How DuPage Airport business tenants have avoided paying property taxes for years
Robert Werderich used to pay the property taxes he owed for operating his Illinois Aviation Academy out of space he rents from the DuPage Airport Authority.
But he stopped paying years ago, which explains why his company now owes $187,937 in back taxes to 13 taxing bodies, including the airport itself.
Werderich is exploiting a loophole in the state property tax law that fails to penalize tenants operating businesses on government property who ignore property tax bills because the property can't be seized for noncompliance.
Werderich's case is not unique at the DuPage Airport.
“The issue for me was that none of the others were (paying), so I stopped,” he said. “If no one else was, then I wasn't, either. That was my position.”
Werderich is among at least seven current or former tenants of the airport that owe nearly $770,000 in back taxes, according to property tax sale information released by DuPage County Treasurer Gwen Henry.
The tax sale is where delinquent property taxes are purchased by investors who will either receive interest from the property owner to clear the debt or — after a couple years of nonpayment — be allowed to claim the deed on the land. However, Henry said, no one wants to buy the tax debt for the airport tenants because they can never claim the deed because it's government land.
There's also no mechanism to force the tenants to pay the tax obligation.
“That sounds pretty crazy,” said state Sen. Jim Oberweis, whose district covers the DuPage Airport, “but this is the first I've heard of it.”
One parcel, which used to house Scott Aviation and is now leased to AGS Partners, owes $268,177, according to records from both the county treasurer's office and the airport authority. It's unclear how long the tax debt has gone unpaid, but Scott Aviation's original lease began in 1999. Another active leaseholder, Travel Express, owes more than $21,000 in back taxes, according to the county treasurer's records.
There are several more unpaid tax bills dating back decades for corporate entities that have been gone for at least 10 years, airport officials said. Those taxes probably will never be recouped, county officials said.
“It irritates me,” Henry said. “We've been working on this for a long time.”
But DuPage Airport Authority officials are pleading ignorance.
“The DuPage Airport Authority does not receive tax notifications and had no knowledge of the amounts owed,” executive director David Bird said. “We are very concerned about this and at (Wednesday's) board meeting, we will be discussing the issue in detail to determine what options the authority has to remedy this situation.”
The active lease agreements with the companies operating at the DuPage Airport all stipulate the tenants are responsible for any assessed taxes. There is no penalty in the lease agreement for failure to pay the taxes.
“If the airport says we all need to pay the taxes, then absolutely, because that's my obligation,” Werderich said. “On the other hand, my landlord has not taken an enforcement position.”
The county board ultimately has oversight of the airport authority and could require future lease agreements carry some punitive action for tenants who are delinquent with their taxes. County board Chairman Dan Cronin said the airport board should “explore options to help ensure commercial properties operating at DAA pay their fair share of property taxes.”
The parcels are all located within the boundaries of St. Charles Unit District 303, which is owed the lion's share of the back taxes. Officials don't believe the school district's other taxpayers were affected by the shortfall from the airport properties.
“We have no knowledge of the affect of delinquent taxes on the following year's tax levy or whether there is an increased tax burden to other taxpayers,” said Carol Smith, a district spokeswoman.
But Michael Fortner, the departing state representative whose district covers the airport, believes the school districts' other taxpayers are covering for the airport tenants.
“You as a taxpayer are responsible for a certain portion of the tax base and if some people aren't paying, then you're going to get stuck with a higher portion of the levy,” he said.
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Contact Jake at jgriffin@dailyherald.com or (847) 427-4602.
Unpaid tax bills
Seven current and former businesses that operate on property leased to them by the DuPage Airport Authority owe nearly $770,000 in back property taxes:
• Scott Aviation/AGS Partners*: $268,177.39
• AAA Properties: $230,889.76
• Illinois Aviation Academy*: $187,937.11
• Camden Aviation: $52,776.24
• Travel Express Aviation*: $21,364.09
• Cameron Aircraft Interiors: $5,063.44
• Aerospace International: $1,824.83
*Current leaseholders
Source: DuPage County treasurer