Monthly Archives: December 2015

Prime Now Delivers in Chicago

Chicago residents who belong to Amazon Prime can now take advantage of a new service

Prime Now Now Delivers in Chicago
Prime Now Now Delivers in Chicago

in the Windy City, one-hour grocery delivery.

Also included in the service, which will cost Prime members an additional $7.99 per delivery are Plum Market, Sprinkles Cupcakes and My Fit Foods. If customers can wait 2 hours for their food-stuffs, then delivery is free.

Orders can be placed through the Prime Now app. Chicago joins more than 20 cities all over the country which offers Prime Now.

The Benefits of 1031 Exchanges

Real estate is a popular investment vehicle and there are some useful tax breaks that investors should be aware of. One of those which has been becoming more popular over the past 10-15 years is known as a 1031 exchange, named after section 1031 of the tax code.

Here is the background: In March 2002 the IRS issued new guidelines called Rev. Proc. 2002-22. These guidelines were created to help buyers and sellers of real estate who were conducting 1031 exchanges. These special property sales were based on the exchange of the property for a “like-kind” property. This exchange allows the sellers to defer paying capital-gains taxes on the sale. In the broadest of terms, the investor is swapping (exchanging) one business or investment asset for another. Even though most swaps are taxable as sales, if you come within the parameters of section 1031, there will be either no tax or limited tax due at the time the exchange takes place.

Back in 2002 IRS ruling addressed itself to something called a Tenant in Common, or a TIC. A TIC allows investors to own just a partial interest in a 1031 property, which can be entities such as shopping malls office buildings, and other commercial properties. The ruling established the fact the TIC properties indeed qualify as a realistic option for 1031 exchanges.

Most sponsors, or firms which create TIC deals, demand relatively high minimums, usually around $250,000. In the past there have been some firms with considerably lower minimums, however.  Some niche firms set the limit as low as $50,000, such as Rob Hannah’s Strategies Group LLC, a company that specialized in structuring and then selling shares in TICs.

There are a few caveats when considering the use of a 1031 exchange to defer taxes.

  •  A 1031 exchange is not allowed for personal use, only for investment and business property.
  • A 1031 exchange does not always have to be real estate, although it usually is. It is even possible that the sale of a work of art can be considered qualified for a 1031 exchange.
  • The definition of “like-kind” is wide. The terminology here can be misleading so check before you make any deals.
  • You are allowed to do what is known as a “delayed exchange.” Because the chances of immediately finding someone with the exact property you want who also wants the exact property you have means that most exchanges are delayed via three party (Starker) exchanges. This type of exchange requires a middleman who holds your cash after you sell your property. He then uses that cash to buy your replacement property on your behalf. This three party trade is considered a swap.
  • There are two important timing rules to keep in mind when conducting a delayed exchange. Once you sell off your property the third party intermediary gets the cash, and within 45 days of the sale of your property you have to designate the replacement property in writing to that same third party intermediary. The second restriction is that you must close on the new property you are purchasing with 180 days of the sale of the old property.
  • As soon as you receive the cash for your property, it is taxed.

There are a few other rules to be aware of. As you can see, 1031 exchanges are not simple things, and we recommend getting advice from a professional before jumping in to this potentially lucrative tax benefit for investors.

Palmer House Available for Purchase

Palmer House
The Palmer House is one of Chicago’s famous and historic landmarks. Photo by Tony Brooks.

Considered by many as Chicago’s First Great Hotel, The Palmer House is up for sale.
The historic hotel is probably most famous for the on-the-premises invention of one of America’s most beloved confections: the chocolate brownie. Bertha Palmer is responsible for our added waistline inches and dental caries, all of course well worth it. She was married to Potter Palmer, the man responsible for the success of the grand hotel. Here is how it happened:

“Bertha Palmer, who was president of the Ladies Managers of the World’s Fair, was doing box lunches for all the guests but she wanted something other than piece of pie or cake. So she came to the hotel and charged the chef to make something like a cookie. Denser, like a cookie, but chocolatier. She loved chocolate. And ergo, the brownie,” Palmer House historian Ken Price said.

It is not just brownies that has made Palmer House special. Less than two weeks after Palmer House opened on September 26th, 1871, the Great Chicago Fire left the hotel nothing but a pile of ash. From the ashes rose the second incarnation of the hotel two years later, setting several precedents for their new establishment.

Price explained: “First, totally fireproof building. Second, is first utilization of Edison’s invention the lightbulb, Bell’s invention of the telephone, and actually this contraption called the vertical railroad, which became the Otis Elevator.”

Google’s New Office in Chicago Hosting 2016 Venture Summit

The Chicago River is the south border of the Near North Side and Streeterville and the north border of the New Eastside (viewed from Lake Shore Drive. Photo by lickr user mindfrieze
The Chicago River is the south border of the Near North Side and Streeterville and the north border of the New Eastside (viewed from Lake Shore Drive. Photo by flickr user mindfrieze

The second annual Chicago Venture Summit, sponsored by World Business Chicago will be held on April 20-21, 2016 at Google’s newly opened Chicago branch office. The summit will host startups, venture capital firms and will focus on trends in innovation. Fortune 500 companies will also be there to provide the oil to lubricate the machine of networking. A special emphasis will be placed on businesswomen in Chicago.

