ASSESSMENT APPEAL CASE HISTORY CONDOMINIUM

Facts

Allen A Lefkovitz & Associates, P.C., was retained by a developer who was building a 169-unit residential condominium in the South Loop of Chicago. In dealing with condominiums, the Cook County Assessor traditionally determines the value of the entire development and apportions that value to each of the individual units. For both new construction and conversion projects, the Cook County Assessor takes into consideration the initial closing dates of the individual units when issuing his initial assessment. Usually the initial assessment is a partial assessment of the building. In this instance, the developer felt that the assessor had inaccurately accounted for the units that were sold during the tax year as well as in the subsequent years.

Issues

  1. Whether the assessor or the Cook County Board of Review properly assessed those units sold after January 1 of the tax year.
  2. Whether the Board of Review properly applied the 10 percent level of assessment rather than the 16 percent level of assessment required by statute.
  3. How to lessen the financial impact of the refund to the Board of Education to facilitate a settlement of the case.

Proceedings

  1. Our careful research confirmed the developer's view that the assessment did not take into consideration the dates on which units were sold. We took the case to the Board of Review, which provided inadequate relief.
  2. The next step was an appeal of the Board of Review's decision to the State of Illinois Property Tax Appeal Board.
  3. Based on settlement negotiations with the Board of Review, the taxpayer and the Board of Review agreed on a significant reduction in the assessed value of the property.
  4. Under Illinois law, taxing bodies that may be substantially impacted by a refund of taxes may intervene. In this case, the Chicago Board of Education, which received 40 percent of the taxes paid, did intervene. The Board of Education objected on the grounds that (1) the Board of Review's determination of market value was substantially lower than the actual value of the entity, (2) that the appropriate level of assessment is 16 percent of market value and (3) the amount of the reduction would have a significant impact on its finances. The Board of Education argued that it could not afford to refund such a large amount of funds because the money had already been received and spent. A refund of that magnitude would have had a severe impact on the budget and operating revenue of the Chicago Public Schools.

Resolution

  1. By successfully negotiating with the Board of Review and the Board of Education, we were able to obtain the reduction we initially sought.
  2. The $618,585 real estate tax was reduced to $325,000, or a refund of $293,500 plus interest.
  3. The Board of Review and the Chicago Board of Education approved the application of the 10 percent level of assessment rather than the statutory 16 percent level of assessment.
  4. By allowing that portion of the refund payable by the Board of Education to be paid over three years, we were able to successfully resolve this matter rather than having to go to hearing before the Property Tax Appeal Board. The initial refund amounted to approximately one half of the total refund. The remaining refund would be paid in two equal installments, with interest.