How much is Arlington Park really worth? Experts say it's more than what assessments say
Conspicuously absent from a glossy 13-page marketing brochure created to lure potential buyers of the 326-acre Arlington International Racecourse site is a price tag.
The brochure merely asks interested buyers to submit an "offer price" and "earnest money deposit amount."
According to the owners of the track, Churchill Downs, "numerous parties" made offers on the site, including the Chicago Bears, homebuilders and a consortium that wants to keep the venue open for live horse racing.
But no one is saying how much was offered for the four contiguous parcels that make up the property.
"That's a valuable hunk of land over there," said Terry Kelly, the assessor of Palatine Township, where the property lies. "They're going to get top dollar."
But what exactly is the top dollar for the property?
Currently, the four parcels have a combined market value of $32.2 million, according to the most recent property tax assessments by Cook County Assessor Fritz Kaegi's office. But that price was calculated during the pandemic when many commercial properties received significant breaks because they weren't able to fully operate.
The previous year, the assessor's office valued the site at $44.6 million, when track operators were able to race a full season.
But Churchill Downs officials also reportedly turned down a $200 million offer for the park and its casino license, according to an antitrust complaint filed with the Illinois attorney general's office by the Illinois Thoroughbred Horsemen's Association.
"The value is based on whatever you're allowed to build there," said Mark Meskauskas, president of Arlington Heights-based commercial real estate firm Brian Properties. "But I bet it trades higher than $45 million."
At the 2019 value, when the track operated a traditional full season of racing, the property is valued at $3.14 per square foot. Real estate investment experts say some parts of the park that front busy roadways, such as Northwest Highway, Euclid Avenue, Rohlwing Road and Wilke Road, could be worth between $10 and $20 per square foot. The interior parts should fetch between $5 and $10 per square foot.
"But you also have to take into account the cost of removing the improvements that already exist there and the redevelopment costs of what you're going to build," said Jeff Kowal, senior vice president of investment sales at Oak Brook-based Edgemark Commercial Real Estate Services.
On the high end of $20 per square foot, the property would be worth $284 million. On the low end of $5 per square foot, the site would be worth more than $71 million.
"I think it's safe to say there's more value in redevelopment than continued operation of a racetrack," said Joseph Santucci, owner of Avalon Realty Associates in Rolling Meadows. "Generally, any type of new development is good for an area because everything around it goes up in value."
Most experts believe any redevelopment plans, including the relocation of the Bears, would include a mixed use of retail and residential components that would make the property far more valuable than at what value it's currently assessed.
Connie Carosielli, assessor in neighboring Elk Grove Township, believes the property will fetch much more than the current assessed value, but how much more is harder to pin down.
"There are no comps," she said of similar properties to compare to the track site. "Even if I gave you a figure, in today's inflated market, it could be totally useless."
But she warned that when the land is sold, expect a shift in the property tax burden.
Last year, Churchill Downs paid more than $3.5 million in property taxes on the site, according to Cook County treasurer's office records. Most of that went to the two underlying school districts.
Experts believe that if whoever buys the property doesn't use it for horse racing, they'll immediately tear down everything and clear the land to seek a discount on property taxes.
"Vacant land is calculated at virtually nothing," Kelly said.
But they also agree it won't stay vacant for long.
"They're sitting on an investment they want to get recouped," Kowal said.
The development also could create new revenue streams to benefit the associated taxing bodies.
"Maybe a short-term hit to the property tax revenue and base, but it will be more than made up shortly thereafter once all this new stuff gets going," Kelly argued.
There's no timeline for the announcement of the sale. Officials at the track and their real estate broker did not or would not comment on the pending sale or bids.