New real estate tax incentive (Class 7c)...for Cook County:

As we often discussed in our past e-letter issues, one of the most effective ways to reduce your commercial real estate taxes in Cook County is to find yourself an incentive to apply.   The Cook County Board of Commissioners recently passed ordinance 14-1930 amending assessment classifications to include a class 7 (c).  This incentive is entitled Commercial Urban Relief Eligibility (CURE).

The incentive was originally targeted to support grocery stores; however in the final amendments to the ordinance, the incentive was broadened to apply to all commercial properties. 

This incentive applies only to a commercial property that is (1) newly constructed, (2) substantially rehabilitated, or (3) abandoned.

The ordinance defines abandoned as property where the buildings and other structures, or portions thereof, have been vacant and unused for more than 12 continuous months and as established by rule of the Assessor (yet to be tested).

Impact of the new ordinance...

The class 7(c) incentive will reduce the level of assessment for commercial properties from 25% to 10% for a 3 year period.

The level of assessment will phase out in year 4 to 15% and in year 5 to 20%.  The incentive is renewable one time and is eligible for renewal in the 3^rd, 4^th or 5^th year of the initial incentive.

Time for filing...

Applications of the Class 7(c) that are based on new construction or substantial rehabilitation must be filed to the Assessor within one year prior to the construction.   Class 7(c) applications based on occupation of an abandoned property must be submitted prior to reoccupation. 

All applications must be made before November 30, 2019 to receive consideration.

Devil is in the details...

There is a lot more paperwork to prepare and file but just to name a couple of items to note.

In order to qualify, the local municipality where the property is located will need to pass a resolution stating that it supports and consents to application of the incentive.  The resolution must specifically state that the property is deemed a redevelopment priority by the municipality.

The incentive also allows properties that are not 100% vacant to possibly qualify.  Historically, all other real estate tax incentives (6B, 7A, 7B) require 100% vacant properties. Under this 7(c) incentive, properties that have portions of vacancy may also be defined as abandoned.

Let us help you determine if your property qualifies...

Commercial property owners, if they qualify, should take immediate advantage of this new incentive.  The Cook County Assessor and Cook County Bureau of Economic Development, along with local municipalities, have worked together to create this incentive to encourage commercial development in Cook County.

Although the benefits of the 7(c) incentive do not last as long as the 7(a) or 7(b) incentives, the requirements appear to be not as strict and written with the intent that most depressed commercial properties should qualify.