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High-Rise Condominium Building (Chicago)1
Property Type: High-rise condominium building
Savings: Over $8 Million in tax savings2
Location: Chicago, Illinois (Cook County)
Description: Premier 363 unit high-rise condominium building
- Reduced underlying market value of units
- Obtained vacancy relief for developer-owned units
- Obtained over $8 Million in tax savings2
Elliott & Associates was contacted by a condominium property management firm to review the assessments of a newly-constructed, premium condominium building in downtown Chicago. The developer previously hired a prominent Chicago-based law firm to contest assessments and that firm obtained standard vacancy relief for un-occupied units owned by the developer. No relief was obtained for the units the developer sold (i.e. the occupied units). Our firm was asked to if we could provide additional relief.
Through interviews with the developer and property manager and after a thorough review of assessments, our team concluded additional opportunities for assessment relief were available. Prior counsel pursued vacancy relief for unoccupied/developer-owned units, which was proper; however, we determined the underlying market value of all units in the building, including those that received vacancy relief, were overstated. Furthermore, we learned the Assessor’s records overstated the common area percentages of certain units causing assessments of those units to be additionally inflated.
Elliott & Associates obtained assessment reductions from both the Assessor and the Board of Review. During the first year of engagement, we obtained an additional 20% reduction over the prior law firm’s assessment reduction. This resulted in approximately $650,000 in savings for that tax year. Appeals were filed in subsequent years further reducing assessments. We obtained over $8 Million in tax savings before exemptions during the first three years of our engagement.
Our team convinced the assessing officials that all units in the building were over-valued based on our analysis of current unit sales. Sales were adjusted downwards for tax purposes due to the inclusion of personal property and construction extras in the purchase price. We then convinced the assessing officials to apply occupancy factors to the already reduced values of the vacant, developer-owned units reducing those assessments further. Finally, we caused the Assessor to correct his records with regard to the common area percentages of certain units causing them to be additionally reduced.
1Similar but not actual building.
2Tax savings before exemptions.