Commercial property owners in Downtown Chicago are still reeling from the most recent property assessments from Cook County Assessor Fritz Kaegi, which raised their tax obligations.
Reassessment notices were sent out to property owners in North Chicago Township and for those who own non-residential properties, it was quite a shock, Crain’s Chicago Business reported.
The total assessed value of non-residential properties jumped 60 percent from the previous 2018 assessment. For comparison, the assessed value of residential properties rose just 15 percent in the same time period.
A key part of Kaegi’s successful 2018 campaign was a promise to shake up the assessor’s office as it had been accused of favoring commercial landlords under the leadership of former Cook County Assessor Joe Berrios.
“Study after study has shown they were way off the market values then,” Kaegi said in an interview with The Real Deal about Berrios’ models. “We need to take favoritism out of the valuation process. We were off track and we’re getting it back to where it should have been all along.”
Berrios is currently under investigation by a federal grand jury for a number of assessments made in the central business district and high-end neighborhoods.
The reassessment process will ease the property tax burden on residential taxpayers and instead place more of it on the owners of commercial properties such as apartments and office buildings.
In 2018, the assessed value of properties in North Chicago was more evenly split between commercial and residential at 54 percent for commercial and 46 percent for residential. The new assessments shift the balance as commercial properties now account for 62 percent and residential properties make up the remaining 38 percent.
While the reassessments are good for residential property owners, some landlords criticize the new values, saying the higher taxes will scare off potential investors.
An example of the reassessment is the 480-unit apartment tower Cityfront Place. The property was sold for $154.5 million in 2020, but it is now valued at $227.9 million.
If property owners aren’t satisfied with an appeal, the Cook County Board of Review could reduce the assessed values.
Kaegi’s office assesses properties on a three-year cycle that started with the northern suburbs in 2019, moved to western and southern suburban Cook County in 2020 and made it to the City of Chicago this year. Kaegi released the assessed values for half of the eight townships in the city. It still has work to do in South Chicago, which includes the Loop.
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[Crain’s] — Victoria Pruitt