Thank you for sharing!

Your article was successfully shared with the contacts you provided.

CHICAGO-Mayor Richard M. Daley wants to create a Property Tax Fairness Board to review proposed assessment reductions, and suggests the city will be more aggressive in challenging property owners’ move to lower their bills. Daley says reductions granted by the Property Tax Appeal Board, a system that already is in place, could cost the city, Chicago Public Schools and other local taxing bodies as much as $265 million.

“I’ve worked hard to keep our neighborhoods affordable for people of every background and income, yet recent decisions by the Property Tax Appeal Board work against that goal and benefit mainly large corporations,” says Daley in a statement, who has sent a resolution to the city council.

Not only is 2003 a mayoral election year, but the city suddenly finds itself facing a cash crunch.

Attorney James D. Regan, whose firm specializes in appeals, tells GlobeSt.com he doubts the measures will have much effect. Even the administration concedes that the threat of a challenge could put the brake on the amount of the reduction sought by owners. Regan notes the effort appears aimed largely at Downtown office properties, where a $1-million reduction in an assessment is relatively slight.

For instance, the Sears Tower’s assessed value is $177.9 million—or a market value of $468 million—and carries a tax bill of $30.8 million. The Aon building at 200 E. Randolph St. ($115 million assessed value, $19.9 million tax bill) and the Mercantile Exchange towers at 10 and 30 S. Wacker Dr. ($105.4 million assessed value, $18.3 million tax bill) also carry nine-figure assessments.

Regan also notes the city already has the right to weigh in on owners’ attempts to lower their tax bills, adding the Chicago Public Schools frequently intervenes at hearings.

The current tax system has given the Aon building a $302.6-million market value, even though it changed hands for $431 million in 1999. Nonetheless, building owners and operators note that property taxes are roughly the same here as they are in New York City, where higher rents more than offset the somewhat higher operating expenses.

Daley also is asking for a two-year moratorium in Property Tax Appeal Board action while the state legislature carves out a new property tax appeals system. And the mayor is not ignoring cries from officials including current Cook County Assessor James M. Houlihan, who have long noted the system generally puts heavier burden on commercial property tax payers as opposed to those who own residential properties with up to six units.

Residential property up to six units are assessed at—at least in theory—16% of market value. Meanwhile, owners of retail and office property are assessed at 38% of market value, while industrial property is assessed at 36%. Beginning at seven units, larger multifamily properties are assessed at 33%.

In every other county in Illinois, assessments are theoretically at 33% regardless of the property type.

“It’s much more complicated than they want to make it,” observes Regan, who worked in the assessor’s office under Thomas Hynes. He also has served on Houlihan’s tax forum.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.