“Chicago’s tech community is thriving,” said Chicago Mayor Rahm Emanuel. “We’ve seen a record high amount of venture capital invested in Chicago startups in 2014, and the second highest number of companies included on Inc. 5000’s latest list of fastest growing companies. The Chicago Venture Summit builds on this environment, allowing our companies to continue to grow and create jobs throughout Chicago.”

ChicagoNEXT, the WBC’s council of technology leaders, is organizing the event. The council is committed to fostering growth and opportunity in technology, science and innovation. They support entrepreneurship which leads to new growth.

“We’re proud to bring the strongest local, regional and national venture companies to the city to converge with our area’s brightest entrepreneurs and industry leaders,” said ChicagoNEXT Chairman Mark Tebbe. “The Chicago Venture Summit provides one of the most unique networking opportunities and creates tangible investment in our city and its companies.”

Rosemont Convention Center Getting Upgrade

DES Convention Center in Rosemont, IL. Photo courtesy of Zol87 from Chicago, Illinois, USA
DES Convention Center in Rosemont, IL. Photo courtesy of Zol87 from Chicago, Illinois, USA

The Donald E. Stephens Convention Center in Rosemont is ready for a major facelift, which is soon to be implemented. Included in the improvements will be modernized bathrooms, a new paint job throughout the center, including ceilings, walls, and exhibit halls.

The village board signed off on a $80,300 contract with Aria Group Architects. They will be called upon for design development, construction document services and project administration for the project.

Coming in January the board is most likely going to approve contracts for construction work. No costs for the contracts have been disclosed.

Rosemont will probably be able to access state monies to pay for the improvements. The village receives $5 million every year to pay for improvements to the convention center and incentives. The work is expected to take place during 2016.

Illinois Electric Bill Heading Down in January

Suburban ComEd customers can expect to see a reduction in their delivery rates of about 2 percent beginning in January. That translates to about $1 for every $85 spent on electricity. The Citizens Utility Board, a watchdog group says that the reduced cost is a good beginning, and is planning on asking for further reductions in the next month.

Jim Chilsen, spokesperson for the CUB said:

“We hope this decrease is a sign that ComEd has taken a step forward in building a more efficient and reliable power grid that gives consumers the opportunity to save money. Illinois has a long way to go to build a power grid that maximizes consumer benefits. So our message to the state’s biggest electric utility is: Don’t stop now. We are paying for these power grid upgrades, so we deserve the benefits.”

ComEd asked for the reduction last April, requesting a total cost break of $50.4 million. Further adjustments were added by the Illinois Commerce Commission last week, approval a reduction of 2.58 percent, or a total of $66.5 million.

“The smart grid program is delivering on its promise to generate efficiencies and we are pleased to pass along those savings to our customers by decreasing their electric delivery costs,” ComEd President and CEO Anne Pramaggiore said. “The investments in the smart grid program are producing a stronger, more reliable system with fewer outages. Those results mean less operational costs and greater savings for our customers.”

Only Two Burgers Left in Chicago Burger-Off

Len Rizzi (photographer)
Len Rizzi (photographer)

Thousands of suggestions for a new kind of burger creation were submitted by a variety of wannabe and actual chefs in McDonald’s recent “Chicagoland Burger Build-Off.” After careful consideration the McDonald’s operators in the Chicagoland and Northwest Indiana region whittled down the field to only two finalists: A Chi-Town Classic featuring Canadian bacon and smoked applewood bacon strips; and a Rio Crisp Burger complete with tortilla chips and guacamole.

So which of the two is going to be the winner? Just as the ideas came from the people, the ultimate winner will also be chosen by the public: both burgers are now being served in the region’s restaurants to see which becomes the most popular. The inventor of the burger of choice will receive $5,000 in cash and a paid vacation to Universal Studios in Los Angeles. Not to mention being able to tell everyone you created a McDonald’s featured burger.

McDonald’s will also promote the new burger with some fun advertising. Cossette Chicago advertising agency created a TV spot which hopes to inspire excitement over the new-fangled burgers and the fact that the public gets to choose the final winner.

Not only is McDonald’s trying to promote the contest, it would also like to employ the momentum from the contest to have customization of local menus get people into fast food restaurants and boost sales.

Counter Culture Alley Chicago Turning to New Gig

After 40 years of serving the Chicago counter culture, Alley Chicago will be closing its Lakeview shop as the New Year enters.

First opened in 1974, Alley was originally a “head” shop, selling paraphernalia to enhance the enjoyment of rock and roll music, getting high, and other such popular recreational activities high school and college kids were involved in. Owner Mark Thomas, who got involved in the business at the age of 19, introduced punk rock clothing to the store, in a combination which transformed the store into a “one-stop-shop” for all alternative lifestyles.

“Whether it was punk or motorcycles, rock ‘n’ roll or goth … that was the metamorphosis of The Alley into a lifestyle store,” Thomas said. “People who come in come 30 or 20 years later, bringing their child, and they say, ‘One thing about The Alley is it was always a good time.'”

The store is filled with a huge variety of goods, including leather jackets, spiked belt buckles, and rock ‘n’ roll memorabilia. Sales were adversely affected by several long construction projects nearby and the debilitating rise in real estate taxes.

“We said, ‘We can’t sustain these losses,'” Thomas said. “So we decided it was time to go out and reinvent ourselves.”

What Thomas has in mind is a new store on Chicago’s Northwest Side. “The Alley 1776” will put together a few different business concepts all housed in one location. He is hoping the space will include a coffeehouse, bar, performance stage, body piercing studio, and of course a store with classic Alley products.