Keystone granted property tax exemption

The village plans to continue the case and appeal the ruling

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By Nona Tepper

The dispute between Keystone Montessori School and the village of River Forest will continue after the Illinois Department of Revenue granted the nonprofit school a property tax exemption on Dec. 3. In a statement, the village said it plans to appeal the ruling. 

Keystone took the village to court in March, alleging River Forest officials said they would only approve the school's zoning permit if Keystone agreed never to seek a property tax exemption. The lawsuit claims its agreement with the village contravenes public policy and constitutes unconstitutional condition, illegal contract zoning, illegal perpetual contract, and equal protection violation. The school is asking for reimbursement for attorneys' fees, $1.1 million in property taxes it said it has paid over two decades, and an end to its agreement with the village. 

The state's Department of Revenue granted Keystone total relief for the 2017 tax year, and Vicki Shea, director of Keystone, said in a statement that she was pleased with the ruling.

"Now we can project a budget surplus and be confident that Keystone Montessori will continue to serve the students, parents, and taxpayers of River Forest in the best way possible," she said. 

Keystone's complaint was filed just weeks before Busey Bank moved to foreclose on the school's more than $2 million mortgage, according to property records. 

Attorney John Mauck, from the Chicago-based firm Mauck & Baker, which is representing Keystone, said that if the nonprofit school can break its agreement with the village and become tax-exempt, Keystone will be solvent and able to pay its mortgage and other obligations. Keystone has not paid its 2017 taxes yet. He said the school had been relying on private donors to help pay the taxes, but this past year donors dried up. 

The Department of Revenue's ruling recognized all schools are tax exempt by law, Mauck said. 

"Now that the department has ruled that River Forest has been acting illegally, we hope [the village] will cooperate with, rather than litigate against, a school that has been saving local taxpayers about $300,000 per year in public education costs," he said in a statement. 

Keystone filed a request with the Cook County Board of Review for a property tax exemption, which recommended that the Illinois Department of Revenue deny the request. The Department of Revenue, however, went against the recommendation and granted Keystone property tax exemption status. 

In a statement, the village said it was pleased with the Board of Review's recommendation and that it intended to appeal the Department of Revenue's decision. The village added that it will continue to defend their original agreement with Keystone.

"These appeals are a long process, but in the end we believe that our contract, [which] Keystone willingly signed 20 years ago, is valid and enforceable," the village said in a statement. "The village remains ready, however, to work out an agreeable resolution of this matter with Keystone Montessori should they want one, as we would with any of our institutions and businesses in River Forest."

The case is still pending in the Cook County Circuit Court.

CONTACT: ntepper@wjinc.com

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