Suburban Independent Motel

Suburban Independent Motel
Over $460,000 in tax savings

Suburban Independent Motel

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Suburban Independent Motel

Highlights

Property Type: Suburban independent motel

Savings: Over $460,000 in tax savings

Location:  South suburban Cook County, Illinois

Description:  104 room independent motel

Key Results:

  • Lowered assessment about 40% below level obtained by prior law firm
  • Obtained corrected tax bill – cut about in half from incorrect level (Certificate of Error)
  • Over $460,000 in tax savings

The Challenge

Elliott & Associates was engaged by the owner of three independent motels located in Cook County.  The client was represented by another law firm for several years and, although that firm regularly contested his assessments, the client believed his taxes were still excessive.  In addition, the prior firm failed to obtain any reduction for the subject motel for the most recent tax year. As a result, taxes were scheduled to double.  Elliott was asked to resolve these issues.

Our Approach

The prior firm contested assessments by presenting the assessing officials with an analysis of recent income and expenses.  While the assessing officials reduced assessments based on this data, the resulting valuation was well in excess of the market on a per room basis using both the income and sales comparison approach.

Elliott interviewed the client and learned that:

  • Revenues and NOI had declined steadily over the past five years
  • 15% of the rooms were uninhabitable
  • A large number of rooms were rented on a long-term basis at a substantial discount
  • The client had a current appraisal that supported a much lower valuation.

It did not appear that these facts had previously been brought to the attention of the assessing officials.

We reached out to senior officials in the Assessor’s office to discuss the prior year’s tax bill (scheduled to double) and asked them to rectify this problem by issuing a Certificate of Error and an adjusted tax bill so the client could pay reasonable and affordable taxes.  Elliott also reviewed documents submitted by the prior law firm to the assessing officials and the file notes of the assessing officials so we were prepared to address the issues they identified.

Results

The Assessor issued a Certificate of Error reducing the doubled assessment so it was on par with the prior year.   The Treasurer then issued an adjusted tax bill, which the client paid.  The Certificate of Error has been confirmed by the Cook County Board of Review and needs to be approved by the Court.  As this Certificate of Error has been approved by the Assessor and Board of Review, we expect approval by the Court in the near future.

We also contested the current year assessment and convinced the assessing officials to reduce it about 40% below the lowest assessment obtained by the prior firm.

So far, we have saved this client over $460,000 in taxes for this motel over a two-year period.  Additional appeals are pending in Court for tax refunds.