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Case Study: Hotels
Lodging industry faces highest vacancy
rates in decades...
Solution
We made preparations to go to trial even though most tax assessment litigation in Cook County is resolved by settlement. As part of the preparation, we worked with two appraisers on the proper valuation of a hotel property. Our collaboration with the appraisers emphasized the distinction between real estate value and business value.
We were able to quantify the value of the furniture and fixtures (intangible personal property), and the value of the real property. In Illinois, only real property is subject to taxation.
Result
As the trial date drew near, because of the overwhelming documentation of value that was submitted, the county's attorneys agreed to a settlement that resulted in refunds of more than $3.4 million for the four tax years involved.
For more information on hotel tax appeals, contact James Regan
Situation
A major hotel in Chicago's Loop had received excessive assessments for a four-year period from the Cook County assessor and the Cook County Board of Review.
A subsequent sale of the property indicated, on its face, a value even higher than those established by the assessor and the Board of Review.
Tax objection lawsuits were filed in the Circuit Court of Cook County. The county attorney had offered to settle the litigation at refunds of $100,000 for each of the four years involved.
Challenge
The challenge we faced was to obtain final assessments that were far lower than those proposed by the county attorney.