Kaegi values Thompson Center at $223M

A sky-high property tax valuation sucked the air out of excitement surrounding the Thompson Center’s new look.

Cook County Assessor Fritz Kaegi appraised the iconic building in downtown Chicago at almost $223 million for the 2023 tax year, more than double the $105 million it sold for last year, Crain’s reported. 

Mike Reschke, who purchased the building with fellow developer Quintin Primo, with plans to renovate it for Google, was critical of the valuation.

“The best indication of value is what we paid for it,” Reschke said.

Assessors aren’t supposed to consider recent sale prices when setting valuations, to avoid bias, the outlet said. The $105 million sale was not used as the basis for valuation, because it was an unconventional transaction, the assessor’s office said.

The assessed value equates to $236 per square foot, and the property’s owners have filed an appeal.

“It’s unfortunate that the assessor cannot just look at the facts and be more reasonable. I don’t get it,” Reschke said.

Kaegi treated the Thompson Center as a second-tier downtown office building, comparing it to similar Class B properties. 

This is the first valuation of the 17-story building since its completion in 1985. It was previously owned by the state of Illinois and was tax-exempt until July 2022, when Reschke and Primo bought it. Google plans to move in by 2026.

Kaegi’s valuation methods contribute to the exorbitant property tax burden for commercial landlords, potentially driving investors away from Chicago, critics say. Some allege political motivations, contending that Kaegi aims to enhance commercial property valuations to benefit homeowners.

Kaegi has defended his approach, saying it addresses assessments by his predecessor that were too low.

The Thompson Center valuation coincides with an office market that’s grappling with high vacancy rates, fueled by the remote-work era. 

If the Thompson Center appeal reaches the Cook County Board of Review, it could become a pivotal case, testing the alignment of new commissioners with Kaegi’s assessment methods.

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