In a rare move, officials at Lake Zurich Community Unit School District 95 are poised to contest a commercial property tax appeal that could potentially result in an almost $200,000 tax refund.
Vicky Cullinan, the district’s assistant superintendent of business and operations, said that because of the potential loss of funds to the district, as well as the nature of the case, staff members recommended challenging the appeal to district board members at a recent committee meeting. It would be the first time in its known history that the Lake Zurich school district is filing as an intervenor on its own regarding a commercial property tax appeal, Cullinan said.
“We believe there is merit to challenging their assessment,” she said. “Frankly, when they pay less, all of you as taxpayers pay more.”
The issue revolves around more than an $1 million difference in appraised value for a former Motorola site, now owned by White Oak Project Co. and occupied primarily by Continental Automotive Systems. The commercial building, called The Reserve at Deer Park, sits on roughly 41 acres located near Lake Cook and Rand roads.
In a commercial appeal filed March 18, White Oak requested a hearing with the Illinois Property Tax Appeal Board regarding a property valuation at the commercial building, 21440 W. Lake Cook Road. Real Estate Analysis Corp last October conducted an appraisal and valued the property at $23.5 million, or an assessed value of about $7.83 million as of Jan. 1, 2015, according to a March 17 letter sent to the Illinois tax appeal board.
Cullinan said the property was valued at about $35 million, adding such a difference in value is uncommon.
Michael Andre, who works for Chicago-based firm Eugene L. Griffin & Associates and is representing White Oak in the appeal, did not return numerous requests for comments. The firm specializes in state and local tax law, according to its website.
Cullinan said the district is working with the Lake County Assessor’s office to determine whether to obtain its own appraisal.
A preliminary appraisal, if needed, could cost the district between $3,500 and $4,000, plus another potential $1,500 to have it finalized, she said. If there is a hearing, it can be another $15,000 to $20,000 in potential legal feels on top of fees for expert testimonies.
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If White Oaks’ appeal prevails at 100 percent of its request, the district would have to refund about $192,024, an amount based on the current tax rate to be allotted in a future tax distribution since the case could take years, Cullinan said.
“This level of tax refund warrants the expense of filing as an intervenor,” Cullinan told the board. “We’re the biggest portion of the taxing body, so we’re the most impacted.”
While the district has been involved in various shared interventions, including an ongoing one involving a retail center on Route 12, Cullinan said this would mark the first time the district files one on its own.
The district board is expected to decide whether to file the intervention during a meeting on May 26.
“I think it’s a no-brainer we need to participate in this,” Board President Doug Goldberg said at a recent committee meeting.
Martin Paulson, the Lake County chief assessment officer, said a lease connected with any property would make the appraisal more complicated, which is the case involving White Oak and its Deer Park building.
Motorola built the seven-story building in 2001, and Germany-based automotive supplier Continental bought Motorola’s automotive electronics business and the building in 2006. Continental sold the property for $40.5 million in 2014 to White Oak and leased back about 59 percent of the building space.
“That (purchase price) may or may not be a value we can utilize,” Paulson said, adding it may not represent the true real estate value.
Christine Won is a freelance reporter for Pioneer Press.