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Neighbors foot tax bill for North Central College president's home

Before it became North Central College President Troy Hammond's home in 2013, the house at 409 E. Chicago Ave. in Naperville was responsible for more than $30,000 a year in property taxes.

Now, the three-story Victorian-style house that had a $1.2 million “fair market value” when it became part of the private college's campus is exempt from property taxes, as are presidents' houses at many colleges.

That's because state property tax laws allow colleges to receive tax exemptions under a broad definition of buildings serving an “educational purpose” on nonprofit college campuses, including for entertainment purposes.

“While it serves as a residence, it also serves to accommodate special guests and hosts events for students, faculty and staff,” said Jim Godo, assistant vice president for external affairs at the college. “There are also very important college functions that happen there.”

The Illinois Department of Revenue granted property tax exemptions for the house and an adjacent vacant lot shortly after the March 2013 purchase, according to agency records. The properties received a partial exemption in 2013 because they were privately owned for a short time.

In 2014, more than $6,500 in property taxes were paid, compared to the $33,736 paid the year before. This year, no property taxes will be owed.

Instead, that burden will shift to other taxpayers. Naperville Unit District 203 was the largest recipient of property taxes generated by what is now North Central's president's residence. Many suburban school districts rely almost exclusively on property taxes for operational revenue. Hammond sends his four children to District 203 schools.

“Spread out over everyone, the cost isn't overwhelming, but it's probably not being a great neighbor,” said David From, Illinois state director for Americans for Prosperity, a national tax policy reform organization. “What it is, though, is another symptom of a tax code that has all these carve-outs that the average person doesn't get to take advantage of, and like most loopholes, it's the average person who winds up paying.”

Godo said the college was eyeing nearby properties to convert to the president's residence even before Hammond was hired to take over for former President Harold Wilde. Wilde lived in a home at 329 S. Brainard St. that had also served as the home for four previous college presidents dating back to the 1920s.

That residence, which is also tax-exempt, is now home to the college's entrepreneurship and honors programs. There are no plans to return that house to a residential use, Godo said.

The college also owns the house at 28 S. Loomis St., which was donated in 2008. It is used for meetings and conferences, college officials said. While it is referred to as the A.A. Smith House by college officials, it is more notoriously known as the home where Marilyn Lemak killed her three young children and attempted suicide in 1999. It is also tax-exempt.

Godo defended the college's decision to seek the exemption for the new president's home despite owning several residential properties.

“Everything we've done has been very transparent and followed all the letters of the law,” he said. “We don't see it being unneighborly at all.”

Some residents agree with college officials. They said the benefits of having the college in town dwarfs the loss of property tax revenue of a single home.

“The employment and purchases and everything they do outweighs the $30,000 by a long shot,” said Peter Fissinger, a neighbor of the college and member of the city's Historic Sites Commission.

The new president's residence is in the city's historic district. While it's now part of the college campus, it still has to follow the city's stricter guidelines for renovations and appearance, which city officials maintain is an important facet.

“It is a big deal and is something we watch, but obviously we're more concerned when a big-ticket commercial property changes hands and comes off the tax rolls,” Naperville City Manager Doug Krieger said. “But where it's located, we're more concerned about the character and how it fits in the neighborhood.”

The practice of receiving tax exemptions for college president residences is not uncommon in the state, or even the country, though some states like Texas have changed laws and fought court battles to keep such properties on the tax rolls. It might be time to re-examine such exemptions, said incoming state Rep. Grant Wehrli, whose district includes the North Central campus.

“Have we moved the line too far with a college president's home? It does raise an eyebrow, and it's worth looking into,” he said.

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Contact Jake at jgriffin@dailyherald.com or (847) 427-4602.

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