lead of other struggling big cities by forcing nonprofits to pay property taxes.

“Why don’t you just get back to throwing things at me,’’ Emanuel said. “Is there a multiple choice on that one? Is there another question? You really want an answer? I’m gonna look more into it. I’ll give you an answer, but I want you to know something. If you think this is a change-free zone because what we do is so important to the human soul, then obviously I haven’t been clear.’’

He continued: “There’s a lot of good nonprofits and charitables. But they get a benefit on the tax side. And given the changes I’ve got to make and given the sacrifices I’m gonna ask from everybody, nobody is in a sacrifice-free zone. I love you all. You’re really important. But you’re not more important than anybody else.’’

Churches, universities and other non-profits with state exemptions currently pay no property taxes. Those without exemptions pay a reduced rate ranging from 20 percent to 30 percent.

Later Wednesday, Emanuel’s spokeswoman insisted that he has no intention of “taxing nonprofit real estate.”

But Emanuel’s comments had already sent shockwaves through the audience of arts administrators, funders and others gathered at the Goodman.

The majority of Chicago’s theater operations are renters, so it would not affect them. Most of their landlords already pay property taxes and for water and other services.

“The unfortunate result of taxing the nonprofits would be that it would discourage those companies who do want to own their spaces and make the capital investments that requires from doing so,” said Jeremy Wechsler, artistic director of the newly refurbished Theater Wit, 1229 W. Belmont, which rents its space.

Wechsler, who put together much of the money required for the gut rehab of Theater Wit, said he believes “it will be very challenging for the city to institute an equitable policy without creating some real shock waves. And now, with all forms of donations and funding down, the powers-that-be will have to proceed very slowly if they really intend to do this. For some it will be a real stake in the heart.”

In between the tough talk Wednesday, Emanuel talked about music, theater and museums as the lifeblood of Chicago. He’s determined to lengthen the school day, in part, so schools don’t have to chose between reading, math and music. He wants to use the Cultural Center as an arts showcase for students and highlight the role of dance, which is close to the former ballet dancer’s heart.

After floating the idea of creating an Uptown Music district modeled after the downtown theater district, Emanuel said he was surprised to hear questions raised about that coming “at the expense” of other parts of the city: “This is not a limited pie. We should not see this debate as downtown or big theater vs. neighborhoods. Let us grow that pie so we’re not in this race against zero-sum gain.”

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