Amari & Locallo e-letter
October 2014
Amari & Locallo
Chicago Office
734 N. Wells Street
Chicago, IL 60654
312-255-8550
Amari & Locallo
Bloomingdale Office
236 W. Lake Street, Suite 100
Bloomingdale, IL 60108
630-307-3700

Local assessor tees it up ...par three

The give and take of the assessment process was no less evident when a couple of years ago (2011) Onwentsia Club, Lake County, Illinois was able to secure a favorable decision from the Illinois Appellate Court changing the assessments for land under buildings and other improvements associated with a golf course. This decision was donned Onwentsia I.

Though the golf season is about to end and as cooler weather prevails, arguments on how to assess and tax golf courses have heated up once again in an administrative decision of the Illinois Property Tax Appeal Board ("PTAB") issued October 24, 2014.

A little background...

Golf courses enjoy special treatment under our tax code allowing for land to be assessed as open space. Why is that significant? Historically the valuation for open space land is considerably lower than if it were to carry a commercial use designation. Real estate tax savings each year are significant.

As laws are often tested, the taxpayer filed an appeal requesting open space status for land under golf course improvements (the clubhouse, parking lot, swimming pool, tennis courts, paddle ball courts, halfway house, caddie shack, etc.). The taxpayer lost at the Lake County Board of Review and the PTAB but on further appeal to the Illinois Appellate Court, won.

The Appellate Court then sent the case back to the PTAB to factually determine if any of these improvements "facilitate the existence of the golf course" and if so, grant the open space status. The PTAB reissued its decision on March 23, 2012 giving open space status to parcels with improvements. The Lake County Board of Review timely filed another challenge and now we have Onwentsia II.

Who wins...who loses...

Some taxpayers are winners. A reduced assessment can mean less real estate tax to the owner. Some taxpayers are losers. If valuations of golf courses are reduced they contribute less to their local area tax bases. Any reduction to the local tax base can increase the local tax rate.

Chip shot to the green...

In Onwentsia II, the Appellate Court decided that open space status should be narrowly construed when applying it to parcels with improvements. It perceived no connection between a swimming pool or tennis court to a golf course. It found less clear the connection a golf course has with its maintenance buildings, parking lots, driveways or clubhouse. The case was returned to the PTAB for further review and clarification of these issues.

On the green in two...

The PTAB conducted a full hearing. Both the taxpayer and the Board of Review presented testimony and evidence. The taxpayer conceded that the tennis courts, pool, dormitory and the platform tennis facilities were not entitled to open space treatment. However, the clubhouse, parking lots, maintenance areas (riding stables turned into maintenance area), caddie shack, halfway house, were subject to discussion.

Onwentsia II decided the halfway house, maintenance area, caddy shack, practice range relate directly to and thus facilitate the existence of the golf course. The clubhouse and parking lots was another story.

Testimony determined that 29.5% of the clubhouse had a golf specific use and 70.5% of the clubhouse had multiple uses during the year (weddings, dinning, etc.) and was used seasonally only 75% of the year. As such, the clubhouse was not used exclusively for golf and was denied open space treatment. Likewise, the parking facilities were denied open space treatment.

Putting...

The PTAB would not consider a partial assessment based on the proportional use of the clubhouse and parking. They decided that if open space treatment is available it could only have one assessment, an open space assessment. As such, the improvements and land under the clubhouse and parking lots remained at commercial values. As to those parcels that were determined to "facilitate the existence of the golf course" they directed the local Board or Review to strike from the tax rolls any assessment on their improvements and treat those parcel as open space (land only).

Does the ball go in the hole?

Will have to see if there is an Onwentsia III.

About Our Law Firm 
The concentration of the Law Offices of Amari & Locallo, with offices in Chicago/Cook County and Bloomingdale/DuPage County, is representing commercial, industrial and multi-unit residential property owners throughout the State of Illinois. Our personnel have experience as county tax assessors, corporate tax managers, trial lawyers and real estate transaction attorneys, which contribute a unique insight into the negotiation and process of appealing real estate taxes. 
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Our comprehensive knowledge of real estate tax laws 

and procedures enables us to effectively represent the interests of our clients throughout the State of Illinois.


 

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