In Downtown Chicago, some of the biggest office landlords are seeing their property tax bills jump.
Blackstone Group’s Willis Tower, Sterling Bay’s Prudential Plaza, 601W Companies’ Aon Center and Vornado Realty Trust’s Merchandise Mart will pay close to 11 percent more in property taxes. Tishman Speyer’s The Franklin office tower, which has undergone a number of improvements, is getting hit with a 22 percent tax hike. And another 601W Cos.-owned complex, the Old Post Office, is seeing its property tax surge following the firm’s $800 million overhaul on the cavernous space.
The list is part of an analysis of the 2020 tax bill by the Cook County Treasurer Maria Pappas. The results, released Tuesday, aren’t a complete surprise given that Cook County Assessor Fritz Kaegi overhauled the way properties are assessed, revamping a system that was long criticized for giving tax breaks to big commercial property owners, while shifting the burden to homeowners, particularly in poorer neighborhoods.
The heaviest tax load is shifting over to commercial and industrial property owners, who will see a 6.2 percent increase — or $410 million — while homeowners taxes on average are rising just 1.3 percent, or $114 million.
But the treasurer’s office analysis also showed the property tax hikes that will go out later this month will also slam businesses in largely Black and Latino suburbs.
In suburban Ford Heights, the commercial property tax bill jumped 42 percent overall. While most homeowners aren’t feeling that kind of pain, some have gotten slammed. In Bellwood — which is 75 percent Black with a population of 18,000 — homeowners can expect to see an average 28.5 percent leap in their property tax bill, according to the treasurer’s report, which tracked 1.8 million bills countywide.
Tax rates will vary by suburbs and the city because the taxing bodies that include school districts, municipalities, park districts and other local government services dictate the levy. Bellwood, for example, is in Proviso Township, where homeowners carry 66 percent of the tax base because its commercial base is so small.
Cook County expects the 2020 assessments will mean $16.1 billion in property taxes rolling in this year. Despite the commercial property tax jumps, the countywide average property tax increase is just 3.4 percent year over year.
Largely Black and Latino suburbs saw the highest jumps in taxes to both homeowners and businesses, owing to a loss of residents and businesses forced to close during the pandemic, according to the report. Six of the 10 areas with the biggest leaps in residential taxes were in minority communities as were the top seven for commercial properties.
“These are micro economies,” said Hal Dardick, Pappas’ director of research. “Some of the commercial properties didn’t grow in value and even went down. Some packed up and left, and when that happens the commercial share of the levy goes down” and is shifted to homeowners.
Pappas’ analysis also found property owners in south suburbs are paying three to five times more in property taxes than those with equally valued property in the city. Much of that, too, is attributed to population and businesses that have shrunk there while levies rise.
Pappas said those results underscore the inequities of the tax system. “The 2020 property tax increases are exacerbating financial stresses in these communities and thwarting economic progress and generational wealth-building,” she said.
The analysis did not address the tax hole the county already is in based on the nearly $200 million in property taxes that were not collected from 2019, and another $1.1 billion from last year. Much of that is expected to be collected when the second-half installment bills are paid later this year.