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* Background is here. From Tom Shaer at the Cook County Assessor’s Office…
The recent article in The Economist about property assessment in Cook County, Illinois was incomplete, not even somewhat balanced and thus very unfair.
Approximately 95% of the information the Cook County Assessor’s Office (CCAO) provided to reporter The Economist was not used. We do not expect every media outlet (including Capitol Fax) to print everything we say, or even half, but when our side of the issues is virtually ignored, that doesn’t allow readers to make up their own minds.
Worse, The Economist failed to ask CCAO about most of the article’s points, so we had no opportunity to add information to address them. We have never had that concern with CapFax.
The Cook County Assessor’s Office has long maintained that the Chicago Tribune pieces about property assessment in Cook County are deeply flawed. Their opinions are based primarily on a sales ratio study not conducted by assessment or appraisal professionals; such private ratio studies are not admissible in Illinois courts. None of this appeared in The Economist.
The Economist printed nearly 200 words of quotes and descriptions of criticism by six different critics of Assessor Joseph Berrios, including three political opponents. It printed only 36 words representing Assessor Berrios’ response. That extreme imbalance violates standards of fairness.
The term, “reciprocal gift-giving” was used to describe assessments and appeals but The Economist did not request details on how property is assessed and how appeals are decided. We state, unequivocally, that there is no rampant over-assessment or under-assessment of property in Cook County.
CCAO was never asked about a comparison of Cook County to New York City’s lower success rate for appeals. But The Economist nevertheless made that comparison, which is grossly misleading because it is an apples-to-oranges concept.
Why? Because New York’s assessment system produces wildly incorrect low assessed values. With properties already assessed so low, why would most appeals be successful?
New York Mayor Bill de Blasio’s spokesman, Wiley Norvell, and George Sweeting, Deputy Director of that city’s Independent Budget Office, have publicly called for wide legislative changes to eliminate “major inequities…built into the system.”
Yet, somehow, The Economist suggests New York City is a shining example to which Cook County should aspire. Nonsense.
No one in the Cook County Assessor’s Office believes any media outlet should seek to please public officials. However, media should desire to possess all facts and information and present them fairly or at least a little more evenly. Thank you.
posted by Rich Miller
Thursday, Nov 16, 17 @ 2:36 pm
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Utter crock. The Tribune report addresses all of this nonsense in simple terms.
Comment by Anonymous Thursday, Nov 16, 17 @ 2:40 pm
Cool. Respond to this charge: your boss gets most of his donations from property tax appeals lawyers. Weirdly, his tenure has also coincided with a massive increase in the number of appeals, each of which makes money for these lawyers.
If all you can say to that is “but it’s legal!”, I say you’re a joke and you can shove your whining about “unfair” coverage.
Comment by PJ Thursday, Nov 16, 17 @ 2:45 pm
Some valid points. But when a property changes hands in a fair market deal for nearly $1.3 billion and is placed on the tax rolls for half, we don’t need an explanation; we need a federal investigation. Paging Scott Drury.
Comment by Anonymous Thursday, Nov 16, 17 @ 2:45 pm
Tom Shaer vs. The Economist. As if.
I’ll bet they’re working on the retraction right now. Lol.
Comment by 47th Ward Thursday, Nov 16, 17 @ 2:59 pm
As an immigrant, why is property assessed at a fraction of value? IF a piece of property is worth $1 million, that should be the assessed value. Not $333,333.33 like is done outside of Cook County. Nor whatever it would be in Cook County.
Comment by Anyone Remember Thursday, Nov 16, 17 @ 3:03 pm
Berrios, as evidenced by his tax system, is unfit to be the arbiter of what is fair and unfair.
Comment by Just Visiting Thursday, Nov 16, 17 @ 3:08 pm
Anyone Remember - short answer - because different types of property are taxed differently. E.g., farmland, commercial, industrial, homes. The tax rate is the same for all, but since they’re assessed at different percentages, the effect is to distribute the tax burden differently.
Comment by Rasselas Thursday, Nov 16, 17 @ 3:19 pm
Are these appeal numbers just the appeals to the Assessor’s office or are they incorporating Board of Review appeals too?
Comment by Anonish Thursday, Nov 16, 17 @ 3:26 pm
LOL that Economist comment by Shaer. Back to sports with you, dude.
Comment by Amalia Thursday, Nov 16, 17 @ 3:53 pm
So they’re sticking with the spin that when half of property owners appeal and they find out they have been over assessed, that’s a good thing not a bad thing? Gotcha.
Comment by Ron Burgundy Thursday, Nov 16, 17 @ 3:58 pm
“Anonymous” is referring to the Willis Tower, the facts about which have been grossly misrepresented in speeches and interviews by people with little or no knowledge of valuation and assessment of real property.
First, Willis Tower actually sold for $1.05 billion, which is nearly 30 percent less than has been incorrectly stated by critics of the Assessor’s Office. That figure is recorded in sale records, rather than publicity releases with the pre-closing-negotiations “price.”
Second, OK, you might say, a sale price of $1 billion means it should still be on the tax rolls at $1 billion. However, any experienced commercial real estate or assessment professional
knows that sale price usually doesn’t represent the value of the “real” property.
By law, the Assessor can only assess “real” property and, using the standard income-approach-to-value (which our critics never used), factor in the income of a current year and most recent previous years. Again, that’s existing income, not speculative income.
