Many Chicago property owners have complained about an increase in property taxes since Cook County Assessor Fritz Kaegi took office, but a new analysis suggests he may still be underestimating the values.
An analysis of some large Chicago properties by Crain’s Chicago Business shows that despite landlords claiming Kaegi unfairly targeted them, the values he assessed were actually lower when compared with the assessments performed before he took office in 2019.
The AMA Plaza office tower, for example, was appraised by the property’s lender in June with a value of $550.5 million, but Kaegi’s estimate for the tower’s value was $483.4 million. Additionally, the K Square Apartments in Lincoln Park were appraised at $122.5 million in October 2020 and Kaegi’s administration assessed the property value to be $77.5 million. One of the biggest discrepancies comes from the McDonald’s headquarters building in Fulton Market, which was valued at $409 million when it was sold in October 2020. The assessment by Kaegi came out to $213.6 million.
The analysis by Crain’s looked at 35 buildings and found that the property assessments did rise significantly from 2020 and even doubled for 11 of the buildings. Despite that, Kaegi’s new assessments consistently came in below the building’s appraised values. While the property values increased by 91 percent on average from 2020 to 2021, the new values were 24 percent lower than the appraised values.
Since he began his campaign for assessor in 2018, Kaegi has said that his predecessor Joe Berrios had a history of undervaluing commercial properties, which placed a larger tax burden on homeowners. He argues that the commercial assessments would logically have to increase because they were “irrationally low” to begin with.
Joe Berrios faced a federal probe due to reports that he allegedly got kickbacks in exchange for intentionally undervaluing commercial properties. During his eight-year tenure as Cook County assessor and his time as a commissioner on the Cook County Board of Review before that, Berrios’ campaign raised millions of dollars from lawyers representing property owners seeking to reduce their taxes.
Kaegi’s assessments have led to a major shift in the Cook County tax base. In 2018, residential properties made up 48 percent of the total assessed value in the eight Chicago townships and commercial properties made up the remaining 52 percent. Now, the residential properties account for 37 percent of the total assessed value, with commercial properties making up the remaining 63 percent.
Commercial landlords have accused Kaegi of trying to score political points with homeowners, but he says he is just trying to get the numbers right.
[Crain’s] — Victoria Pruitt