Back in June, Crain’s Chicago Business reported that in 2019 local governments intervened in about 200 property tax assessment appeals with the Cook County Board of Review — “up from just 11 in 2018 and 13 in 2017. Typically, local governments intervene to argue that a property is undervalued, but now they’re seeing values are too high.”
Local taxing bodies typically intervene when they fear that property owners will appeal their assessment to the Illinois Property Tax Appeal Board or the Circuit Court of Cook County. If the owners win, the taxing body is on the hook for a refund, sometimes years down the road, a prospect that could mean less revenue and massive legal fees.
Many of those local governments were school districts, leading Crain’s to title the article: “Why local school districts are lining up against Fritz Kaegi?”
But the case of one such intervention that happened in Oak Park tells a different story than that headline suggests. Kaegi, the Cook County assessor, initially assessed the property at Vantage Oak Park Apartments, 150 Forest Ave. in Oak Park, at around $90 million. The Vantage owners appealed to the Board of Review, which lowered the tax assessment to around $54 million.
Initially, a spokesperson for the Board of Review told Wednesday Journal that Oak Park Elementary School District 97 petitioned them to lower Vantage’s assessment in order to avoid being on the hook for a tax refund. But a subsequent analysis of Board of Review documents and interviews with Kaegi and District 97’s attorney revealed that this was not the case.
Scott Ginsburg, D97’s attorney, said the district supported Kaegi’s initial assessment of the Vantage property. He said the district has, however, settled appeals by property owners on other large buildings in Oak Park, such as the Emerson Apartments at 1135 Westgate St.
“Working together with independent valuation experts, the Board of Review, taxpayers and their attorneys, District 97 resolved multiple years with 28 large taxpayers who agreed to waive refund claims while seeing their assessments, in total, increase by approximately 25 percent compared with the prior year.”
Ginsburg said the reason the district settled with the Emerson, for example, and not Vantage is because “the appraiser we were working with was able to support the assessment for Emerson, but not Vantage.”
Ginsburg stressed, however, that although D97 “settled many appeals, it never advocated for a reduction. In the end, each settlement was very similar to what it would have been had the taxpayers appealed to the Circuit Court or [the property Tax Appeals Board].”
But what’s driving the gap between Kaegi’s assessments and the Board of Review’s assessments? That’s up to interpretation.
“I can tell you that in the world of real estate valuation, there is a wide range of data that experts rely upon and if everyone is not looking at the same data, you can get a lot of values,” Ginsburg said.
“Mr. Kaegi has been leading an effort to try to get taxpayers to be more forthcoming with the actual data that supports their assessment and being that they’ve resisted giving it to him, he’s left to rely on the data available to him, which is data from the market,” he continued.
Oak Park Township Assessor Ali ElSaffar said the divergence in assessments could hinge on which factors appraisers emphasize to derive value.
For instance, the owners of Vantage argued in their petition for a reduction of their 2020 assessed valuation that more weight should be given to the relative cost of rental units than to a comparison of sales of nearby multifamily residential apartment buildings. An appraisal can often hinge on which value factor an appraiser emphasizes.
“Sometimes appraisals are called an opinion of value for a reason,” said ElSaffar, whose family owns rental properties.
“When you look at the overall assessed value of apartment buildings vis-à-vis what they were selling for, there was a mismatch,” he said. “There’s always some mismatch, but the mismatch was bigger in apartment buildings than other properties. So, I think Assessor Kaegi came in wanting to correct that.”
Kaegi addressed the disparity between his office’s assessments and the Board of Review’s assessments.
“There have been pretty big changes in commercial assessments from what we see as evidence and what they see as evidence,” Kaegi said. “We have a hard time understanding where they land sometimes and Vantage is a great example.”
The bottom line, the assessor said, is that too much of the tax burden falls on average homeowners. For instance, if Vantage owners paid property taxes based on Kaegi’s assessment, they would’ve paid about $1 million more. That’s more money that other taxpayers have to come up with.
“This is literally the difference between the average homeowner’s bill going up or down in many communities,” Kaegi said.
CONTACT: michael@oakpark.com