Willis Tower’s sale price of $1B reflected the purchaser’s speculative estimates of FUTURE revenue - which is why a bank(s) gave the purchaser a mortgage based on $1B of value. It’s like being loaned money to buy blue-chip stock which you and the bank agree will be worth more in the future.
Third, and the *most* important point is credibility of valuation. If you think the Assessor wanted a “low” valuation of Willis Tower (we do not), don’t take our word for anything. Willis Tower submitted an appraisal valuing the building at $550 million, but you can logically say they want their building valued “low,” so don’t take their word for it, either.
Take the word of an entity which wants the building valued as highly as possible, an entity dependent on property tax revenue: the Chicago Public Schools (CPS). Routinely, CPS files Petition(s) for Underassessment - a part of the process which ensures their voice is heard on about valuation of all properties CPS chooses.
CPS’ own appraisal, performed by experienced professionals, not non-assessment critics, put the value of Willis Tower at $600 million, not the $550M submitted in the building’s appraisal - and not the $1.3B “Anonymous” claims here and which various public comments have claimed.
Guess how much the Cook County Assessor’s Office valued Willis Tower at? We valued it at $600M. That’s right, the Assessor’s Office(which has no motivation for high or low figures) was right in line with the appraisal submitted by the entity which wants the highest valuation possible to fund schools.
So, before incorrectly believing something which is missing key information, we respectfully ask that people simply consider actual, complete facts. When doing so in this case, it is obvious that the valuation of Willis Tower is fair, accurate and correct.
It’s makes a splash to say an allegedly $1.3B building “is placed on the tax rolls for half,” but real facts show that those causing the splash are all wet. Thank you.
Tom Shaer
Deputy Assessor for Communications
Cook County Assessor’s Office
Comment by Tom Shaer Thursday, Nov 16, 17 @ 3:59 pm
You wanna know why your side of the story is ignored? It’s because these esteemed publications don’t let their story get bogged down in garbage talking points from a government body that no one thinks is functioning in a just manner. If the assessors side was worth talking about, I’m sure these publications would have used them in an attempt to look unbiased.
Comment by BucknIrish Thursday, Nov 16, 17 @ 4:12 pm
Rasselus @ 3:19. Your explanation makes sense for Cook County with property types having different valuation percentages. However, what is the motivation to have a 33.33% assessment ratio for all property outside of Cook County?
Comment by Sox Fan Thursday, Nov 16, 17 @ 4:20 pm
You could check up the transfer stamps paid but that was probably manipulated too
Comment by DuPage Saint Thursday, Nov 16, 17 @ 4:48 pm
Berrios is the most laughable human in the history of Illinois politics. Shame on us for putting this guy in there over and over.
Comment by Loyal Dem Thursday, Nov 16, 17 @ 5:00 pm
“Guess how much the Cook County Assessor’s Office valued Willis Tower at? We valued it at $600M. That’s right, the Assessor’s Office(which has no motivation for high or low figures) was right in line with the appraisal submitted by the entity which wants the highest valuation possible to fund schools.”
Who represents the Willis Tower on property tax related matters?
Comment by @Tim Shaer Thursday, Nov 16, 17 @ 5:37 pm
“Willis Tower’s sale price of $1B reflected the purchaser’s speculative estimates of FUTURE revenue - which is why a bank(s) gave the purchaser a mortgage based on $1B of value. It’s like being loaned money to buy blue-chip stock which you and the bank agree will be worth more in the future.”
So wait, now the Assessor is telling us which part of a transaction is real, and which is speculative? Must be because Joe Berrios knows more about how to invest in real estate than Blackstone. /s
Comment by Befuddled Thursday, Nov 16, 17 @ 6:51 pm
Question: What level of successful appeals of valuations would represent a system operating at peak quality and efficiency?
Too many successful appeals represents too many flaws in the whole process. (Too few would represent lack of responsiveness to changing input.)
My sense is that we are way out of whack on the high side of initial flaws. That leaves room for speculation on bad process, and claims of “corruption.”
For Berrios to brag about his increasing and quickly resolved appeals, shows that he just doesn’t get the problem. His goal must be to avoid errors, as much as possible, not to be good at fixing them.
Comment by walker Thursday, Nov 16, 17 @ 7:39 pm
Over-reliance on one method to determining the value of real property, be it one’s residence or Willis Tower, will invariably lead to valuation errors. A savvy instutional buyer like Blackstone certainly considered both sales of comparable properties and the cost to replace it along with the cash flow/income approach before striking a price.
What do you think your home’s property taxes would look like if they were solely determined based on what it might rent for?
Comment by Arthur Andersen Thursday, Nov 16, 17 @ 7:58 pm
Sometimes you gotta just feel sorry for a hired flack who has to go out and defend the indefensible while knowing it’s indefensible. Today Tom Shaer is that flack.
Comment by Responsa Thursday, Nov 16, 17 @ 10:56 pm
The best determination of a valuation/price is a recent sale. The 2008 mortgage crisis is the poster child of appraisals that were wrong and easily manipulated.
Comment by Lurking MBA Thursday, Nov 16, 17 @ 11:25 pm
Lol at the Assessor office having no motivation for high or low figures. I’m sure that the property tax appeal attorney’s campaign contributions are just a coincidence. What a joke
Comment by Chicagonk Friday, Nov 17, 17 @ 9:18 am