'Nonstarter': Bears, suburban school districts millions apart on property tax deal for Arlington

The Chicago Bears and three Arlington Heights-area school districts are millions apart on what they think the team's new Arlington Park property is worth and how much the team should pay in taxes, according to documents obtained by the Daily Herald.

During the parties' closed-door negotiations after Cook County Assessor Fritz Kaegi's reassessment of the 326-acre site, the schools suggested a $95 million value for the land, for which the Bears would be responsible for paying $7.9 million in annual property taxes for the next two years.

But new Bears President and CEO Kevin Warren called that proposed settlement a "nonstarter" and not "viable," especially considering where negotiations began in January, according to a May 4 letter he sent to the superintendents of Palatine Township Elementary District 15, Northwest Suburban High School District 214 and Palatine-Schaumburg High School District 211.

"This is an excessive sum for property that will sit idle and will have no commercial use for at least the next two years," Warren wrote. "This is simply not financially feasible and has negative consequences for all parties, including Arlington Heights and the surrounding communities."

The Bears countered with a land value of $52.5 million and annual tax payments of $4.3 million.

Kaegi's reassessment would hike the property value from $33.5 million to $197 million, which is just below the $197.2 million the Bears paid Churchill Downs Inc. for the old racetrack.

The tax bill would increase from $2.8 million - what Churchill Downs paid last year - to $16.2 million.

While Churchill and the Bears have pending appeals on the reassessments before the Cook County Board of Review, their lawyers and tax attorneys are negotiating with the school districts, which is common among commercial property owners and school districts that stand to gain or lose the most with any reassessment.

But after an in-person meeting with the superintendents on April 18 - Warren's second day on the job - he wrote that the school administrators didn't return his subsequent phone calls. He's now seeking another meeting to "engage in candid conversation to determine whether we could reach a fair agreement which would provide long term benefits to all parties," according to the letter.

And he suggested a property tax settlement among the parties would avoid the pending demolition of the racetrack's grandstand and other structures - for which the club applied for permits at village hall last week. The move is an attempt to reduce the operating cost and lower the assessed value of the land to "realize a realistic property tax during the predevelopment period," Warren said.

"Now we just need to get everyone back to the table and finish the deal we started in February, so that (the Bears) can continue to pursue the redevelopment project itself and avoid wasting time and resources on demolition and litigation with the local assessment office contesting the final value," Warren wrote.

A Bears spokesman said Thursday "the letter speaks for itself," and nothing has changed since Warren sent it a week ago.

Officials in Districts 15 and 214 said they don't have any meetings scheduled right now with the Bears but plan to talk over the summer.

District 15 Superintendent Laurie Heinz said she looks forward to engaging with the club toward "a fair and market-oriented assessment, sensible legislation, and a successful redevelopment at Arlington Park."

District 214 spokeswoman Stephanie Kim said the district supports development at the shuttered racetrack, but it "needs to make sense for all taxpayers and the school districts."

Kim said the schools' lawyers cautioned attorneys for the Bears and Churchill Downs that any settlement needs to align both with the final value conclusion in an appraisal commissioned by the districts and be acceptable to the boards of education. A deal also had to be palatable to the three-member board of review, which is "aware" of the sale price for the property and has the ultimate authority to approve or reject any settlement between parties, Kim said.

Any delays in the negotiations, she said, "were not of our making." She pointed to introduction of legislation that would give the Bears a massive property tax break while discussions over the assessment of the property were already underway in February.

The import of the bill backed by the Bears - establishing a so-called Payments in Lieu of Taxes financing mechanism - "completely changed the dynamics of the situation," Kim said.

"The implications of this legislation took time to understand," Kim said. "Additionally, the prospect of a prolonged assessment freeze also required us to recalibrate our overall strategy with our attorneys and lobbyists."

Warren said the Bears agreed to support changes to the legislation at the schools' request. The arrangement would give the districts - along with the village of Arlington Heights - approval rights on the base year property valuation before it's frozen for up to 40 years, as well as the amount of annual payments the schools and other local taxing bodies would receive from the Bears.

District 15's school board Wednesday night was set to consider a tentative settlement over at least some of the assessment issues, but it was pulled from the agenda. Heinz said the district is continuing discussions with Churchill Downs over its appeal for the 2022 assessment year, which is expected to be heard by the board of review June 2.

In a letter to three Arlington Heights-area school district superintendents, new Chicago Bears President & CEO Kevin Warren called their offer for property tax payments of $7.9 million a year at the Arlington Park property a "nonstarter." Associated Press, January 2023
Laurie Heinz
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