Despite a rift among shareholders of the Multiple Listing Service of Northern Illinois, its board of directors this week approved a consolidation with a rival Chicago-area MLS. The consolidation is not a done deal yet, though, as MLSNI shareholders must also consider the transaction.
The Realtor association-owned MLSNI board of directors voted 14-4 on Wednesday to approve a restructuring plan that includes a joining with smaller broker-owned competitor Map MLS (the MLS of Mount Prospect, Arlington Heights, Palatine and Prospect Heights), and the MAP MLS board voted unanimously Thursday to approve the plan.
The consolidation will be voted on by MLSNI’s shareholders Nov. 15 during an annual meeting. “Since Realtor Boards representing 86 percent of MLSNI’s voting power have publicly announced their support for the transaction, the consolidation should be approved by an overwhelming shareholder vote,” according to an announcement today by the Chicago Association of Realtors, a shareholder that supports the MLSNI-MAP consolidation.
MLSNI is one of the largest MLSs in the nation, with about 51,000 members.
The transaction is also subject to approval by broker members of MAP, according to the announcement. “If approved, the consolidation is expected to become effective by the end of the year.”
A group of five MLSNI shareholder groups – the Realtor Association of the Fox Valley, McHenry County Association of Realtors, West Towns Board of Realtors Aurora Tri-County Association of Realtors and Oak Park Board of Realtors – had earlier objected to the consolidation plan, and threatened a lawsuit to block the transaction.
The groups had charged that there was not a financial or competitive advantage to the deal, as MLSNI already is the dominant MLS in the region and there is substantial overlap in geographic boundaries and membership among the two groups.
As with other MLS consolidation efforts across the country, the MLSNI-MAP proposal was contentious and the politics were complex. Large brokers championed the effort as a positive move, and most of the Realtor group shareholders had approved a letter of intent to study the proposed consolidation.
The Chicago Association of Realtors, North Shore-Barrington Association of Realtors and the Realtor Association of West-South Suburban Chicagoland were among the shareholder groups supporting the MLS transaction.
Those groups and brokerage company representatives serving on the MLSNI board maintained that the transaction would allow agents and brokers to be members of a single MLS rather than joining both MLSs, and would also provide a choice in MLS technology platforms.
“The Chicago Association of Realtors is thrilled that the boards of both MLSNI and MAP have approved a transaction that will result in a consolidation of the two principal MLS systems serving Realtors in the greater Chicagoland area,” said Virginia “Ginger” Downs, CEO for that association.
Dawn McAnaney, chairman of the board for the North Shore-Barrington association, said in a statement, “This is a huge step forward for the buying and selling public. Now we can concentrate on providing innovative services to assist agents in providing top notch services to the buying and selling public.”
Terry Penza, CEO for the North Shore-Barrington association, stated, “The consolidation of MLSNI and MAP is consistent with the national trend toward regionalization of MLS systems. Today, most major metropolitan areas have only a single MLS. It will also eliminate the ‘double monthly fees’ that a significant number of agents currently pay for access to two MLS systems.”
The Chicago association’s announcement states that the consolidation “eliminates the possibility of a future fragmentation of listings into different MLS systems – which could result from a migration by selected brokers or Realtor Boards (and their agents) from MLSNI to MAP.”
Inman News has reported that a few brokerage companies’ offices had temporarily pulled listings out of MLSNI over a dispute with MLS policies, though that practice ended as the proposal for a consolidated MLSNI-MAP took shape.
The new company will be a Realtor association-owned and broker-managed MLS. Brokerage company representatives represent a majority of seats on the MLSNI board, and the new company’s board will allow broker firms that purchase stock in the new company to elect 13 managers, and an additional two managers appointed by the 10 shareholder Realtor associations.
If MLSNI shareholders approve the deal, leaders of the Chicago and North Shore-Barrington associations “expect that the CEO of the new MLS will be Harold ‘Bud’ Fogel, currently the president of MAP,” according to the Chicago association’s announcement.
“(The Chicago association) believes that the combination of a strong CEO and a broker-controlled board will give the new company the kind of lean corporate governance structure that will allow Chicagoland’s MLS to operate more nimbly,” Downs said in a statement. The Chicago association has about 17,500 members.