Facing huge tax increase, Bears challenge $197 million assessment of Arlington Park
A recent reassessment of Arlington Park raises its property value more than five times the previous amount, a move that would lead to a massive tax hike for its new owners, the Chicago Bears.
Cook County Assessor Fritz Kaegi earlier this year reset the land's value at $197 million, just a hair below the $197.2 million purchase price the NFL team greed to pay former owners Churchill Downs.
The previous assessment on the shuttered horse-racing facility was about $33.5 million.
The Bears have filed an appeal to the three-member Cook County Board of Review, which is scheduled to hear the matter June 2.
Last year's taxes on the property were just under $2.8 million.
Board of Review Commissioner Samantha Steele said her staff calculated that at a $197 million assessment, and based on last year's effective tax rate of 8.21%, the property's taxes would be approximately $16.2 million.
In a statement Wednesday, the Bears labeled the new assessment "excessive."
"Paying property taxes is part of being a member of the community," the statement reads. "We want to pay our fair share. But the proposed assessment of the unoccupied property we purchased, and the taxes associated with it, would be more than five times what the property generated when it had an income-producing racetrack operating on it. Arlington Park would not be redeveloped by anyone at such an excessive property tax rate."
Scott Smith, Kaegi's chief of staff, said the price of a recent sale is a valid way to determine the market value of a commercial property that, like Arlington Park, is not currently generating revenue.
But that wasn't the only data that factored into the new assessment, he added.
"In assessing the former Arlington racetrack property, which was recently purchased by the Bears for $197 million, our office looked at various estimates of the property's value," Smith said in a statement. "These estimates included the recent sale, a cost analysis, and other recent transactions for large tracts of land in the Northwest suburbs.
"In each approach, we found the market value to be consistent with both the Bears' recent purchase price and other large properties which were purchased for redevelopment," he added.
While the horse-racing facility is not in use, the Bears have not applied for vacancy status on the property, Smith said.
"Although the racetrack is closed, it has the capacity to be fully functional today," he added. "So in using a cost approach, we examined the current cost of maintenance and depreciation."
The Arlington Park grandstand, rebuilt after a devastating fire in 1985, is 33 years old but has an expected useful life of 50 years, Smith said.
"Assuming the physical age and effective age are approximately the same, depreciation was estimated at 70%," he added. "Since we know that the Bears plan on redeveloping the site, we need to consider what it would cost to demolish the existing improvements."
In its assessment, Kaegi's office deducted demolition costs from the land value, Smith said.
Steele said the size and complexity of the Bears' appeal could affect the time typical frame of a decision by the Board of Review. But like every other case, they are approaching it with impartiality.
"I imagine it will take a little more time," Steele said. "We give the same weight and same consideration to everyone."
If the Bears are unhappy with the Board of Review's decision, they could appeal to the Property Tax Review Board, and then the Cook County State's Attorney's Office, Steele said.